Slovenia Business Week no. 06/2006, February 6th, 2006 Table of Contents:
Slovenia Business Week no. 06/2006, February 6th, 2006
Table of Contents:
Chamber of Commerce and Industry of Slovenia Hands Out Business Excellence Awards 3
PM and Swedish Speaker Call for Improved Economic Cooperation ................................... 7
PM and Swedish Speaker Call for Improved Economic Cooperation ................................... 7
Parliament Passes National Radioactive Waste Management Programme .......................... 11
Government Seeking Greater Media Pluralism With Changes to Media Act ...................... 12
Government Amends Real Estate Agencies Act to Boost Consumer Protection ................ 13
Number of Registered at Employment Service Down by 1% in 2005 ................................. 16
Telecoms Watchdog Issues SMP Designations for Mobile Operators ................................ 26
Slovenian, Georgian Defence Ministers Discuss NATO Cooperation ................................ 38
PM Sends Condolences to Egypt, Saudi Arabia Over Ferry Disaster ................................. 38
Erjavec and Ivanov Discuss Ukraine's and Georgia's NATO Accession ............................. 38
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HEADLINES
Chamber of Commerce and Industry of Slovenia Hands Out Business Excellence
Awards
The awards went to the bosses of industrial furnace producer Bosio, Hugo Bosio; bank Banka
Koper, Vojko Cok; management consulting company Profil, Franc Jamsek; hydraulic systems maker Kladivar, Milan Kopac; home appliance maker BSH Hisni aparati, Matjaz Lenassi; aluminium producer Talum, Danilo Toplak; and fuse producer Keko-Varicon, Zoran Zivic
The Chamber of Commerce and Industry (CCIS) has handed out awards for business achievements in 2005 to seven Slovenian managers.
The awards went to the bosses of industrial furnace producer Bosio, Hugo Bosio; bank Banka
Koper, Vojko Cok; management consulting company Profil, Franc Jamsek; hydraulic systems maker Kladivar, Milan Kopac; home appliance maker BSH Hisni aparati, Matjaz Lenassi; aluminium producer Talum, Danilo Toplak; and fuse producer Keko-Varicon, Zoran Zivic.
Speaking ahead of the award ceremony on Thursday, 2 February, CCIS President Jozko Cuk told the press that all the winners come from companies that have betted on development and have a long-term strategy.
All the companies represented by the winners have the capacity to compete on the global market and are guided by innovation and social responsibility, Cuk added.
The coveted awards, which were first conferred in 1968, are handed out to mark achievements by company executives for excellence in leadership, technical operations and marketing, said the head of the seven-member award panel, Zdenko Pavcek.
Government Takes a First Look at Privatisation Proposals
Prime Minister Janez Jansa's economic affairs college reviewed the proposals for the privatisation of the banks NLB and NKBM, telco Telekom Slovenije and the energy sector, which the government has received from expert groups it appointed last year
Prime Minister Janez Jansa's economic affairs college on Tuesday, 31 January reviewed the proposals for the privatisation of the banks NLB and NKBM, telco Telekom Slovenije and the energy sector, which the government has received from expert groups it appointed last year.
The meeting clarified certain dilemmas, but some questions remain open and new ones have appeared, the prime minister's office said in a short statement, pointing out that the meeting was not designed to confirm or reject the proposals, but rather as a preliminary scrutiny of the proposals.
The meeting featured the members of the PM's college, the chairs of the privatisation groups, as well as supervisory and management board chairpersons of Nova Ljubljanska banka
(NLB), Nova Kreditna banka Maribor (NKBM) and Telekom Slovenije.
The working groups entrusted with drawing up of proposals for the privatisation of Slovenia's largest banks, the national telco and the energy sector were established in November 2005.
The proposals, which will not be disclosed before the government has discussed them, are not binding for the government, which argued that a second wave of privatisation is needed to ensure the competitiveness of the corporate sector.
There is great interest in the proposal of the group assigned with the privatisation proposals for NLB. Media have speculated that the group is dissuading the state from allowing the
Belgian financial giant KBC, a 34% owner, to acquire a majority stake in the bank.
Also according to unofficial information, the proposals for Telekom favour the privatisation of the telco as a group with a strategic partner, with the state keeping a 25% stake and the golden share.
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Telekom is the fixed-line utility, but the group includes the country's biggest mobile provider,
Mobitel, as well as the largest Internet service provider, Siol.
The government has also set up working groups for the privatisation of insurer Zavarovalnica
Triglav and for the withdrawal of the Pension Fund Management fund (KAD) and Restitution
Fund (SOD) from Slovenian companies. The proposals are due on 31 January and 31 March, respectively.
Economics Ministry Outlines Activities for 2006
The key goals of the Economics Ministry in 2006 are to facilitate economic growth through legislative changes and to provide development-based financial incentives
The key goals of the Economics Ministry in 2006 are to facilitate economic growth through legislative changes and to provide development-based financial incentives, Economics
Minister Andrej Vizjak said on Wednesday, 1 February in Ljubljana.
The ministry therefore plans to amend or draft 17 new bills, 25 executive regulations and distribute a record amount of development-based aid.
The enterprise fund will allocate SIT 5bn (EUR 20.86m) of domestic and international funds, the tourism sector will get SIT 2.8bn (EUR 11.68m), while SIT 5bn (EUR 20.86m) will be allocated for foreign direct investment, out of which SIT 4bn (EUR 16.69m) will go to Novo
Mesto car maker Revoz.
Meanwhile, two heads of directorates at the ministry will be replaced this year: the heads of
Foreign Economic Affairs and Energy directorates, Mojca Jazbinsek Volk and Djordje
Zebeljan, are leaving the ministry for positions in the corporate sector.
The temporary heads of the two directorates will be Monika Jakse (Foreign Economic Affairs
Directorate) and Franc Zlahtic (Energy Directorate).
Head of the Interior Market Directorate Peter Puhan said that his office's most important task was preparing the country for the 2007 euro changeover.
He said that an umbrella act on the euro will be adopted in the first half of the year, while other activities on getting the economy ready for the January 2007 changeover are also underway.
Moreover, the ministry plans a complete overhaul of the trade act, aimed at eliminating administrative barriers and ensuring customer security.
It also wants to pass acts on companies; on chambers of commerce; and changes to the acts on takeovers; financial operations of companies; and profit sharing.
The Energy Directorate will meanwhile focus on preparations for 2007, when the energy market will be completely liberalised, Zebeljan said.
Vizjak added that no concrete measures regarding the privatisation of the Slovenian energy market are expected in 2006, as the country will focus on drafting the strategy for privatisation.
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INTERNATIONAL COOPERATION
Rupel Welcomes Commission's Proposals for the Balkans
Foreign Minister Dimitrij Rupel has welcomed the latest proposals tabled by the European
Commission to encourage trade links and closer education ties with and within the Balkans
Foreign Minister Dimitrij Rupel has welcomed the latest proposals tabled by the European
Commission to encourage trade links and closer education ties with and within the Balkans.
This is a "comprehensive and high-quality document," which is partly a result of Slovenia's interventions, he said in Brussels on Monday, 30 January.
"I personally think every tool for encouraging links within the Balkans...and the Balkans' links with the rest of Europe, need to be welcomed," he stressed.
Rupel acknowledged the concern of countries in the region that the plan was "an attempt to bring together something which does not belong together," but added that he sees no fear in that.
He was referring to ideas in 1990 and 1991, when, in his words, "our interlocutors wanted to preserve Yugoslavia in another form, but the idea did not work."
However, since then the countries of the former Yugoslavia have been signing free trade agreements, which need to be aligned now, said Rupel.
A free trade agreement between countries in the region is one of the key points of the
Commission's proposal.
Additionally, Rupel said facilitating the Balkans' ties with the EU is crucial, for there is an
"isolationist culture" in the region which is hampering the integration efforts.
Rupel was speaking to the press after a meeting of EU foreign minister, who labelled the proposal as a "good basis for subsequent work."
EU Topics Dominate Drnovsek's Talks in Romania
Romania's efforts to join the EU and the help it expects in the process from Slovenia topped the agenda as President Janez Drnovsek held talks with his Romanian counterpart Traian
Basescu and Parliament Speaker Adrian Nastase and Senate President Nicolae Vacaroiu
Romania's efforts to join the EU and the help it expects in the process from Slovenia topped the agenda as President Janez Drnovsek held talks on Monday, 30 January with his Romanian counterpart Traian Basescu and Parliament Speaker Adrian Nastase and Senate President
Nicolae Vacaroiu.
The officials agreed, according to the president's office, that the EU must keep its door open, in particular for countries in the Balkans.
Slovenia supports the prospects of EU membership for the countries of the Western Balkans, which could contribute to the resolution of issues such as the Trans-Dniester Republic and
Kosovo, Drnovsek was quoted as saying.
Drnovsek also told his hosts that Romania was an important partner for Slovenia in all fields, and said connections should be improved, most notably through flights between a Ljubljana and Bucharest.
According to the press release, the Romanian officials also said it would be useful if Slovenia opened a diplomatic mission in Romania, which would help boost trade.
Slovenia is planning to open an embassy in Bucharest in the shortest possible time, according to the Foreign Ministry. In the meantime, the ambassador in Serbia-Montenegro is in charge of Romania.
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Drnovsek Congratulates Halonen on Re-election
Drnovsek also took the opportunity to express his satisfaction over the friendly relations and ever more dynamic cooperation between Slovenia and Finland
President Janez Drnovsek has sent a letter of congratulations to Finish President Tarja
Halonen, who secured her second six-year term in office in Sunday's second round of the
Finish presidential election.
Drnovsek also took the opportunity to express his satisfaction over the friendly relations and ever more dynamic cooperation between Slovenia and Finland, Drnovsek's office said on
Monday, 30 January.
The Slovenian president also said he was convinced that the Slovenian-Finnish ties, firmly rooted in shared values and a common vision for the future, will continue to contribute to the strengthening of stability and security in Europe and the world.
Drnovsek Concludes Romania Visit
President Janez Drnovsek concluded his two-day official visit to Romania by meeting the country's PM Calin Tariceanu in the winter resort of Sinaia
President Janez Drnovsek concluded on Tuesday, 31 January his two-day official visit to
Romania by meeting the country's PM Calin Tariceanu in the winter resort of Sinaia, the president's office has said.
Tariceanu briefed Drnovsek on Romania's EU accession talks, saying that over the past year
Romania has mainly made an effort to bring legislation in line with EU standards.
He voiced the hope that Romania will fulfil all criteria for the EU membership by 2007, according to the president's office.
Drnovsek meanwhile expressed Slovenia's support for the process, and reiterated that the EU should remain open for all countries which border Slovenia as well as Romania.
Addressing the issue of Kosovo, Drnovsek said that solving the future status of this troubled province of Serbia-Montenegro is the top precondition for the stability of the entire region. He moreover stressed the importance of EU membership for the countries in the region.
New Turkish Ambassador Presents Credentials to State Secretary
The new Turkish Ambassador Melek Sina Baydur presented copies of her credentials to State
Secretary at the Foreign Ministry Bozo Cerar
The new Turkish Ambassador Melek Sina Baydur presented copies of her credentials to State
Secretary at the Foreign Ministry Bozo Cerar on Wednesday, 1 February the Foreign Ministry said.
Baydur and Cerar agreed that relations between Slovenia and Turkey were good, adding that the countries could especially strengthen their economic ties, the ministry said.
Cerar moreover welcomed the launch of accession talks between Turkey and the EU and wished the former Turkish Ambassador to Bosnia-Herzegovina a lot of success in her work here.
Baydur's predecessor to Slovenia was the much loved Balkan Kizildeli, who was selected foreign diplomat of the year 2005 for his contribution to openness and development in
Slovenian society.
Government Willing to Discuss Drnovsek-Racan Agreement
Slovenia and Croatia have constitutionally committed themselves to respect the delineation between the two countries as it existed on 25 June 1991 and under those terms Slovenia is willing to start talks on amending the Drnovsek-Racan agreement, the cabinet said
Slovenia and Croatia have constitutionally committed themselves to respect the delineation between the two countries as it existed on 25 June 1991 and under those terms Slovenia is
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willing to start talks on amending the Drnovsek-Racan agreement, the cabinet said on
Thursday, 2 February.
The agreement reached by the former prime ministers of Slovenia and Croatia, Janez
Drnovsek and Ivica Racan, defines a temporary maritime border in the Bay of Piran as running 300 metres from the Croatian coast, and gives Slovenia access to open seas. It was never ratified due to widespread opposition in Croatia.
The cabinet, responding to a question by Social Democrats (SD) MP Aurelio Juri, added that
Slovenia is willing to pursue all avenues for solving the open issue with Croatia.
However, arbitration, as one of the options, demands a series of preceding agreements on the content and the form of the procedure, which in turn requires complete trust between the arbitration parties.
Furthermore, general guidelines for Slovenia's foreign policy towards Croatia have to be passed by the National Assembly, which has so far not made any decisions on the way the border should be tackled.
The government also labelled the Slovenian fisheries zone as an executive act of the 2002
Slovenian Marine Fisheries Act, defining the zone as an area where fishing is permitted.
The decree breaks down the Slovenian fishing area into three zones: Zone A incorporates internal waters covering the whole Bay of Piran; zone B covers territorial waters adjacent to the Italian and Croatian borders; and zone C covers the Slovenian ecological zone at open seas.
PM and Swedish Speaker Call for Improved Economic Cooperation
Prime Minister Janez Jansa and Swedish Speaker Bjoern von Sydow agreed that the relations between the two countries are on a high note and expressed a joint desire to increase bilateral economic cooperation, especially in investments
Prime Minister Janez Jansa and Swedish Speaker Bjoern von Sydow agreed on Thursday, 2
February that the relations between the two countries are on a high note and expressed a joint desire to increase bilateral economic cooperation, especially in investments.
Jansa also presented Slovenia's preparations for the euro changeover and entry into the
Schengen border area, the PM's office said in a press release.
Jansa and von Sydow furthermore agreed on the necessity of European integration of Western
Balkan states, labelling it of key importance for guaranteeing the stability and facilitating democratic and economic development in the region.
They also expressed a joint hope that the EU member states will reach an agreement on future steps regarding the EU constitution.
PM and Swedish Speaker Call for Improved Economic Cooperation
Prime Minister Janez Jansa and Swedish Speaker Bjoern von Sydow agreed that the relations between the two countries are on a high note and expressed a joint desire to increase bilateral economic cooperation, especially in investments
Prime Minister Janez Jansa and Swedish Speaker Bjoern von Sydow agreed on Thursday, 2
February that the relations between the two countries are on a high note and expressed a joint desire to increase bilateral economic cooperation, especially in investments.
Jansa also presented Slovenia's preparations for the euro changeover and entry into the
Schengen border area, the PM's office said in a press release.
Jansa and von Sydow furthermore agreed on the necessity of European integration of Western
Balkan states, labelling it of key importance for guaranteeing the stability and facilitating democratic and economic development in the region.
They also expressed a joint hope that the EU member states will reach an agreement on future steps regarding the EU constitution.
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Von Sydow also met Foreign Minister Dimitrij Rupel, with talks focusing on bilateral relations, joint efforts to stabilise the Western Balkans and topical EU issues, the Foreign
Ministry said.
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EUROPEAN UNION
Commission Urges Slovenia to Embark on Pension Reform
The European Commission has assessed Slovenia's convergence programme as based on a plausible macroeconomic scenario, however it also made two recommendations: the country has to take concrete measures to reduce public expenditure, and to improve the long-term sustainability of public finances, particularly in relation to pensions
The European Commission has assessed Slovenia's convergence programme as based on a plausible macroeconomic scenario, however it also made two recommendations: the country has to take concrete measures to reduce public expenditure, and to improve the long-term sustainability of public finances, particularly in relation to pensions.
In its assessment of the programme, released on Wednesday, 1 February, the Commission says that "Slovenia appears to be at high risk on grounds of the projected budgetary costs of ageing populations."
"The relatively low debt ratio will contribute to limit the budgetary impact of ageing.
However, Slovenia will still face a very large increase in government expenditure," the report reads.
It also criticises the government's decision to move from partial to full indexation of pensions to wages, saying that further changes in the pension schemes, as recognised by the programme, "will prove necessary at some point to contain future increase in government expenditure."
"If no further measures are taken to relieve the pressures of age-related expenditure, the longterm sustainability of public finances will be undermined. A careful planning and timely adoption of measures are key in this regard," the reports says.
In the second recommendation, the Commission urges Slovenia to make more rapid progress towards achieving the programme's medium-term objectives, especially by specifying and implementing the measures underlying the planned reduction of the expenditure ratio.
The medium-term objective (1% structural budget deficit) has nevertheless been assessed as appropriate, as it lies within the range indicated for euro area and ERM II member states in the Stability and Growth Pact.
It has also been assessed that risks attached to the budgetary targets are "broadly balanced".
Slovenia has established a track record of better-than-projected budgetary outcomes, so the assumptions on growth may turn out better than projected, should the structural reforms be implemented timely.
The reason why the Commission has decided to make the second recommendation lies in the
"absence of clear schedules for cutting government spending to offset the revenue loss due to the tax reform" and in light of the recent decision to re-introduce indexation of pensions to wages.
Moreover, the path towards the achievement of the mid-term objective is not fully in line with the Stability and Growth Pact, which sets a benchmark in the annual improvement in the structural balance at 0.5% of GDP, whereas Slovenia's structural balance is planned to improve by only 0.25% of GDP.
The pact allows such a deviation on the basis of "major structural reforms", but the
Commission believes the structural reforms are "insufficiently detailed," as the programme does "not provide a cost-benefit analysis nor evidence of a significant beneficial impact on the long-term sustainability of public finance."
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Overall, the Commission has assessed the macroeconomic scenario of the programme as plausible, even though it is sceptical about the projected impact of the reform programme, which is to accelerate GDP growth to 5% by 2008.
"This seems somewhat optimistic, especially as the programme fails to provide details on how the structural reforms would affect (potential) growth."
Slovenia's convergence report has been assessed alongside the updated reports of Lithuania and Estonia, both of which have been urged to be more ambitious in curbing inflation and deficit considering their pace of GDP growth.
Government Sets EU Agenda and Priorities for 2006
In preparations for the EU presidency, Slovenia will focus on the programming aspect of chairmanship, conclude the staffing process and start training the staff. Event logistics and media relations will also be on the agenda
The government has adopted a draft declaration on Slovenia's EU policy guidelines for 2006 and an action plan of EU-related activities. The document sets priorities for activities in the
EU Council, including preparations for EU chairmanship and the introduction of the euro, the implementation of Schengen border standards and the overhauled Lisbon Strategy, as well as preparations for the next financial perspectives and efficient use of EU funds.
In preparations for the EU presidency, Slovenia will focus on the programming aspect of chairmanship, conclude the staffing process and start training the staff. Event logistics and media relations will also be on the agenda.
Meanwhile, compliance with Maastricht criteria for euro adoption will dominate preparations for the adoption of the euro (scheduled for 1 January 2007) in addition to technical preparations for the changeover and the introduction of double price tags.
The government and the Bank of Slovenia will continue to carry out coordinated economic policies, whereby the preservation of fiscal discipline is crucial, the document reads.
In preparations for the implementation of the Schengen border, meanwhile, emphasis will be placed on carrying out the recommendations made in an EU evaluation programme.
The focus will be on the legal groundwork for the introduction of the Schengen Information
System (SIS II) and preparations for the introduction of biometric features in visa procedures.
Efforts related to the single EU market, especially services and energy, will be the focus of policies for the implementation of the Lisbon Strategy.
Moreover, Slovenian officials will advocate the creation of an environment conductive of knowledge, research and education, as well as the lifting of restrictions on worker mobility, including the transitional period for workers from EU newcomers.
As the country prepares for the 2007-2013 budget period, the authorities will work towards boosting EU cohesion funds and improving administrative capacity of all institutions taking part in the process.
Slovenia will continue to be an active advocate of EU enlargement and participate in membership negotiations with Croatia and Turkey, whereby it will advocate compliance with all principles required in the previous rounds of enlargement, the document reads.
The declaration does not touch on Slovenian-Croatian relations. However, it does say the country supports the determination of a date for accession negotiations with Macedonia and the completion of the stabilisation and association agreement with Serbia-Montenegro.
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LEGISLATION
Act on Municipalities to Be Amended Soon
The Government Office for Local Government and Regional Policy will soon start preparing amendments to the act on municipalities, which could be passed by the parliament by the end of March
The Government Office for Local Government and Regional Policy will soon start preparing amendments to the act on municipalities, which could be passed by the parliament by the end of March, Local Government and Regional Policy Minister Ivan Zagar told STA on Tuesday,
31 January.
When preparing the changes, which the government is to discuss in February, the office will mainly consider the results of the Sunday referendum held in several different parts of the country, where voters backed 12 new municipalities.
In cases where the referendum outcome on the same municipalities differs in certain areas, the office will consider the will of the majority of the inhabitants of a would-be municipality, its geographical position and criteria for establishing new municipalities, Zagar added.
Minister: Slovenian Labour Market Over-Regulated
Speaking to local business representatives in Celje, Labour Minister Drobnic said the
Slovenian labour market was rigid and over-regulated and in need of reforms
Speaking to local business representatives in Celje on Wednesday, 1 February, Labour
Minister Drobnic said the Slovenian labour market was rigid and over-regulated and in need of reforms.
According to Drobnic, the Slovenian Employment Service has to become more efficient in reacting to the needs of the labour market.
Apart from the reform of the Service, Drobnic announced the introduction of combined scholarships, whereby 80% of the scholarship funds would come from the state and the rest from the employer.
The minister explained that presentations on occupations in demand were being conducted in high schools across Slovenia in these days at which young people were being acquainted with the current needs of the market.
Besides addressing the problem of unemployment among young people, the government is also preparing solutions to the issue of unemployment among young women and workers over
55, he said.
While subsidies would be introduced for employers which have to employ workers to step in for women on maternity leave, the hiring of elderly workers would involve an exemption of disabled and pension contributions.
"The state will also try to increase mobility between occupations," Drobnic added.
Parliament Passes National Radioactive Waste Management Programme
The resolution outlines the probable scenarios of radioactive waste management and includes a proposal for technical measures, Environment Minister Janez Podobnik said upon presenting the document to MPs
Parliament passed the government-sponsored resolution on the national programme for radioactive waste management and spent nuclear fuel for the 2006-2015 period on
Wednesday, 1 February.
The resolution outlines the probable scenarios of radioactive waste management and includes a proposal for technical measures, Environment Minister Janez Podobnik said upon presenting the document to MPs.
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The document moreover defines dates for securing conditions for safe management of nuclear waste and assesses the costs of implementing the programme, explained the minister.
The Agency for Radwaste Management (ARAO) will furthermore be tasked to draw up concrete measures based on the document. The measures will in turn be adopted by the government, he added.
Slovenia's largest "producer" of radioactive waste is the country's sole N-plant Krsko (NEK).
Its in-house waste management facility is expected to reach its maximum capacity by 2010, he explained.
The document centres around a planned facility for storing low- and medium-level radioactive waste and spent fuel.
The storage facility, to be built in Slovenia, would suffice for Slovenia's share (50%) of waste produced by NEK, which is co-owned by Croatia.
At the same time the depot could allow for the disposal of all waste if a suitable agreement with Croatia on joint waste disposal is reached.
Several MPs, while voicing their support for the programme, said that the document should define Slovenia's activity in more detail in case Croatia failed to accept its share of the waste by 2023, when NEK's life span runs out.
Government Seeking Greater Media Pluralism With Changes to Media Act
The legislation envisages changes to the funding of media in a bid to promote pluralism,
Culture Minister Vasko Simoniti told the press
The Slovenian cabinet has confirmed changes to the media act whose aim is to promote media pluralism through a series of measures, including the creation of a pluralism fund.
The legislation envisages changes to the funding of media in a bid to promote pluralism,
Culture Minister Vasko Simoniti told the press on Thursday, 2 February.
The changes set down that the Culture Ministry would appoint a task force to decide on media projects that should be awarded state aid from a fund aimed at promoting media pluralism.
The commission would make its decisions based on the importance of the project for public interest and the results of annual studies on the state of media pluralism in Slovenia.
The criteria for awarding state aid will be transparent and unequivocal, preventing abuse,
Minister Simoniti told the press.
Pluralism is also the aim of proposed provisions for "effective" penalties for breaches of media concentration rules.
The Culture Ministry has said current legislation does not provide for effective penalties for violations of anti-concentration provisions of the media law.
A provision has been included in the law which says that any decision aimed at raising ownership in a media outlet above 20% without the prior consent of the Culture Ministry would automatically be rendered null and void.
Moreover, the new legislation would introduce stricter censorship rules in a bid to protect children and young people.
It also introduces quotas for Slovenian language shows that have to be aired on radio and television.
The law also deals with corrections, setting down that corrections by the news media ought to explain the circumstances of the mistake.
Simoniti added that the legislation has been harmonised with EU regulations and other pieces of Slovenian legislation.
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Government Amends Real Estate Agencies Act to Boost Consumer Protection
The amendments introduce stricter provisions on consumer protection and are designed to bolster the development of the real estate profession, Janez Podobnik, minister of the environment and spatial planning, told the press
The government has amended the 2003 act on real estate agencies. The amendments introduce stricter provisions on consumer protection and are designed to bolster the development of the real estate profession, Janez Podobnik, minister of the environment and spatial planning, told the press on Thursday, 2 February.
The amendments thus expand the scope of mandatory provisions that an agency contract must include, and specify the causes for a temporary or permanent revocation of a real estate agent's licence.
According to Podobnik, the penal provisions of the act have also been supplemented in a bid to crack down on market violations that could not be sanctioned under the current act.
Podobnik said the state has issued 585 licences to real estate agents since the original act was adopted. The market inspectorate has carried out 474 inspections since, issuing 290 sanctions.
Parliament Tweaks National Housing Scheme
Parliament has almost unanimously passed amendments to the National Housing Savings
Scheme act, relaxing certain provisions of the state-sponsored scheme and introducing subsidies for young families
Parliament has almost unanimously passed amendments to the National Housing Savings
Scheme act, relaxing certain provisions of the state-sponsored scheme and introducing subsidies for young families.
The much-vaunted scheme, designed in 2000 to improve the affordability of housing, was tweaked in a vote on Thursday, 2 February to relax the rigid provisions on state-provided bonuses that savers get at the end of each year.
Previously, only individuals who used the funds to get housing loans were entitled to the premiums (equalling one monthly instalment). Under the new amendments, however, everyone using the funds for housing purposes will be eligible, regardless of whether they take out a loan or not.
The savers will also be entitled to the premium if they pay at least 10 instalments in the given year (down from 12), but the premium has been reduced from the equivalent of one monthly payment to half the amount.
Moreover, the fixed interest rate has been changed and the duration of the savings period relaxed to between 5 and 10 years. Previously, only fixed 5 or 10 year schemes were available.
A major novelty is subsidies for young families. In accordance with the amendments, young families with at least one child buying their first apartment or house will be eligible for subsidies totalling EUR 160 per year per family member at purchase, and EUR 100 for the following four years.
Social Partners Support Increase in Foreign Worker Permits
The Economic and Social Council, an industrial relations forum, backed a proposal to set this year's quota for foreign workers work permits at 17,350, which is 650 more than in 2005.
The Economic and Social Council, an industrial relations forum, backed a proposal to set this year's quota for foreign workers work permits at 17,350, which is 650 more than in 2005.
According to Janja Romih of the Labour Ministry, 92% of the quota was used up in the previous year. While the council plans to reevaluate the quota after six months, it can be increased by the government at any time.
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The main novelty of the latest work permits decree, the third this year, are the 1,000 permits to be exempt from labour market control restrictions.
The problem of truck drivers was brought up at the session in this regard, as despite shortages, only a third of the 6,000 vacancies in this field were occupied in 2005.
Peter Vrtacnik of the Economics Ministry also acquainted the forum with the government's position on the EU service directive to be voted on by the European Parliament in mid-
February.
According to Vrtacnik, Slovenia supports the proposal in principle, while it also thinks that services connected to public interest should be exempt from the directive.
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STATISTICS/FORECASTS
Slovenia's Population Increasing, but Birthrate Still Dropping
At the end of the third quarter of 2005, there were 2,003,584 people living in Slovenia, an increase of 2,470 or 0.1% compared to June 2005
At the end of the third quarter of 2005, there were 2,003,584 people living in Slovenia, an increase of 2,470 or 0.1% compared to June 2005, the national Statistical Office told the press on Tuesday, 31 January.
Moreover, the share of people living in Slovenia with a foreign citizenship stood at 2.5%, which is 0.1 percentage point more than in the first half of 2005.
Meanwhile, demographer Milivoja Sircelj outlined the results of a survey on birthrate in
Slovenia in the last 100 years. Data shows a trend of decreasing birthrate in 20th century, she said.
According to Sircelj, 20% of women in the oldest generations did not have any children, while others gave birth to one to 15 children or more. The size of families differed greatly, as the numbers of women with two, three or six children were almost the same.
This however changed already in 1920s, when the number of women with six or more children started to decrease and the share of women without any children began to rise.
Later on, there were ever more women with children, yet, ever fewer women with a large number of children, Sircelj said. Families were becoming similar in size, mainly with two children, while families with four or more children were already rare, she added.
In younger generations, born between 1957 and 1961, 55% of women gave birth to two children, 22% to one, 13% to three, while only 7% of women have not had any children.
As many as 18% of women born in 1972 did not have children at the age of 32, according to data from 2004. Sircelj therefore concludes that birthrate will continue to drop in the future.
Despite the population increase, then, Slovenia is at the bottom of the scale of birthrates in the
EU, where Ireland, France and Finland have the highest birthrate.
Interestingly, Swedes have the highest share of children born out of wedlock (55.4%), with
Slovenia not too far.
Simulation of Government Reforms to Be Carried Out by Spring
The results will be used by the cabinet in the implementing phase
The Finance Ministry and the Institute for Economic Research signed on Tuesday, 31 January an agreement whereby the institute will carry out a simulation of the government-sponsored economic and social reforms. The results will be used by the cabinet in the implementing phase.
The deal, worth SIT 35.9m (EUR 149,842), stipulates a deadline of five months for the simulation. The first results can be expected as soon as in April, the Finance Ministry told
STA on Tuesday, 31 January.
The Ljubljana Faculty of Economics, the Economic Institute of the Ljubljana Faculty of Law, the Koper Faculty of Management and the Maribor Faculty of Economics and Business have also been invited to cooperate in the project.
However, the Institute for Economic Research was the only one to reply to the invitation by the end of the given deadline. Although Reforms Minister Joze P. Damijan is employed at the institute, the Finance Ministry stressed that this did not affect their decision.
"This is an institute with the most experience in this field. It moreover cooperates with a number of Slovenian and foreign institutes such as Ecoplan, Bern and EcoMod from
Brussels," the ministry also said.
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Number of Registered at Employment Service Down by 1% in 2005
An average of 91,889 persons were registered as unemployed at the Employment Service of
Slovenia in 2005
An average of 91,889 persons were registered as unemployed at the Employment Service of
Slovenia in 2005, which is 1% less than in 2004, according to a report by the service.
With the exception of 2002, the number of registered at the service decreased steadily in recent years, dropping by 9.8% in the 2001-2005 period. The registered unemployment rate decreased from 11.6% to 10.1% during the same period.
The recent years have seen a drop in the share of persons with low education among the unemployed. While the share of persons over 40 and that of long-term unemployed also fell, the past five years has seen an increase in the share of women out of work - they accounted for 53.8% of the unemployed last year.
In 2005, employers filed a total of 202,904 vacancies, 60.2% in the service sector, 38.8% in the nonagricultural sector and 1% in the agricultural sector.
Monthly welfare benefits were paid out to 23,294 persons on average, including to 52 citizens from other EU countries.
Slovenia to Achieve Average EU GDP in 8 Years at Current Pace
If Slovenia's economy continues to grow at the rate as it did in 2005 relative to the 15 old EU members, it could achieve the average EU GDP sooner than in 8 years, according to the
Economic Institute of the Ljubljana Faculty of Law
If Slovenia's economy continues to grow at the rate as it did in 2005 relative to the 15 old EU members, it could achieve the average EU GDP sooner than in 8 years, according to the
Economic Institute of the Ljubljana Faculty of Law.
While the final GDP figures for 2005 are not out yet, the institute forecasts in its latest edition of Economic Trends that the economy will expand to the tune of 4.5% this year.
However, should economic growth abroad lag 20% behind projections, Slovenia's GDP would grow by only 4.1% due to a slowdown in exports, imports and investments.
According to the institute's projections, faster growth in the EU and "normal" domestic economic activity could significantly accelerate exports and imports.
As a result, inflation would hover around 2.2% this year and the rate of unemployment drop substantially after a temporary increase early in the year.
The institute is upbeat about the effect of petrol prices, saying that an increase similar to last year's (12%) would affect only inflation, edging it up 0.2 percentage points to 2.4%.
Yet in the event that oil gets "radically" more expensive (over 20% on an annual level), inflation could soar to above 3.1%.
Analysing data for 2005, meanwhile, the report finds troubling signs of wage growth outpacing nominal GDP growth, especially in the tradeable sector, against a backdrop of buoyant export growth and lower unemployment.
FINANCE
Jansa: Oil Price Only Obvious Danger on Path to Euro
The price of oil is the only obvious danger to Slovenia's efforts to meet all the criteria for the adoption of the euro by 2007, according to PM Janez Jansa
The price of oil is the only obvious danger to Slovenia's efforts to meet all the criteria for the adoption of the euro by 2007, according to PM Janez Jansa.
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"However, we do not expect it [the price] to rise so high as to prevent us from reaching this goal," Jansa said at a Q&A session on Monday, 30 January at the National Assembly. He was answering a question from ruling Slovenian Democrats (SDS) MP Joze Tanko.
Jansa said that Slovenia was well on track to adopting the euro in 2007 as it is currently the only one among the euro-zone aspirant countries to meet three of the four Maastricht criteria.
He pointed out that it was only a matter of time until Slovenia met the only remaining criteria, the exchange rate mechanism stability (ERM II): the obligatory two-year participation in the mechanism will be achieved in June.
Bajuk Defends Decision to Let DARS Take Out Huge Loans
Finance Minister Andrej Bajuk has spoken up in defence of the government's decision to allow the Motorway Company (DARS) to take out loans in excess of EUR 1bn until 2010
Finance Minister Andrej Bajuk has spoken up in defence of the government's decision to allow the Motorway Company (DARS) to take out loans in excess of EUR 1bn until 2010.
The government would like to conclude the motorway programme promptly, but it will also pay attention to Slovenia's public finance upon eurozone entry, he told the press as he presented the bill on state guarantees.
The bill, which Bajuk presented at a press conference together with Transport Minister Janez
Bozic in Ljubljana on Tuesday, 31 January, allows DARS to take out state-guaranteed loans worth EUR 1.03bn until 2010.
According to Bozic, the bill ensures the funding necessary for the construction of 90% of the
Slovenian motorway network, that is 516.5 out of 572.6 kilometres planned for construction.
As much as EUR 47.57m will be needed in 2006, Bozic added. The loans or guarantees will be repaid with licence fees, which he expects will increase in the next few years.
Bajuk meanwhile stressed that DARS has been re-incorporated as a joint stock company and is entirely owned by the state, yet, is not a part of public finances.
Therefore, Bajuk continued, its budget funds will drop by SIT 19.2bn (EUR 80.14m) in 2006 and by SIT 12.6bn (EUR 52.6m) in 2007. "We believe the same goals can be achieved with increased indebtedness," he added.
Bozic moreover announced that Slovenia intends to draw even more money from the EU's cohesion funds between 2007 and 2013, that is from EUR 250m to EUR 300m.
The bill, which is scheduled for fast-tracking in parliament next week, was endorsed on
Thursday, 2 February by the parliament's committee on finance and monetary policy despite protests by opposition MPs, who doubt DARS would even be able to repay the loans.
The committee for transport endorsed the second piece of legislation required for the loans, the bill on state consent to DARS to take out loans and issue bonds for motorway construction.
NLB Pre-Tax Profit up 9% in 2005
Nova Ljubljanska banka (NLB), Slovenia's largest bank, posted a pre-tax profit of SIT 15bn
(EUR 62.6m) in 2005, up 9% over the year before according to Slovenian Accounting
Standards, indicates the bank's preliminary assessment for the year
Nova Ljubljanska banka (NLB), Slovenia's largest bank, posted a pre-tax profit of SIT 15bn
(EUR 62.6m) in 2005, up 9% over the year before according to Slovenian Accounting
Standards, indicates the bank's preliminary assessment for the year.
The bank's total assets meanwhile rose by 19.4% to SIT 2,226.2bn (EUR 9.29bn), the NLB said in a press release on Tuesday, 31 January. The average pre-tax return on equity increased from 11.9% in 2004 to 12.5% in 2005.
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It is estimated that loans to the non-banking sector increased by over 20% to SIT 1,137.4bn
(EUR 4.75bn) year-on-year, with interest revenues up marginally to SIT 38.1bn (EUR
159.03m), the press release reads.
Almunia Says Slovenia Meeting all Euro Criteria
Joaquin Almunia, the European commissioner for economic and monetary affairs, has said that Slovenia is currently fulfilling all criteria for the adoption of the euro, which it plans to introduce on 1 January 2007
Joaquin Almunia, the European commissioner for economic and monetary affairs, has said that Slovenia is currently fulfilling all criteria for the adoption of the euro, which it plans to introduce on 1 January 2007.
If the assessment was made today, Slovenia would fulfil all criteria, he said in Brussels on
Wednesday, 1 February. Yet since the risk assessment will be made in the coming months, the
Commission will closely monitor the situation, as there are still some risks.
According to him, this assessment places Slovenia in a more favourable position than Estonia and Lithuania, the other two EU members planning on adopting the euro next year.
Lithuania's inflation is slightly above the reference value according to the latest data.
Meanwhile, there is a chance that Estonia meet the inflation criterion this year, but this is likelier to happen next year, according to Almunia.
In any case, all three countries have made outstanding progress, Almunia said, adding that the achievements would not be overshadowed by the fact that not all may end up fulfilling the criteria by the end of the year.
He indicated that the European Commission would release the next convergence report in
October, assessing whether the three countries are ready for the euro changeover.
A similar report would then be released by the European Central Bank (ECB) and if the assessments are positive in both instances, the Commission would enter request with the EU
Council for expansion of the eurozone to one or more members, he added.
Government, Central Bank Happy with Commission's Grades
The government and the central bank are pleased with the grades the European Commission has given Slovenia for efforts to get ready for the euro
The government and the central bank are pleased with the grades the European Commission has given Slovenia for efforts to get ready for the euro.
Finance Minister Andrej Bajuk said that the European Commission's report on Slovenia's readiness to adopt the euro is a positive signal for the country.
"This report makes it clear that we have achieved everything that has been demanded of us as far the Maastricht criteria are concerned," Bajuk said.
He added that Slovenia now needed to continue meeting the criteria and improve its macroeconomic stability for its own good.
Moreover, Bajuk explained that Slovenia shared the European Commission's concerns about the long-term sustainability of the Slovenian pension purse.
Slovenia, said Bajuk, is not the only country that needs to tackle the stability of its pension system, although the matter is somewhat accentuated in Slovenia because of its extremely low birth rate.
Moreover, Bajuk denied that Slovenia returned to full pension-wage indexation with a law adopted last year, as claimed by the Commission.
Instead, the new government only prevented the expansion of the pension-wage gap caused by legislative changes adopted by the previous government.
Meanwhile, Bank of Slovenia Vice Governor Andrej Rant echoed Bajuk's view that the
European Commission's report was positive for Slovenia.
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The good grades are a result of suitable long-term monetary, fiscal and income policies, he claimed.
Slovenian Euro Coins to be Minted in Finland
Slovenia is expected to join the eurozone in the beginning of 2007
The Slovenian central bank has chosen the Mint of Finland to produce Slovenia's euro coins.
The Bank of Slovenia chose the Finnish mint ahead of four other European mints that entered bidding to make Slovenian euro coins.
According to the central bank, the Mint of Finland will mint 234 million euro coins that
Slovenia is to put into circulation when it adopts the common European currency.
The Bank of Slovenia issued the call to tenders for the production of euro coins in November of last year.
Slovenia is expected to join the eurozone in the beginning of 2007.
Regulation Sets Criteria for State Aid
The government has adopted a regulation on aid to troubled companies which sets down the criteria for defining troubled companies that are eligible for state aid
The government has adopted a regulation on aid to troubled companies which sets down the criteria for defining troubled companies that are eligible for state aid.
The amendments, which were adopted on Thursday, 2 February in accordance with the act on aid for troubled companies, furthermore stipulate the mandatory components of the restructuring plan and criteria for obtaining loans and guarantees.
According to the amendments, whether a company can qualify as a troubled company will be determined on the basis of annual reports for the past three years, which will be compared to industry rivals.
The eligibility criteria include total capital to long-term assets, equity financing rate, longterm financing rate, debt to equity ratio, quick ratio and productivity.
In the restructuring programme, the companies will have to provide an analysis of the causes for the problems, while the programme itself must include restructuring objectives, duration, strategy, projected results and other measures.
The objective of the restructuring is the long-term ability of a company to survive, the regulation says.
The use of the funds will be monitored by the Economics Ministry.
International Forum Discusses Flat Tax Pros and Cons
Advocates and opponents of flat tax met at Bled to discuss the pros and cons of the controversial measure, which presents one of the centrepieces of the government-sponsored economic reforms
Advocates and opponents of flat tax met at Bled on Friday, 3 February to discuss the pros and cons of the controversial measure, which presents one of the centrepieces of the governmentsponsored economic reforms.
Slovenian government is in favour of flat tax, however as it has not yet drafted a final proposal on the measure, it is open for opinions of experts and states that have already implemented or are in the process of implementing the measure, Finance Minister Andrej
Bajuk said.
Bajuk, addressing the participants of a two-day international forum on the issue, added that implementation of the flat tax in some states put competitive pressure on others as well.
Therefore foreign and domestic experts confronted their opinions at the two-day event that opened today in the tourist resort of Bled. The forum was also attended by representatives of mainly SE European states and new EU members.
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Bajuk added that flat tax would make Slovenian economy more competitive as well as simplify the tax system. "However, the state also intends to take care of those who would lose out because of the move," Bajuk said.
One of ideologists behind flat tax, Alvin Rabushka of the Stanford University, said that flat tax increases the competitiveness of the economy in the long term as well as improves the living standard for all.
While the transition to the flat tax might be difficult, its negative effects are short-term only,
Rabushka added.
Jegor Gaidar of the Moscow institute for transitional economies said that tax revenues have actually increased in Russia after the country implemented a flat tax. Taxes are harder to evade under the new system, Gaidar added.
Michael Keen of the International Monetary Fund said that flat tax lowers the tax evasion rate and maximises revenues. Such a system is much simpler and it also eliminates numerous exemptions and tax relieves.
Meanwhile opponents of the flat tax said that analyses have shown that a flat tax system is not simpler, nor does it increase revenues.
Richard Murphy of UK-based Tax Research pointed out that flat tax cannot sustain a modern state. Moreover, a progressive tax system could also be made simple.
However a flat tax would increase the number of people who evade taxes. Such a system cannot work because it could be easily subverted, Murphy added.
Joze Mencinger of the Ljubljana Institute for Economic Research meanwhile pointed out that there is no need for a radical reform that could have a detrimental effect on the economy and social cohesion.
"I am not saying that higher profits would cut investments in research and development, however there is no evidence that money would be used this way. There is also no evidence that economic growth increases if R&D gets more funding," Mencinger pointed out.
NKBM Supervisory Board Approves Business Plan
The supervisory board of Slovenia's second-largest bank, NKBM, approved in Maribor the management's business plan
The supervisory board of Slovenia's second-largest bank, NKBM, approved in Maribor on
Friday, 3 February the management's business plan.
Chief supervisor Andrej Svetina denied any suggestions of personnel changes at the bank, adding that the supervisors alone could not decide on such issues as they have to take into account the opinion of the government. The state is the bank's majority owner.
The supervisory board nevertheless called on the management to push for more aggressive growth. Svetina explained that the supervisors will hold the management of Nova kreditna banka Maribor accountable should targets not be met.
"If the bank wants to become a market leader in segments and expand throughout Slovenia, it will have to work hard in the next few years," he explained.
Slovenian Financial Group Planning Insurance Business in Croatia
The group, which owns life insurer Slovenica Zivljenje, said that it is currently studying the best strategy for entering the Croatian market, including for obtaining all the necessary licenses
Slovenian financial group KD Holding, part of the asset management firm KD Group, is planning to launch a life insurance business in Croatia this year.
The group, which owns life insurer Slovenica Zivljenje, said that it is currently studying the best strategy for entering the Croatian market, including for obtaining all the necessary licenses.
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KD Holding announced this after a Croatian business website reported earlier in the week that the Slovenian group was planning to enter Croatia in the second half of the year.
Business.hr reported that KD Holding's plan for breaking on to the Croatian market was not yet finalised, adding that the group could opt either for a takeover of a Croatian insurer or establish its own subsidiary in Croatia.
According to the website, KD Holding intends to take a decision on the entry strategy in the next month or two.
Economists Say Flat Tax Bad for Welfare
Economists from the central bank and Finance Ministry have said the introduction of flat tax in Slovenia would hurt welfare and would also likely not result in a rise in efficiency
Economists from the central bank and Finance Ministry have said the introduction of flat tax in Slovenia would hurt welfare and would also likely not result in a rise in efficiency.
Speaking at an academic forum on flat tax in Bled on Saturday, 4 February, Damjan
Kozamernik of the Bank of Slovenia said that Slovenia needed to study carefully a decision to implement flat tax.
According to him, his research has led him to the conclusion that flat tax is bad for welfare compared to progressive tax system.
"Implementing flat tax has adverse effects on the welfare system, while it also often negatively influences production and efficiency compared to rival systems," Kozamernik said.
In his opinion, Slovenia would be better off modifying the current system of progressive taxation.
This view was echoed by Gonzalo Caprirolo of the Finance Ministry, who believes Slovenia should build on what it already has.
The government has come up with very ambitious reforms, which need to be scrutinised,
Caprirolo said.
Flat tax would bring redistribution of the tax load, with people on a below-average income being taxed more than now, he said.
According to him, the system would increase the gap between the rich and the poor and bring down Slovenia's social model.
Meanwhile, the introduction of flat tax would likely not bring great savings for employers, meaning that very little would be gained in the way of competitiveness, he said.
"It is imperative that Slovenia launches a comprehensive debate to examine all possibilities,"
Finance Minister Andrej Bajuk said in his closing statement at the two-day event that was organised by the Financial Excellence Centre.
Euro-Tolar Price Tags Mandatory as of 1 March
Dual pricing is a part of the government's efforts to raise consumer awareness in the run-up to the adoption of the euro, scheduled for 1 January 2007
In only a few weeks prices of all goods and services will have to be designated in tolars as well as euros in line with the act on double pricing which becomes effective on 1 March. Dual pricing is a part of the government's efforts to raise consumer awareness in the run-up to the adoption of the euro, scheduled for 1 January 2007.
Double prices will be mandatory for 16 months, until June 2007. The initial period is designed to give consumers a feel for the euro and is informative in nature, as the final tolar-euro exchange rate has not been fixed yet. In this period, the parity rate of SIT 239.64 per euro will be used.
In the second half of the year, after Slovenia has spent the required two years in the ERM II exchange rate mechanism, the exchange rate will be fixed. From then on, double pricing will no longer be merely informative. Double price tags will be a phased out in June 2007.
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According to the act, the conversion rate must be precise to three decimals, whereby prices converted from tolars to euros will be rounded up to the nearest cent. Invoices will not state all prices in euros, merely the total.
There are a few exceptions stipulated in the act. Retailers will thus not have to have euro labels for units (kilo, litre, etc.) of products but only the retail price. Nor will double prices be required on scale displays (for fresh produce).
A similar system will be in place for delicatessen. The government argues that the purpose of the act will be achieved merely by having a price list in both currencies at a visible position.
Similarly, per litre petrol prices at filling stations will only be labelled in euros in a visible position, not on the petrol pump itself. In catalogue sales, prices can be given in tolars only, but the conversion rate must be clearly stated and the catalogue must have an attached price list in euros for all products.
There are also exceptions for the sale of books and other publications, and gaming. Moreover, small retail outlets with up to ten employees will not be required to have double price tags, but they have to have a system allowing the consumer to convert and compare the prices. The same goes for small trade crafts.
Farmers selling goods directly to consumers will be exempt, as well as companies that carry out transactions in euros.
Despite numerous exemptions, there are retailers who will not be able to comply with the requirements, notably companies for which double pricing would represent an unacceptable financial and technical burden.
The act therefore stipulates that the Economics Minister can adopt a regulation introducing additional measures.
Preparations for Dual Pricing Well Under Way
Slovenian companies are well prepared for the introduction of dual price labelling in tolars and euros, and consumer awareness is also good
Slovenian companies are well prepared for the introduction of dual price labelling in tolars and euros, and consumer awareness is also good, the head of the directorate for the internal market at the Economics Ministry, Peter Puhan, said in an interview for STA.
The prevention of exorbitant price hikes would also receive a boost from the monitoring project named pricewatch, which will be organised by the Consumer Protection Office.
In several other countries retailers and businessmen took advantage of the adoption of the euro to raise prices. Catering, logistics, health care and other services will therefore be particularly closely monitored, he said.
Puhan believes that with close monitoring, Slovenia can achieve a lower number of unjustified price hikes than in the other countries of the eurozone.
The law has precisely laid down the rules for conversion and rounding off, and the market inspectorate will be keeping a close eye on developments, "so there should be no problems in this area", Puhan said.
The early introduction of double prices means consumers will quickly get used to calculating prices in the new currency and companies will be forced to think more seriously about the adoption of the euro.
The act on dual pricing will come into force on 1 March. Puhan is confident that it is well prepared, as it is based on the Austrian solutions, which proved as the best model in Europe.
Businesses are generally well prepared for dual pricing, but should there be difficulties following the enactment of the act, the minister of economics will be able to adopt additional measures.
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Pharmacies which provide prescription drugs and border shops where prices were calculated in euros, were said to be exceptions. Tickets on buses and trains sold outside the central computer system would also be exempt from dual-pricing.
The cost for retailers is expected to be about SIT 7.1bn (EUR 29.6m), according to analyses by the ministry. "This represents 0.57% of the annual revenues, while the eurozone average is
0.75%," said Puhan.
"Of course, changing currencies costs something, but we hope that in the end we will gain something by adopting the euro, in the same way we gained when we joined the EU", he said.
Businesses are worried most about a possible change in exchange rate once the rate between the euro and the tolar is fixed. According to some calculations, this could cost SIT 1.24bn
(EUR 5.2m).
"The tolar has so far proved very stable," said Puhan. "We can't make any predictions, of course, but we can say with some certainty that there won't be any fundamental changes to the exchange rate when it is fixed."
"Slovenia's prospects are looking very good and we hope that it will successfully conclude its two-year membership of ERM II," he said.
Ljubljana Stock Exchange
The SBI 20 benchmark index shed 57.21 points (1.25%) to 4,590.41
The SBI 20 benchmark index shed 57.21 points (1.25%) to 4,590.41 in a rocky week in which the majority of blue chips traded lower, but which also saw pharma company Krka continue its record-breaking streak and conglomerate Autocommerce post an unprecedented surge.
The action was moderate last week, as SIT 8.06bn (EUR 33.64m) worth of stocks changed hands, including 57% of that in block trading.
Krka, the most active issue on the week, with turnover of SIT 970.8m (EUR 4.05m), added
2.68% last week to close at a new all-time high of 118,408 (EUR 494.19).
The pharmaceutical company was the only big name blue chip to post gains last week.
Among the others, fuel trader Petrol lost 1.9% to SIT 68,963 (EUR 287.83) and home appliance group Gorenje was down 0.85% at SIT 5,415 (EUR 22.60).
The other share to grab headlines last week was Autocommerce, which gained a massive
25.9% to SIT 10,661 (EUR 44.49).
The share hit the ceiling for maximum daily gains of 10% almost every day through
Thursday, 2 February, posting a high of SIT 12,149 (EUR 50.71), nearly double its value from its first day of trading eight days earlier.
Autocommerce's growth was fuelled by a chronic lack of supply, although rumours started to spread that the company had hired a market maker to prop up the price, something the management vehemently denied in a press release on Thursday.
In the end, the share went on to lose 12.25% on Friday, 3 February - the management of the
Ljubljana Stock Exchange had removed daily fluctuation limits for the share - and last deals were even lower, indicating a cooling trend for the share.
The trading was rather slow on the free market. Popular investment funds took their cue from blue chips, trading lower for the most part and pushing the PIX investment fund index down
43.04 points (1.08%) to 3,995.87.
Meanwhile, the BIO bond index shed 0.66 points (0.54%) to 121.18.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.59 (+0.01)
U.S. dollar (USD) - SIT 198.58 (+1.78)
Swiss franc (CHF) - SIT 154.09 (-0.15)
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British pound (GBP) - SIT 352.65 (+3.10)
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REGIONAL INFORMATION
Provinces to be Established in Months, Minister Says
According to Minister for Local Government and Regional Development Ivan Zagar, the required constitutional changes for the establishment of provinces should be adopted in two to three months
Minister for Local Government and Regional Development Ivan Zagar has told a group of mayors that the government is bent on establishing provinces.
According to Zagar, the required constitutional changes for the establishment of provinces should be adopted in two to three months.
The adoption of the necessary constitutional changes, which require a two-thirds majority in parliament, would be "followed by changes to legislation and the establishment of provinces,"
Zagar said.
He told a group of mayors from NE Slovenia that the government was also in the midst of drafting legislation on local financing.
Meanwhile, mayor of the NE Slovenian town of Ptuj, Stefan Celan, said he doubted the procedures for establishing provinces could be carried out quickly enough to allow timely phasing of EU funds.
He proposed that the government opt instead for the prompt creation of development regions.
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BRANCH INFORMATION
Telecoms Watchdog Issues SMP Designations for Mobile Operators
Slovenia's telecommunications regulatory body has handed out significant market power designations to three Slovenian mobile operators
Slovenia's telecommunications regulatory body has handed out significant market power designations to three Slovenian mobile operators. All three will have to implement measures to keep their positions on the market in check, albeit to varying degrees.
The Agency for Post and Electronic Communications (APEK) designated Slovenia's leading mobile operator, Mobitel, second-largest operator, Simobil, and third-largest operator, Vega, as having significant market power on the wholesale mobile call termination market.
The agency assigned special obligations to all three aimed at keeping in check their dominant market position. The obligations include provisions related to access for other operators to their network, APEK said.
Vega was assigned the fewest obligations, while Mobitel got the most, including some related to pricing competition.
According to APEK, the SMP designations were distributed in line with Slovenian telecommunications legislation (which is based on EU regulations).
This is one of the measures with which Slovenia is answering a warning received in July from the European Commission regarding competition in telecommunications.
The warning, issued by the Commission, concerned the "legal vacuum" caused by the cancellation of a number of SMP designations in a time that new telecommunications legislation was entering into force.
New SMP designations in line with new legislation are now being issued, with the majority already in place for fixed operators, while mobile operators are currently in the midst of being scrutinised.
Slovenian Dairy Farmers Saved by Italian Market
The Chamber of Agriculture and Forestry was one of the organisers of the round-table discussion on the future of Slovenian milk
A round-table discussion on Wednesday, 1 February on the future of Slovenian milk production found that the price of milk would fall even further and Slovenian dairy farming would probably cease to exist if it was not for the Italian market.
However, representatives of the Slovenian dairy farms did not agree with this and said that while without Italian competition prices would admittedly be lower, Slovenian dairy farms would get out of the red quicker and this would prove better in the long term.
The director of the Ljubljanske mlekarne dairies also compared the Slovenian dairy industry with its counterparts in Europe, which received more support from the state, while his own company received only 7% investment support.
The director of the dairy company from Celje, Celeia, said European standards were not realistic. "What good is it if we get praised by inspectors, but receive no funds despite having invested huge amounts of money to achieve European standards," he said.
According to the director of the Slovenian Association of Coops, EU membership means there is unrestricted competition on the market, so Slovenian dairy farmers must decide if they would compete amongst themselves or become partners.
He said farmers themselves could do much to improve the future of the dairy industry, but they must demand certain things from the country and the EU.
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A representative of the Chamber of Agriculture and Forestry, one of the organisers of the event, said dairy farming was Slovenia's most important farming activity and was responsible for other jobs as well.
Milk production was said to be steadily increasing in recent years. In the 2004/2005 period, milk producers sold almost 500 million litres, which represents roughly a 40% increase compared with the past two decades.
According to the Chamber, there are currently about 10,150 dairy farmers in Slovenia, and there are other indications that Slovenian milk production is increasing and that the quality is improving.
Pricewatchers to Prevent Price Hikes during Euro Changeover
The Slovenian Consumer Protection Office and the International Consumer Research and
Testing Institute have signed a pricewatch agreement aimed at monitoring the prices in the run-up to Slovenia's euro changeover, planned for the start of 2007
The Slovenian Consumer Protection Office and the International Consumer Research and
Testing Institute have signed a pricewatch agreement aimed at monitoring the prices in the run-up to Slovenia's euro changeover, planned for the start of 2007.
By monitoring the prices and through the act on double pricing, the two institutions want to prevent exorbitant price hikes, the head of the directorate for internal market at the Economics
Ministry, Peter Puhan, told the press on Thursday, 2 February.
Indeed, Slovenia wants to prevent something that has happened in several other EU states, where the prices of services in particular rose excessively after the changeover, Puhan added.
The directorate also aims to prevent a rise in inflation caused by the changeover. Such inflation rise reached between 0.1% and 0.2% in the countries that have previously joined the eurozone.
Price monitoring will cost the Consumer Protection Office SIT 5.3m (EUR 22,100). The office's director Ales Grbec said that they have decided on monitoring the prices because of the positive feedback by countries that have had such a programme.
Breda Kutin, the head of the International Consumer Research and Testing Institute and president of the Consumers' Association, an NGO, has meanwhile said that Pricewatch would single out those individuals "that could use the euro changeover as an opportunity".
The institute will keep an eye on 104 consumer products, including services. They will monitor 294 locations throughout Slovenia, Kutin explained.
Agriculture Ministry to Focus on Three Major Projects in 2006
The Agriculture Ministry will be focusing on three major projects in 2006: insuring crops against natural disasters, taking a decision on the reform of farm subsidies and drawing up the national strategic project for rural development for the 2007-2013 period
The Agriculture Ministry will be focusing on three major projects in 2006: insuring crops against natural disasters, taking a decision on the reform of farm subsidies and drawing up the national strategic project for rural development for the 2007-2013 period, Agriculture
Minister Marija Lukacic told the press on Friday, 3 February.
According to Lukacic, the ministry is drafting a regulation on the insurance of crops against hailstorm, fire, lightning and spring frost. The insurance will cover only loss of quantity, not quality, she explained.
The measure is designed to reduce risk and expand crop insurance coverage to beyond the current scope of 10%. "Our goal for this year is at least 20%," she explained, adding that the state would co-fund up to 50% of the premiums.
Coverage will be provided by commercial insurance companies under a contract with the
Agency for Agricultural Markets and Rural Development.
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The project will be evaluated after one year whereupon it will be decided whether to carry on or create a national mutual insurance company, according to Lukacic.
Debates on the reform of direct farm payments have meanwhile narrowed the choice down to two systems: a purely regional scheme or a combined scheme with the lowest possible redistribution effects.
The ministry will make its recommendation after another public debate, which is scheduled for Monday. According to plans, the project would be finalised next year.
The ministry's third main objective, a national strategic project for rural development, is to be finalised by the end of the month to serve as a basis for the rural development programme for the 2007-2013 period.
The ministry expects about EUR 800m for this measure over the period, with about 30% of the funds designated for improving the competitiveness of agriculture, 50% to 60% for environment and landscape protection, 2.5% for methodologies and other tools, and the rest for raising the quality of rural life and diversification of economic activities.
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COMPANIES
SOD Transfers Stake in Spa Operator to KAD
The state-run Restitution Fund (SOD) has transferred its 6% stake in Slovenia's largest spa operator, Terme Catez, to fellow state-run fund, Pension Fund Management (KAD).
The state-run Restitution Fund (SOD) has transferred its 6% stake in Slovenia's largest spa operator, Terme Catez, to fellow state-run fund, Pension Fund Management (KAD).
The agreement on the SIT 1.2bn (EUR 5m) transfer was signed 27 January with the transaction expected to be carried out within days, SOD said in a press release on Monday, 30
January.
The motive behind the sale is unclear. Neither SOD nor KAD representatives were available for comment.
Meanwhile, Economics Minister Andrej Vizjak said that the two state-run funds would not be making changes to their portfolio until the government takes a final decision on their strategy.
The Terme Catez transaction, said Vizjak, is not an ownership change, as the state would continue to control the same stake as before.
KAD now owns nearly 20% of Terme Catez and is its biggest single owner. Publishing company DZS is the second-biggest owner with 10.13%, followed by investment fund
Maksima (9.88%).
DZS had previously expressed an interest in buying SOD's stake.
Major Trimo Owners Publish Buy-Out Bid After All
A consortium of five major owners of Trimo, the Trebnje-based maker of pre-fabricated construction components, have published a bid to buy out the minority shareholders, offering
SIT 7,300 (EUR 30.46) per share
A consortium of five major owners of Trimo, the Trebnje-based maker of pre-fabricated construction components, have published a bid to buy out the minority shareholders, offering
SIT 7,300 (EUR 30.46) per share.
The bidders - the bank Probanka, its leasing arm Probanka Leasing, investment firms
Medaljon and Zlata moneta II, and Trimo Investments - which together own 459,271 shares or some 42% of Trimo, said in a press release on Tuesday, 31 January that the bid would be open through February.
The goal of the bidders is to acquire at least another 95,778 Trimo shares to raise their stake to over 50%.
According to an agreement signed by the major owners earlier in the month, Probanka would become owner of 39.8% of the total shares, Medaljon would hold 32%, Zlata moneta II 28% and Probanka Leasing and Trimo Investments 0.1% each.
The bidders had announced their takeover intent in late November 2005. Yet they backed down in December, saying that it was impossible to harmonise their interests and make the carry out the necessary procedures at the Securities Clearing Corporation (KDD).
Telekom Fights Local Loop, SMP Rulings
The national telco Telekom Slovenije has decided to appeal to the Economics Ministry against rulings by the telecommunications regulatory body on pricing of access to its local loops and significant market power designations
The national telco Telekom Slovenije has decided to appeal to the Economics Ministry against rulings by the telecommunications regulatory body on pricing of access to its local loops and significant market power designations.
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Telekom decided to fight a ruling issued earlier this month by the Agency for Post and
Electronic Communications (APEK) that requires that Telekom reduce its prices for access to local loops by between 13% and 48%.
The company argues that, at the prices demanded by APEK, it would not even cover its costs.
The ruling is illegal, as APEK does not have the power to annul parts of a pricing scheme and determine prices on its own, Telekom said.
Moreover, Telekom believes that APEK has failed to explain the term "reasonable prices", which was used as a basis for issuing the 13 January ruling. Implementing the ruling would cause extensive damages to Telekom, the company added in its press release on Tuesday, 31
January.
Meanwhile, Telekom also decided to appeal significant market power designations given to it by APEK. In an appeal lodged on 27 January, Telekom argues that SMP designations for markets 3, 5, 8, 9 and 10 related to fixed line services are wrong and inapplicable.
Izidor Goes to www.vecer.com/podstresje
A webpage of the Maribor-based daily paper Vecer has won the Izidor award for the most innovative web project
A webpage of the Maribor-based daily paper Vecer has won the Izidor award for the most innovative web project. A jury of experts decided to reward Vecer's anthological section
"Podstresje" (The Loft) located at www.vecer.com/podstresje.
The prize was conferred as part of the Net conference in Ljubljana on Monday, 30 January which discussed media and Internet innovations and their role in companies and the society as a whole.
A prize was also awarded to the webpage chosen by Internet users, with the on-line dating site www.kupid.com coming out on top.
A total of 68 projects vied for the prize this year, submitted by leading companies, banks, insurance companies, Internet media and info portals.
The main criterion was an innovative approach in combining product development, communication models and business processes.
The Net conference was organised by GV Izobrazevanje, a publishing and education establishment.
Aktiva Backtracking on Small Shareholder Squeeze
According to a press release from the company, the management has decided to call a new general meeting to reduce the nominal value of the share from SIT 1m (EUR 4,174) to SIT
1,000 (EUR 4.17) so as to allow small shareholders to keep their shares
Investment company Aktiva Invest has decided to backtrack on its decision to squeeze out small shareholders with a massive increase in the nominal value of its share.
According to a press release from the company, the management has decided to call a new general meeting to reduce the nominal value of the share from SIT 1m (EUR 4,174) to SIT
1,000 (EUR 4.17) so as to allow small shareholders to keep their shares.
Previously, a decision was taken at an AGM to increase the nominal value of the Aktiva
Invest share to SIT 1m (EUR 4,174).
This would have squeezed out many small shareholders, especially those who received their stakes in privatisation, because their investments do not amount even to one new share.
Although the company was to pay those squeezed out dividends in the value of their shares, the move which raised a storm as it was widely viewed as yet another case of small shareholders having no say in company operations.
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Responding to numerous requests by small shareholders to be allowed to stay on, the management of Aktiva Invest decided to hold another general meeting to bring down the nominal value of the shares again.
If any of the small shareholders still want to sell their share, the company intends to come up with a "suitable offer" to buy out their stakes, the company added in a press release on
Tuesday, 31 January.
Meanwhile, the company rejected suggestions that the squeeze out was being carried out at the expense of small shareholders, who had no say in the move.
Aktiva Invest is in nearly outright ownership of Amsterdam-based Aktiva Holdings, which is run by 40-year-old Slovenian managerial guru Darko Horvat, who made his fortune during the privatisation of Slovenian companies.
National Telco Gets Two New Supervisory Board Members
Shareholders of the national telco Telekom Slovenije voted in line with the government proposal and replaced two members of the company's supervisory board
Shareholders of the national telco Telekom Slovenije voted in line with the government proposal and replaced two members of the company's supervisory board as they met in
Ljubljana on Tuesday, 31 January.
The shareholders have thus replaced Matjaz Jansa of the Economics Ministry's directorate for electronic telecommunications and Joze Zrimsek of the Education Ministry's information society directorate.
Jansa's stepping down was caused by the European Commission's formal warning in which it stated last year that Slovenia failed to ensure full independence of the national telecommunications regulatory authority.
The Commission claimed that the ministry in charge of telecommunications had certain regulatory tasks and was simultaneously involved in the management of the fixed line phone operator, while the two activities should be separated.
However, the government gave no reason for replacing Zrimsek, with Jansa also refusing to comment on the decision. One possible reason lies in Zrimsek's heading of the directorate, which could potentially irk the Commission.
Jansa was replaced by Pavel Zakelj, a former member of the Telekom management, while
Zrimsek's replacement Andrej Brodnik teaches computer science at Primorsko University.
The two new supervisory board members started their duties. Their mandate runs out at the same time as the mandate of the current supervisory board.
Commission In Favour of Sale of Luka Koper's Shares
A commission of the city of Koper decided to propose to mayor Boris Popovic to take the offer made by the state-run SOD fund and sell half of the city's stake in port operator Luka Koper
A commission of the city of Koper decided to propose to mayor Boris Popovic to take the offer made by the state-run SOD fund and sell half of the city's stake in port operator Luka
Koper.
The head of the commission Igor Hrvatin told STA on Tuesday, 31 January that the commission chose the offer by the Restitution Fund (SOD) which would buy 461,538 shares for SIT 3bn (EUR 12.52m).
SOD was the only bidder to respond to a public invitation to tender, published by the commission on 13 December last year in the Delo and Financial Times dailies. The state-run fund offered to buy half of the city's 6.63% stake in Luka Koper.
SOD, apart from being the only bidder, also submitted a full and timely offer, the commission added. The city, which plans to use the funds for a new primary school, will decide on the sale at the 16 February session of the city council.
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Ljubljana Airport Signs up Budget Carrier Wizz Air
Competition on routes from Ljubljana to London and Brussels is about to get fiercer, as Wizz
Air, the biggest no-frills carrier in Central and Eastern Europe, will start operating scheduled flights on the routes in May
Competition on routes from Ljubljana to London and Brussels is about to get fiercer, as Wizz
Air, the biggest no-frills carrier in Central and Eastern Europe, will start operating scheduled flights on the routes in May.
This is a landmark step in the airport's plans to double the number of passengers, Vinko
Moze, the chairman of airport operator Aerodrom Ljubljana, told the press on Tuesday, 31
January.
Wizz Air is the ninth airline operating scheduled flights to and from Ljubljana Airport, and the second budget carrier after Easyjet.
"We want to create opportunities to allow Slovenians to travel at budget prices," Wizz Air director Jozsef Varadi said.
He is convinced the airline will help boost tourist numbers in Slovenia and indirectly increase the number of jobs around the airport.
Moze agreed, saying that "flight guests are especially welcome, as they are the biggest spenders" among tourists.
The joint decision to have Wizz Air fly to Brussels's Charleroi airport was taken after it was established that "we are short on Benelux," according to Zmago Skobir, Aerodrom Ljubljana board member.
Meanwhile London, which is already served by Slovenian flag carrier Adria Airways and budget carrier Easyjet, is an "insatiable market," he said. Wizz Air will thus fly to Luton
Airport four times a week.
For Wizz Air, this is just the beginning of cooperation with Ljubljana Airport. Talks are underway on routes to Italy, Spain and Scandinavia, according to Skobir.
The young airline, established in May 2004, plans to become the biggest budget carrier in
Slovenia, a position it has already achieved in Poland and Hungary.
In the initial promotion period, tickets to London and Brussels will cost 28 euros with taxes.
Mercator Capital Increase Wraps Up
The capital increase was carried out at a per-share price of SIT 38,000 (EUR 158.61) plus interest
The supply of fresh capital to retailer Mercator, worth SIT 24bn (EUR 100.2), wrapped up on
Tuesday, 31 January, the deadline for the purchase of stock. All parties invited to take part have used their allocation fully, bar the company of former Mercator chief exec Zoran
Jankovic, KLM.
The capital increase was carried out at a per-share price of SIT 38,000 (EUR 158.61) plus interest. Whereas the state-owned Pension Fund management (KAD) and Restitution Fund
(SOD) had paid for their respective packages of 106,950 shares in October, asset management firm KD Group purchased the same amount of offered stock on Tuesday, 31 January.
KLM, owned by Jankovic (50%) and four other individuals (12.5% each) has meanwhile collected enough money for 61,670 shares, worth about SIT 2.4bn, Mitja Marinsek, KLM director, told STA.
According to him, KLM in October paid for 40,700 shares. However, the money for the
20,970 purchased shares (SIT 800m/EUR 3.34m) came from Jankovic alone.
The cooperation of KAD and SOD in the capital increase had taken many by surprise considering that the two had offloaded their stakes to food and tourism conglomerate
Istrabenz and brewer Pivovarna Lasko respectively.
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Yet at least SOD did not stay owner for long: Lasko said in a press release on Tuesday, 31
January that it purchased all shares that SOD obtained in the capital increase for SIT 4bn
(EUR 16.7m) or SIT 39,037.4 (EUR 162.94) per share.
Moreover, Lasko has paid up fully for the original stake, although it had a deal with SOD to pay for the stake in instalments over four years. All in all, Lasko thus paid SIT 21bn (EUR
87.65m) for the stake in Mercator.
Yet in a surprise move, Lasko also announced it had offloaded 367,437 Mercator shares
(10.95% of the capital stock) to its subsidiary, brewer Pivovarna Union, at a price of SIT
38,458.54 (EUR 160.52) per share.
Lasko thus directly owns 6.27% of Mercator, with Union holding a 10.95% stake. Lasko said it and Pivovarna Union had financed the purchase with a seven-year syndicated loan.
Petrol Plans EUR 29.21m Profit in 2006
According to the plan, Petrol is to sell 1.9 million of tonnes of oil derivatives, generating SIT
431bn (EUR 1.8bn) in revenue
The supervisory board of fuel group Petrol cleared on Wednesday, 1 February the business plan for the group in 2006, which envisages SIT 7bn (EUR 29.21m) in profits for the country's largest fuel trader.
According to the plan, Petrol is to sell 1.9 million of tonnes of oil derivatives, generating SIT
431bn (EUR 1.8bn) in revenues.
The expected operating results are based on a presumption that the currently valid model of fuel pricing remains in force in the future as well, with the prices being calculated throughout a 28 day period.
Petrol plans to invest SIT 13.9bn (EUR 58m) into capital assets, by expanding its network of gas stations in Slovenia and abroad to a total of 365.
The supervisors also labelled 2005 a successful year as the company met all of its goals, and called an AGM on 14 March.
In 2004, fuel group Petrol posted a profit of SIT 6.95bn (EUR 29m), a 16% rise over the year before, with revenues standing at SIT 352bn (EUR 1.47bn).
Helios Boss Given Manager of the Year Honours
Manager, the monthly business publication, has conferred Manager of the Year honours on long-time chairman of chemical group Helios, Uros Slavine
Manager, the monthly business publication, has conferred Manager of the Year honours on long-time chairman of chemical group Helios, Uros Slavinec.
Slavinec beat out Franjo Bobinac of home appliance group Gorenje and Ales Nemec of automotive parts maker Iskra Avtoelektrika for the coveted title.
In its explanation of the selection, Manager said that Uros Slavinec helped guide Helios to the status of the biggest company in its sector in central and eastern Europe during his 15 years at the helm of the group.
Under his leadership, Helios carried out the acquisition 18 months ago of paints maker Color without any major shocks for the group, the publication said.
"While planning to launch production abroad, Slavinec is not considering scaling back production at home," Manager said.
The winner was selected by a seven-member panel assembled by Manager, chaired by the magazine's editor-in-chief Vita Cajnko Javornik.
The award was given out at a ceremony held in Ljubljana on Wednesday, 1 February.
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Engrotus Reports a 20% Rise in Revenues in 2005
Retail group Engrotus posted operating revenues of SIT 108.6bn (EUR 453.29m) in 2005, an increase of 20% over the year before
Retail group Engrotus posted operating revenues of SIT 108.6bn (EUR 453.29m) in 2005, an increase of 20% over the year before. One of the top three grocers in the country, Engrotus also said its market share in Slovenia has already exceeded 20%.
The non-listed company also reported a 30% surge in profit to SIT 3.5bn (EUR 14.6m) in
2005.
Revenues per employee also rose, Engrotus general manager Aleksander Svetelsek told the press on Thursday, 2 February. They stood at EUR 171,000 in 2005, 5.8% more than in 2005, he added.
Preliminary data show that the Tus group, which includes the retail business, restaurants, cinemas and gas stations, posted sales of SIT 130bn (EUR 542.61m) and a net profit of SIT
4bn (EUR 16.69m) in 2005.
The group, which has 3,328 employees, moreover earmarked SIT 19bn (EUR 79.3m) for investments.
Engrotus plans to invest a further SIT 22bn (EUR 91.82m) for 38 projects in Slovenia this year as well as continue its expansion at home and abroad, especially Macedonia and
Montenegro, Svetelsek said.
According to him, the group will focus on complementing its retail operations with a better offer of gas stations, cinemas as well as entertainment and leisure activities.
At the beginning of 2006, Engrotus opened a shopping centre in Ruse and a cash&carry centre in Celje, while two more stores are to open soon in Mislinja and Prevalje, and another shopping centre in Maribor.
The group plans a 20% or rise in revenues, with the ultimate goal of expanding by EUR 100m per year, Svetelsek added. Given the company's investments and growth, Engrotus intends to employ additional 750 people.
Easyjet Cancels Ljubljana-Berlin Route
Budget carrier Easyjet has confirmed rumours that it would cancel its Ljubljana-Berlin route, effective on 26 March
Budget carrier Easyjet has confirmed rumours that it would cancel its Ljubljana-Berlin route, effective on 26 March. Passenger numbers were satisfactory, but this was nevertheless the least successful of Easyjet's 26 routes to Berlin, STA learnt from the airline.
Easyjet reiterated that it was still "very happy" with Slovenia as a destination and will keep the route to London.
Rumours about the impending shut-down of the route have been rife for a while, as it was impossible to reserve flights beyond 26 March and the company's Slovenian website did not list the summer schedule for flights to Berlin.
The news comes just days after Wizz Air, the biggest no-frills carrier in Central and Eastern
Europe, announced flights from Ljubljana to London and Brussels starting in spring.
Peter Doehle Confirms Interest in Slovenian Shipping Firm
"We would like to own a 100% stake in Slovenian shipping company Splosna plovba Portoroz some day," Johann Doehle, the president of the German shipping company Peter Doehle, told
STA, hereby confirming the German company's interest in the Slovenian firm
"We would like to own a 100% stake in Slovenian shipping company Splosna plovba
Portoroz some day," Johann Doehle, the president of the German shipping company Peter
Doehle, told STA on Thursday, 2 February, thereby confirming the German company's interest in the Slovenian firm.
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"If we take over Splosna plovba, we will replace neither the employees nor the management, as we are very happy with their work," Doehle said.
According to Banka Koper chairman Vojko Cuk, representatives of Peter Doehle said during their visit in Slovenia that they would like to discuss buying the 20% stake in Splosna plovba held by the Koper-based bank.
The German company is not the first to express an interest in the Portoroz-based company,
Cok told STA on Wednesday, 1 February, adding that talks have only been held with Peter
Doehle so far.
Banka Koper and the state together hold more than 50% of Splosna plovba, which is why it would make sense if they decided to sell their stakes together, he added.
Splosna plovba chairman Egon Bandelj refused to comment on the talks between the German company and Banka Koper. He explained that his company has been cooperating with Peter
Doehle for nearly 28 years.
Cement Company Lafarge Posts Record Sales in 2005
Trbovlje-based cement producer Lafarge Cement saw its sales rise 12% in 2005
Trbovlje-based cement producer Lafarge Cement saw its sales rise 12% in 2005, the company's CEO Franci Blaznek said on Friday, 3 February.
The 542,000 tonnes of cement and 9,000 tonnes of clinker sold last year would be enough to build 25,000 residential objects, Blaznek told the press.
Together with their subsidiaries Apnenec and Lafarge Transport, the company generated revenues to the amount of SIT 9.5bn (EUR 39.65m).
Within the Lafarge group, the world's largest cement maker, the Slovenian subsidiary is steadily climbing towards the top as regards its operating trends, Blaznek explained. "We want to become the top company within the group by 2010," he said.
However, the company does not expect to reach the same sales figures in 2006. Meanwhile, it plans to build an EUR 10m desulphurisation plant, which is to become operational in April
2007.
Casino Portoroz Ends 2005 With Profit
Slovenia's second-largest gaming chain, Casino Portoroz, has finished 2005 with a profit of around SIT 100m (EUR 417,000)
Slovenia's second-largest gaming chain, Casino Portoroz, has finished 2005 with a profit of around SIT 100m (EUR 417,000), the first time it has operated in the black for years.
Examining the gaming company's operations in 2005 on Friday, 3 February, the supervisory board of Casino Portoroz said it was pleased with the results.
According to chief supervisor Boris Zupancic, the company ended the year with a profit of
SIT 100m (EUR 417,000) on revenues of SIT 10bn (EUR 41.7m).
"We are extremely happy, as this is this is our first profit in four years," he said.
The supervisors also examined claims of alleged mismanagement at the state-controlled company between 2001 and 2005. Audits suggest a lack of transparency, which is why the supervisors opted to get a legal opinion, Zupancic said.
Takeover Clash Set to End Without Victor
The two state-run funds that control 41% of Iskra announced that they would not be selling their stakes at the price offered by the bidders
The takeover battle between automotive parts maker Iskra Avtoelektrika and the management of electronics group Iskra for control of the latter is set to end without a victor.
The two state-run funds that control 41% of Iskra announced on Friday, 3 February that they would not be selling their stakes at the price offered by the bidders.
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The announcement dents almost all chances the bidders had of gaining control of the electronics group.
The development is an anticlimax to a battle between the bidders that was begun in mid-
December when Iskra Avtoelektrika published its original takeover bid, offering SIT 1,044
(EUR 4.36) per share.
Iskra's management, angered by the moves of a company that it partly owns, responded to the hostile all-cash bid by establishing a company that put forward a counter bid of SIT 1,100
(EUR 4.59) per share on 29 December.
Both companies then raised their bids: first Iskra Avtoelektrika offered SIT 1,110 (EUR 4.63) per share on 18 January; then Maos, the company formed by around 50 leading managers of the Iskra group, said it would pay SIT 1,145 (EUR 4.78) a share.
Seeing its bid outstripped by Iskra's managers, Iskra Avtoelektrika announced earlier in the week that it would pulling out of bidding.
However, the celebrations for Maos were short-lived, as the state-run Restitution Fund (SOD) and Pension Management Fund (KAD) made it clear that even the best of the offers was not high enough for them.
The two funds said in a press release that they would be willing to sell their share at "an appropriate price".
Meanwhile, Iskra chairman Dusan Sesok has told the daily Dnevnik that he is disappointed with the decision of the two funds.
Maos does not intend to raise its bid at this time, although it may consider to do so sometime in the future, Sesok told the daily Dnevnik on Saturday, 4 February.
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SLOVENIA IN BRIEF
EU Ministers for Continuity in Justice and Security Efforts
Justice and interior affairs ministers from Austria and the four EU members to chair the EU in the next few years, among them Slovenia, met in Vienna on Monday, 30 January to discuss the block's future justice and security guidelines.
Five Trade Unions Establish Second Largest Confederation
Five trade unions in the public sector have established a Confederation of Public Sector Trade
Unions, the second largest confederation in the country, secretary of the Trade Union of
Education (SVIZ) Branimir Strukelj said on Wednesday, 1 February. The 81,000 member strong confederation will include about half of all Slovenia's public sector employees. Its members will be the SVIZ, Health (SZSVS), Police (PSS), Health-care (SDZNS) and
University of Ljubljana (NSDLU) trade unions, Strukelj added.
Vzajemna Will Turn to Watchdog Before Re-Incorporating
Mutual health insurance company Vzajemna decided at the AGM on Wednesday, 1 February to wait for the approval of the Agency for Insurance Supervision before it takes a decision to re-incorporate as a joint-stock company.
Aurora Airlines Gets Operating License
The Civil Aviation Authority issued an operating license to Aurora Airlines, allowing the company to lease its first Embraer 120 aircraft to Slovenia's flag carrier Adria Airways,
Aurora Airlines said in a press release on Wednesday, 1 February.
Rupel Congratulates New EU Envoy to Bosnia-Herzegovina
Foreign Minister Dimitrij Rupel congratulated on Thursday, 2 February the new EU envoy to
Bosnia-Herzegovina Christian Schwarz-Schilling, reiterating Slovenia's and his own full support in Schwarz-Schilling's efforts to further the stability and prosperity of the country.
Senior Officials' Wages to be Cut in March
Wages of top civil servants will be reduced in March in accordance with a decree on officials' wages that the parliament passed on Thursday, 2 February alongside the necessary tweaks to the act on public sector wages.
According to Public Administration Minister Gregor Virant, the savings this year alone will amount to SIT 550m (EUR 2.3m), with total savings until
2009 to amount to SIT 1bn (EUR 4.2m).
EU Demands Additional Info on Mercator Sell-Off
The European Commission has asked Slovenian authorities for further information on the disputed sale of Slovenian largest retailer Mercator, which will help the Commission establish whether the sale of a 30% share in the grocer by two state run funds ran contrary to EU regulations on state aid. It is however not known yet when the European Commission plans to send a report nor whether it intends to launch an official investigation into the issue, the
Commission told STA in Brussels on Friday, 3 February.
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Slovenian, Georgian Defence Ministers Discuss NATO Cooperation
Slovenian Defence Minister Karl Erjavec and his Georgian counterpart Irakli Okruashvili discussed Georgia's endeavours to join NATO as they met in Munich on Friday, 3 February.
The ministers, meeting on the sidelines of the 42nd Munich Security Conference, discussed ways Slovenia could aid Georgia in its NATO bid, Erjavec told STA.
PM Sends Condolences to Egypt, Saudi Arabia Over Ferry Disaster
Prime Minister Janez Jansa has sent a cable of condolences to his Egyptian and Saudi counterparts, Ahmed Mohamed Nazif and King Abdullah, over the ferry disaster in the Red
Sea in which as many as 1,000 people are feared to have died.
Erjavec and Ivanov Discuss Ukraine's and Georgia's NATO Accession
On the last day at the 42nd Munich Security Conference, which mainly focused on Russia-
NATO relations, the Darfur crisis and Iran's nuclear programme, Defence Minister Karl
Erjavec and his Russian counterpart Sergei Ivanov held talks on Ukraine's and Georgia's
NATO accession. According to Ivanov, NATO accession of these two countries and Russia's attitude towards this issue depend on the role of the organisation in the future, Erjavec told
STA on Sunday, 5 February.
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