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Eurozone crisis

Slovenian parliament approves public spending cap

Slovenian lawmakers have passed a law which requires the government to keep a balanced budget. The move is aimed at restoring market confidence in the EU country and averting an international bailout.

The budget deficit law passed 78-8 on Friday, garnering the two-thirds majority from Slovenia's parliament needed to amend its constitution. Under the new legislation, Ljubljana must maintain a balanced budget beginning in 2015. Lawmakers won't be allowed to approve a budget deficit except in extraordinary cases.

Prime Minister Alenka Bratusek expressed her support for the legal action, despite previous misgivings about its feasibility, telling lawmakers the government was acting "for the people's and the state's benefit."

Bratusek's center-left government had pushed for implementing the law beginning in 2015. However, the economic recession has deteriorated Slovenia's once role model status among new EU-member states to one of a nation on the brink of bankruptcy. Its budget is forecast to reach 71 percent of the annual GDP in 2014.

The prime minister contended that Slovenian interests, not EU pressure, influenced Friday's decision.

"We are doing this for ourselves," she said.

The European Commission praised the vote on Friday.

"This is a strong signal of Slovenia's commitment to sound public finances, which are an essential foundation for sustainable growth and job creation in the country," European Commission spokesperson Simon O'Connor said, according to the news agency DPA.

Ljubljana has been working to lowering its public debt amid EU and investor worries in recent months that it could become the sixth EU state - after Greece, Ireland, Portugal, Spain and Cyprus - to require international aid.

In early May, the Slovenian government announced austerity measures aimed at keeping the country solvent.

The initiative, which they hope will raise 540 million euros ($697 million), includes a value added tax raise from 20 to 22 percent; the privatization of 15 state firms; and bolstering ailing banks, which have roughly 7 billion euros in bad loans.

kms/ccp (AP, AFP, Reuters, dpa)