| Abstract: | When a state can no longer finance general government expenditures, it must borrowin domestic or foreign financial market. In accordance with the Public Finance Act, government borrowing in one single year is carried out on the basis of a funding programme adopted by the National Assembly. The amount that state owes to domestic or foreign creditors is called public debt. To a great extent, public debt includes government bonds, as well as liabilities under loans, and guarantees given.
In the years before the financial crisis, many states did not take advantage of, at that time, favourable conditions in order to create reserves for future crises. Therefore, in many euro area Member States the financial crisis has been the reason for the accumulation of public debt. This rapid increase of public debt raised the need for sustainability of public debt in the environment of financial instability and low growth. In order to achieve sustainability of public finances, Slovenia adopted the fiscal rule. In the fiscal area, one of the most important functions of the state is the management of the public debt. In Slovenia, the state treasury, which is part of the Ministry of Finance, is responsible for the debt management.
In the diploma project we analyzed the public debt and its structure in Slovenia in the period from 2006 to 2016. After the analysis, we established that Slovenia has been borrowing money mostly by issuing securities. The greatest share of debt represents an internal debt, thus meaning that the state largely prefers to borrow in the domestic market. Slovenia primarily borrows long-term, both in the domestic market and in the foreign market, as all the borrowing in the observed period on the foreign market is long-term. Since 2006, when Slovenia joined the European Monetary Union, most of Slovenia’s debt has been in euros. |
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