Although the sources of the 2008 crisis were highly complex and numerous, many financial firms simply did not appreciate the risks they were taking. Their risk-management systems were inadequate and their capital and liquidity buffers insufficient in the absence of a body tracking systemic financial risk.  

Governments gave support to specific financial institutions or markets having recognised that a healthy economy requires well functioning financial markets. Measures were taken to help to re-start various types of credit. By reviving the markets, which allow banks to tap the broader securities markets to finance their lending, governments have helped banks make room on their balance sheets for new credit to households and businesses.

In light of the single aim of promoting economic recovery and economic opportunity, the 27-member bloc will benefit from the implementation of the European Systemic Risk Board (ESRB) for macro-prudential supervision and the European Supervisory Authorities (ESA) for micro-prudential supervision. The ESA will comprise three sub-groups to oversee different kinds of financial institution: the European Banking Authority (EBA), the European Securities and Market Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA).

The EU's expansionary stimulus packages have propped up Europe’s failing economies. The exit strategy being the next step would broadly consist of a withdrawal from stimulus, structural and fiscal consolidation at or above 0.5% a year, labour market reforms, boosting long term investment and strengthening national budgetary frameworks. Since recovery remains volatile, governments need time to repair the financial system and are not likely to abandon extraordinary fiscal policy measures to support economic activity through 2010. As a result, the Stability and Growth Pact's excessive deficit terms have been breached by eleven Member States and nine more countries that are in breach of the Pact's deficit ceiling at end-2009 as countries such as Germany and France are preparing to boost their deficit by new borrowing and to postpone a balanced budget even to 2015.

Most euro area countries are providing stimulus packages to counter the downturn

and safeguard jobs.

The Government-sponsored anti-crisis schemes in place in Slovenia: the guarantee scheme – only some 40 per cent of the quotas awarded to banks was actually utilised and some 30 per cent of government guarantees to finance Slovenian companies.  Most bank officers see excessive red tape and stringent terms as the stumbling block in efforts to overcome the credit crunch and give impetus to cash-starved companies. There is still more than a half of 1.2 billion euros set aside for the guarantee scheme to be tapped in 2010, but the terms and conditions for unwinding the funds should be simplified.

The Slovenian liquidity scheme was added on top of the guarantee scheme already in place to stabilise financial markets by providing state loans to eligible credit institutions unable to obtain funds on the financial markets under the previously approved Slovenian guarantee scheme and other institutions to ensure their access to short and medium term financing. The liquidity scheme to overcome the financial crisis is in line with EC Treaty state aid rules as non-discriminatory and limited in time and scope.

The overall budget of the previous and the new liquidity scheme is capped at €12 billion. Only solvent credit institutions, insurance, reinsurance, and pension companies are allowed to enter the scheme.

To benefit from the state loans, participating financial institutions are required to pay a market-oriented fee, in line with recommendations from the European Central Bank.  The safeguards were incorporated in the scheme with the aim to avoid an abusive use of the state support and beneficiaries will be subject to behavioural commitments include limitations on expansion and marketing and conditions for staff remuneration or bonus payments. The scheme should help to restore confidence on Slovenian financial markets and to encourage interbank lending.

The crisis exit strategy is among the priorities of the Slovenian Government in order to meet the 2013 deadline for reducing its budget deficit to 3% of the country GDP. The strategy, which will include both measures to reduce the budget deficit and structural adjustments to enable long-term development, will be part of a wider stability programme to be submitted to the European Commission by the end of January 2010.

The removal of the country’s crisis measures will contribute to reducing the budget deficit.  Moreover, new tax revenues will be sought including an expanded carbon tax. The latter is part of effort to make the Slovenian industry greener. The fact is that Slovenia is well placed for a high share of power produced from renewables and substantial investments, even though it is falling behind when it comes to the Kyoto Protocol targets for cuts in greenhouse gas emissions, shows a survey on environmental indicators.