By Marja Novak
LJUBLJANA (Reuters) - The five parties of the Slovenian center-left government coalition signed an agreement of cooperation with the opposition Left party to secure support for its main projects over the next year, the six parties said on Wednesday.
The Chamber of Commerce and Industry warned that the agreement could hurt the Slovenian economy because the demands of the Left are expected to raise taxes and public spending.
But Prime Minister Marjan Sarec, whose government took over in September after June's general election, said the minority government has no choice but to seek opposition support for its projects. The coalition holds 43 out of 90 parliamentary seats while the Left has 9 seats.
"The government is a minority coalition government. If we want to do anything we have to make arrangements, that is the reality of democracy," Sarec told Radio Slovenia.
The Left expects its cooperation with the government will lead to higher taxes on profit, more public apartments with non-profit rents, an improved national health system and more long-term jobs, Left spokesman Nikola Janovic Kolenc told Reuters.
The Chamber of Commerce said the demands of the Left could burden companies by as much as 1.4 billion euros ($1.59 billion)and hit the 46 billion-euro economy.
"We need a favorable business environment, productivity growth and the respect for those who work. The agreement between the coalition and the Left does not guarantee any of these. It is a mixture of expensive populist decrees which go against the development of the economy," it said in a statement.
The agreement was signed just before the Left helped parliament confirm its 2019 budget plan earlier on Wednesday.
According to the agreement the Left will cooperate in the preparation of the 2020 and 2021 budgets later this year, which are expected to be confirmed by parliament before the end of 2019.
The largest opposition party, the center-right Slovenian Democratic Party (SDS), claims the Left is in fact stronger than the coalition parties.
"As long as the state is actually governed by the Left the economy will be regressing," said Branko Grims, a member of parliament from the SDS.
(Reporting by Marja Novak; editing by Ken Ferris)