Slovenia Business Week no. 07, February 13th, 2006
Table of Contents:
HEADLINES ............................................................................................................................. 3
Inflation Inches up to 2.4% in January ................................................................................... 3
Gostol-Gopan Opens Factory in Bosnia-Herzegovina ........................................................... 3
Industrial Output Up 3.1% in 2005 ........................................................................................ 3
INTERNATIONAL COOPERATION ...................................................................................... 5
Dubai Conference Calls for Safer Handling of Chemicals .................................................... 5
Environment Forum Focuses on Renewable Energy and Ecotourism ................................... 5
Minister Rupel Receives Credentials from Indonesian Ambassador ..................................... 5
EUROPEAN UNION ................................................................................................................. 7
EU Survey: Slovenians Not Interested in EU Matters ........................................................... 7
Rehn: EU Cannot Act as Judge in Slovenia-Croatia Border Dispute .................................... 7
Drobnic Welcomes Commission's Call for Open Labour Market ......................................... 8
Rehn Hails Slovenia's Support for EU Enlargement .............................................................. 8
Commissioner Rehn Wants EU to Export Stability ............................................................... 9
Trade Unions Believe Services Directive Institutes Social Dumping.................................... 9
Rehn Holds Talks with Drnovsek and EU Affairs Committee ............................................ 10
LEGISLATION ........................................................................................................................ 11
Parliament Passes Industrial Property and Agriculture Amendments ................................. 11
Parliament Passes Act on EUR 1bn Guarantee for Motorways ........................................... 11
Social Democrats Present Bill on Commerce Chambers ..................................................... 11
STATISTICS/FORECASTS .................................................................................................... 13
Trade Gap Expands in December ......................................................................................... 13
2.38 Million Tourists Flock to Slovenia in 2005 ................................................................. 13
EU Survey: Slovenians Believe Globalisation Motivated by Profits ................................... 13
FINANCE................................................................................................................................. 15
Banks to Charge for ATM Roaming .................................................................................... 15
Monitoring to Prevent Price Hikes at Euro Changeover ...................................................... 15
Paychecks to Be Listed in Tolars and Euros from August Onwards ................................... 16
Minister Damijan Denies Union Claims Regarding Flat Tax .............................................. 16
EIB Lends EUR 282m to Slovenia in 2005 ......................................................................... 17
Grawe Collects 12% More Premiums in 2005 ..................................................................... 17
Central Bank Cuts Main Rates by 25 Basis Points .............................................................. 17
Gorenjska Banka Posts Bumper Profits ............................................................................... 18
MPs Confirm Motorway Construction Plan......................................................................... 18
Volumes on the LJSE Meagre in Bearish January ............................................................... 18
Euro the Top Priority This Year for the Finance Ministry ................................................... 19
Swiss Bank Acquires 10% of KD Group ............................................................................. 19
Successors Agree on Division of Share of Former Yugoslav Export Bank ......................... 20
Bajuk Wants the State to Keep Golden Share in Key Banks ............................................... 20
Ljubljana Stock Exchange .................................................................................................... 21
Foreign Exchange ................................................................................................................. 22
REGIONAL INFORMATION ................................................................................................ 23
Nature Protection Office to Conserve Slovenia's Only Salt Meadow .................................. 23
Official Referendum Results Confirm Yes Vote for 12 Municipalities ............................... 23
BRANCH INFORMATION .................................................................................................... 25
Retailers Expect No Troubles With Double Pricing ............................................................ 25
Transport Ministry Plans to Increase Population Mobility .................................................. 25
EU Says Communication Markets In Slovenia Lack Competition ...................................... 26
Passenger Transport Companies Await Double Pricing Well Prepared .............................. 27
Tourism Associations See Problems Ahead in Dual Pricing ............................................... 27
EU Commission Received Notification On Bird Flu in Slovenia ........................................ 28
VURS Head Says H5 Confirmation No Reason for Panic, Urges Caution ......................... 28
COMPANIES ........................................................................................................................... 29
Aluminium Giant to Phase out Outdated Electrolysis Technology ..................................... 29
Health & Beauty Chain Watson Opens Store in Slovenia ................................................... 29
Slivnik Nominates Vecer Editor for Delo Chief Editor ....................................................... 30
Iskra Avtoelektrika CEO Claims Cooperation with Iskra to Continue ................................ 30
Post Delivers More Profits Than Planned ............................................................................ 31
Trimo Management Labels Takeover Bid Friendly ............................................................. 31
Sugar Production to Be Conserved in Ormoz for Two More Years .................................... 31
Sugar Plant Management Pleased with Sugar Production Extension .................................. 32
DARS Gets Last Green Light for Record Loans .................................................................. 33
HSE Offloading Majority Stake in TDR Metalurgija .......................................................... 33
Metal Ravne Hoping for Another Good Year ...................................................................... 33
SLOVENIA IN BRIEF ............................................................................................................ 34
Unions Again Urge Government to Renounce Flat Tax ...................................................... 34
Dekleva and Godina Conferred Preseren Awards ................................................................ 34
Government Replaces Head of Bilateral SOPS Commission .............................................. 34
Erjavec Debates Afghanistan, Kosovo, Iraq Missions at NATO Meeting ........................... 34
2
HEADLINES
Inflation Inches up to 2.4% in January
Slovenia's annual inflation rate edged up 0.1 percentage points
Slovenia's annual inflation rate edged up 0.1 percentage points to 2.4% in January, despite a
drop in prices last month.
The National Statistics Office said that prices fell 0.5% on average in January.
Nevertheless, the annual rate was up a notch because an even bigger drop in prices had been
registered in January 2005.
The monthly deflation was caused primarily by a 12.1% drop in clothing and footwear prices
resulting from the winter sales.
This was enough to offset higher prices of food and beverage (1.5%), housing (0.8%) and
transport (0.7%).
Prices of goods were down 0.9% on average in January, while services cost 0.2% more, the
office added.
According to the Statistics Office, the 12-month average price growth, measured with the
EMU convergence price index, remained steady at 2.5% in January.
Slovenia was thus fulfilling the inflation criterion for the eurozone, which at last count, in
December, stood at 2.5%.
Gostol-Gopan Opens Factory in Bosnia-Herzegovina
The Nova Gorica-based maker of bakery equipment, Gostol-Gopan, opened a factory in
Bosnia-Herzegovina to manufacture components for baking and processing industries
The Nova Gorica-based maker of bakery equipment, Gostol-Gopan, opened on Friday, 10
February a factory in Bosnia-Herzegovina to manufacture components for baking and
processing industries, the company said.
The EUR 700,000 facility, located in Tuzla, will produce individual elements for baking
machinery and initially employ ten workers, soon to be joined by another ten.
The new plant will increase Gostol-Gopan's output capacity by a fifth. The company
furthermore plans to turn the factory into a logistics centre for the whole of Central and
Eastern Europe.
Gostol-Gopan has been experiencing a 15% increase in sales per year in the past years, with
revenues expecting to reach EUR 17m in 2006, said the head of marketing Andreja Sovdat.
To fulfil the surging demand, the company first wanted to introduce double shifts at its Nova
Gorica plant, however it failed to get enough qualified workforce to do the job, Sovdat added.
Furthermore, labour is cheaper in Bosnia-Herzegovina, the profits are not taxed in the first
five years, language is not an issue and transport connections between Tuzla and Nova Gorica
are relatively good, she explained.
Sovdat also said that Gostol-Gopan Vzhod, the company's Russian subsidiary, would begin
operating in the first half of 2006. Gostol-Gopan exports 90% of its products abroad, with
Russia and the Ukraine the most important export markets.
Industrial Output Up 3.1% in 2005
In December 2005, Slovenia's industry churned out 12.6% less than in November 2005, but
5.5% more than in December 2004
Industrial output in Slovenia grew by 3.1% in 2005 compared to a year before, the National
Statistics Office has said.
3
In December 2005, Slovenia's industry churned out 12.6% less than in November 2005, but
5.5% more than in December 2004, data from the office shows.
The biggest annual jump in December was registered in the electricity, gas and water sector,
which saw output surge 8.6%.
The manufacturing sector upped its output by 5.6% in December 2005 compared to a year
earlier.
Meanwhile, production in the mining and quarrying sector fell 24.4 percent year-on-year in
December.
4
INTERNATIONAL COOPERATION
Dubai Conference Calls for Safer Handling of Chemicals
Environment Minister Janez Podobnik and Health Minister Andrej Brucan attended the final
session of a three-day international conference on handling chemicals in Dubai, where a
declaration on international strategy for handling chemicals was adopted
Environment Minister Janez Podobnik and Health Minister Andrej Brucan attended on
Monday, 6 February the final session of a three-day international conference on handling
chemicals in Dubai, where a declaration on international strategy for handling chemicals was
adopted.
The declaration, adopted by representatives from 140 countries, emphasises caution in
handling chemicals. As Podobnik told STA, the document is politically rather than legally
binding.
He moreover said that the Dubai declaration represents an implementation of goals on safe
handling with chemicals until 2020, which were adopted at the world summit on sustainable
development in Johannesburg in 2002.
In his address at the conference, the minister stressed caution in handling chemicals. "If the
state suspects a chemicals substance dangerous to health and environment, it can decide on
how it should be handled, even if all the procedures are not concluded yet," he added.
Podobnik moreover pointed out the need for funding the programme in the developing
countries, for which Slovenia intends to earmark EUR 20,000 annually.
Environment Forum Focuses on Renewable Energy and Ecotourism
Slovenian environment minister Janez Podobnik attended the Global Ministerial Environment
Forum in Dubai
Renewable energy sources and ecotourism topped the agenda of this year's Global Ministerial
Environment Forum, which started on Tuesday, 7 February in Dubai, attended by 140
environment ministers, including Slovenia's Janez Podobnik.
Discussing renewable energy sources, the participants pointed out that most of the world
depends on imports from oil-rich countries, which are mostly areas of political instability,
Podobnik told STA. Another problem is the high oil prices, he added.
According to him, the ministers shared a view that changes are needed. "If we want to
implement the Kyoto protocol, we must do something in the energy sector, especially
regarding emissions of greenhouse gases," he said.
Addressing the forum, Podobnik outlined Slovenia's experience in the use of renewable
energy sources. He stressed the use of wood biomass, which according to Podobnik has up to
now been seen only as a sort of useless waste.
Minister Rupel Receives Credentials from Indonesian Ambassador
Rupel and Wibowo were quoted as saying that economic cooperation could be intensified,
although Slovenian exports to Indonesia increased 42.5% in the first nine months of 2005 to
US$ 4.6m, with imports up 5% to US$ 36.4m
Foreign Minister Dimitrij Rupel has received copies of credentials of new Indonesian
Ambassador Triyono Wibowo, who is covering Slovenia from Vienna, according to the
Foreign Ministry.
Rupel and Wibowo were quoted as saying on Thursday, 9 February that economic
cooperation could be intensified, although Slovenian exports to Indonesia increased 42.5% in
the first nine months of 2005 to US$ 4.6m, with imports up 5% to US$ 36.4m.
5
According to Rupel, Slovenia is also interested in signing a bilateral agreement on
cooperation in science and technology, a draft of which he handed over to Wibowo.
An agreement on the promotion and protection of investments is also in the making. Slovenia
wants to revive the talks, which stalled in 2001 due to the adoption of new legislation in the
field in Indonesia.
6
EUROPEAN UNION
EU Survey: Slovenians Not Interested in EU Matters
A total of 72% of Slovenians do not want to take part in EU matters, however they are very
well informed about the EU, according to the latest Eurobarometer poll
A total of 72% of Slovenians do not want to take part in EU matters, however they are very
well informed about the EU, according to the latest Eurobarometer poll.
The results of the autumn poll, presented on Monday, 6 February in Ljubljana, also suggest
that 30% of Slovenians want nothing whatsoever to do with the bloc's issues.
Meanwhile 26% of the country's population, the smallest number among all EU members,
expressed a desire to be active in EU matters. The EU's average stands at 49%.
Furthermore 76% of Slovenians believe the government should do more to include Slovenians
in EU affairs, while 71% put the responsibility on local authorities.
Yet Slovenians displayed above-average knowledge on EU matters, 61% were correct in
answering true-or-false statements about the bloc, putting the country second only to
Luxembourg, with 63%.
The average percentage of correct answers for the Union's 25 members was 38%.
Indeed, 49% of respondents were satisfied with their knowledge of the EU, while 40%
expressed a desire to learn more about the bloc.
Meanwhile, support for EU enlargement remains high at 74%, tying Slovenia with Greece in
first place. Slovenians would most love to see Switzerland and Norway in the EU (92%
support rate for both), followed by Iceland (87%) and Ukraine (66%).
Among the current accession candidates the respondents favour Bulgaria (65%), over
Romania (62%), while support levels for Turkey stand at 49%, the highest among EU
members.
A total of 59% would also welcome Croatia into the EU, while Albania is the least favoured
prospective member with 48%.
Slovenians also hold the EU constitution in high esteem, with 75% in favour of the document
and 37% believing that the ratification procedure ought to continue.
Yet, despite their high support for EU projects, only a quarter want the EU budget to increase
due to enlargement.
Slovenians also believe that EU should first and foremost deal with unemployment, taxes,
improve economic conditions and curb inflation.
According to Slovenians, the EU should fight terrorism (79%), conduct scientific and
technological research (70%) and have more say in defence and foreign affairs (68%).
They would not like to see the Union meddle with retirement benefits, with only 24% in
favour of increased EU competence in the area, followed by taxes (29%) and health and social
insurance (32%).
The survey also touched upon the Slovenians' attitude towards the planned January 2007 euro
changeover, with 39% saying that they are afraid of the move and 58% that they do not fear
the country joining the eurozone.
The Eurobarometer survey polled 1,034 respondents over 15 years of age and took place
between 11 October and 7 November 2005.
Rehn: EU Cannot Act as Judge in Slovenia-Croatia Border Dispute
The Commission can facilitate talks between the two countries, however, the dispute is a
bilateral issue that has to be solved by Slovenia and Croatia alone, Rehn added
7
The European Commission cannot act as a judge in the border dispute between Slovenia and
Croatia, Enlargement Commissioner Olli Rehn told Slovenian media in Brussels on
Wednesday, 8 February.
The Commission can facilitate talks between the two countries, however, the dispute is a
bilateral issue that has to be solved by Slovenia and Croatia alone, Rehn added.
He believes that the countries will be able to solve the issue before Croatia enters the EU.
However, the EU has formed no views on what the solution should look like.
Rehn furthermore said that there can be no connection between enlargement talks and
[bilateral] border issues. At the same time he pointed out that every candidate country from
the Balkans has to act as a good neighbour and be active in regional cooperation.
The Commission's only jurisdiction in the relations between Slovenia and Croatia lies in the
fisheries part of the Slovenia-Croatia agreement on border transport and cooperation (SOPS),
he explained.
"We are convinced that a properly functioning fisheries regime could significantly reduce the
number of incidents [between Slovenian and Croatian fishermen]. However, the countries
have to try to find a solution together," he added.
Slovenian and Croatian fishermen have been involved in numerous incidents, stemming from
the unresolved maritime border between the two countries in the Bay of Piran.
Rehn's statement came just ahead of the commissioner's two day visit to Slovenia, which
began on Thursday, 9 February.
Drobnic Welcomes Commission's Call for Open Labour Market
Labour Minister Janez Drobnic has welcomed the European Commission's decision to call
for the opening of the labour markets in old EU member states to workers from the new
members
Labour Minister Janez Drobnic has welcomed the European Commission's decision to call for
the opening of the labour markets in old EU member states to workers from the new
members.
In a response to the European Commission's recommendation that the 15 old EU members lift
bans on workers from new EU member states as of May 2006, Drobnic told STA that
Slovenia has maintained throughout that the free movement of labour must be respected in the
EU.
Slovenian workers do not pose a threat to the labour markets of the other EU countries, just as
workers from other EU countries do not threaten the Slovenian market, he believes.
According to Drobnic, there is no fear of a mass exodus of Slovenian workers to other EU
countries.
Drobnic therefore expects that old EU member states will heed the Commission's call and
open up their markets to workers from new EU members.
He said Slovenia was especially hopeful that its neighbours Italy and Austria, as well as
Germany, would lift bans on Slovenian workers.
Rehn Hails Slovenia's Support for EU Enlargement
European Enlargement Commissioner Oli Rehn thanked Slovenia for its consistent and active
role in supporting EU enlargement
European Enlargement Commissioner Oli Rehn thanked Slovenia for its consistent and active
role in supporting EU enlargement, as he met PM Janez Jansa in Brdo pri Kranju late on
Thursday, 9 February.
According to Jansa's office, the pair agreed on the importance of EU accession for Western
Balkans countries, and expressed their hope that open issues, such as the final status of
Kosovo, would not jeopardise peace and stability in the region.
8
They furthermore stressed the need for the countries in the area to fully cooperate with the
Hague tribunal for crimes in the former Yugoslavia, and agreed that the international
community needs to continue to offer its support to facilitate development and progress of the
region.
Jansa moreover reiterated Slovenia's support for Croatia's EU bid, adding that he hopes
negotiations between the EU and Croatia on the implementing part of the fisheries chapter in
the Slovenia-Croatia border traffic and cooperation agreement (SOPS) would end soon.
On Friday, 10 February Rehn held a lecture at the Ljubljana faculty of Law, saying that EU
enlargement facilitates stabilisation of the political situation in accession countries, as well as
helps in carrying our political and economic reforms.
Rehn also called on EU aspirants from the region to follow Slovenia's example. He added that
the country, besides being politically stable, already managed to overtake two of the bloc's
older members in terms of GDP.
Commissioner Rehn Wants EU to Export Stability
The European Union should export stability and not import instability, European
Enlargement Commissioner Olli Rehn told the press after discussing EU enlargement to the
Western Balkans with top Slovenian officials.
The European Union should export stability and not import instability, European Enlargement
Commissioner Olli Rehn told the press on Friday, 10 February, after discussing EU
enlargement to the Western Balkans with top Slovenian officials.
Rehn's talks also touched upon unresolved issues between Slovenia and Croatia, with Rehn
reiterating the Commission's position that the EU does not have jurisdiction for solving the
border dispute between the two countries.
"This is a bilateral issue," he said. Slovenia and Croatia have to decide by themselves about
the way to solve it, he pointed out.
While expressing the Commission's support for finding an agreement on the implementing
part of the fisheries chapter in the Slovenia-Croatia border traffic and cooperation agreement
(SOPS), Rehn added that fisheries and border are two separate issues.
Rehn furthermore supports the activities of the UN's special envoy for Kosovo Martti
Ahtisaari. He said that minority rights have to be respected in the predominantly Albanian
province. He also called on Serbia-Montenegro to be a "constructive partner" in talks on the
future status of the province.
Foreign Minister Dimitrij Rupel meanwhile expressed Slovenia's support for future EU
expansion. "Slovenia is very much in favour of EU enlargement," he added.
Regarding the border issue, Rupel believes that a bilateral solution is still possible. He added
that the climate in Slovenia is not favour in arbitration.
Trade Unions Believe Services Directive Institutes Social Dumping
The head of the Association of Free Trade Unions (ZSSS), the country's largest trade union
association, said that the country's trade unions mainly oppose the principle of domicility,
under which the labour force coming to work in a different country would be protected by the
legislation of their country of origin
If the EU's services directive is adopted in its current form, the social consequences would be
catastrophic as the legislation effectively implements "social dumping", ZSSS president
Dusan Semolic told the press on Friday, 10 February.
The head of the Association of Free Trade Unions (ZSSS), the country's largest trade union
association, said that the country's trade unions mainly oppose the principle of domicility,
under which the labour force coming to work in a different country would be protected by the
legislation of their country of origin.
9
This means that their salaries would correspond to those in their native states and not the state
in which they would find employment, Semolic added.
As social standards, minimum wages and safety at work greatly differ between EU countries,
the principle would hurt both workers and employers, he pointed out.
Slovenian trade unions do not oppose foreign workers coming to Slovenia, but "it is important
that those that come to work in Slovenia are bound by the same rules as Slovenian workers,"
Semolic said.
According to him, 150 ZSSS representatives are to join demonstrations by EU's trade unions
against the directive in Strasbourg. "Competitiveness must not be the goal of the directive.
The legislation should rather preserve and strengthen the social security of workers," Semolic
believes.
Rehn Holds Talks with Drnovsek and EU Affairs Committee
According to a press release from Drnovsek's office, the president and Rehn discussed EU
enlargement and the situation in SE Europe
President Janez Drnovsek met European Enlargement Commissioner Oli Rehn in Ljubljana
on Friday, 10 February. Earlier in the day, Rehn also talked with the members of the
parliamentary EU affairs committee.
According to a press release from Drnovsek's office, the president and Rehn discussed EU
enlargement and the situation in SE Europe.
The pair agreed that Macedonia's recently obtained EU candidate status presented an
important signal for the entire region.
Drnovsek reiterated his position that the issue of the future status of Kosovo had to be
resolved as soon as possible.
He also touched on Montenegro, arguing that, as an independence referendum was inevitable,
it would be better if the government and opposition quickly saw eye to eye as regards its
staging.
Rehn also touched on Romania's and Bulgaria's preparations to enter the EU, saying both
were pushing hard and that the final report on their readiness would be out in May.
Drnovsek added that his recent visit to Romania confirmed intensive steps were underway in
the country. He also noted that it was important that these efforts led to eventual membership
and that Europe must not succumb to enlargement fatigue.
Meeting with the members of the Slovenian EU affairs committee in the morning, Rehn
expressed satisfaction over the parliament's involvement in EU matters, the National
Assembly said in a press release.
Discussing future EU enlargement, the commissioner pointed out that 2005 brought some
important decisions in this field.
He reminded that Macedonia obtained candidate status, negotiations started with Turkey and
Croatia, and that Serbia-Montenegro and Bosnia-Herzegovina began their EU journey by
signing stabilisation and association agreements.
10
LEGISLATION
Parliament Passes Industrial Property and Agriculture Amendments
According to Economics Minister, Andrej Vizjak, changes to the law on industrial property
are in line with the provisions of the EU directive on enforcement of intellectual property
The National Assembly adopted on Monday, 6 February amendments to the act on industrial
property and the act on agriculture.
According to Economics Minister, Andrej Vizjak, changes to the law on industrial property
are in line with the provisions of the EU directive on enforcement of intellectual property.
They are to protect the status of patent, model and trademark holders and help them assert
their rights in civil court procedures, especially in the case of serious violations of rights, such
as trading with counterfeit and pirated merchandise.
The changes deal mostly to already existing institutions, and to civil procedures for the
enforcement of rights which have been violated.
The law only determines the different conditions for the use of already existent institutions,
which are necessary as regards the directive.
This includes claims which can be asserted by copyright holders, suits, temporary injunctions,
the perpetuation of evidence regarding violations and the capacity to sue, the minister added.
According to Agriculture Minister Marija Lukacic, the changes to the agriculture act are in
line with EU regulations concerning agricultural subsidies claims procedures.
They determine the subsidies entitlement conditions and decision-making process of
organisations tasked with the monitoring and certifying of agricultural products.
The new regulations will enter into force before this-year's subsidies tender, which is to be
published on 1 March.
Parliament Passes Act on EUR 1bn Guarantee for Motorways
Transport Minister Janez Bozic said that funds will enable DARS to apply for additional
loans in the 2006 to 2010 period and issue bonds
Parliament passed on Tuesday, 7 February an act on state approval for a EUR 1.03bn loan for
the Slovenian Motorway Company, DARS.
According to SD lawmaker Breda Pecan, the funds are needed to ensure stable financing of
DARS, as next year's budget envisages cuts for the company.
Transport Minister Janez Bozic said that funds will enable DARS to apply for additional loans
in the 2006 to 2010 period and issue bonds.
Bozic added that the new act will allow DARS to secure 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.
In line with Bozic's division of the funds needed for the construction of the 25 planned
sections, EUR 371.8m will come from own sources, 780.9m from already existing loans, and
1.03b from the loan envisaged by the new act.
The minister estimated that DARS will completely pay back the loans between 2040 and
2050.
Social Democrats Present Bill on Commerce Chambers
Under the bill, outlined by the party's leader Borut Pahor, all chambers would be organised
on a voluntary basis, but could be assigned public duties upon reaching a certain threshold of
members, which the SD put at 40%
11
The opposition Social Democrats (SD) have presented a systemic bill on chambers of
commerce, which includes all of the country's chambers and not just the Chamber of
Commerce and Industry of Slovenia (CCIS).
Under the bill, outlined by the party's leader Borut Pahor, all chambers would be organised on
a voluntary basis, but could be assigned public duties upon reaching a certain threshold of
members, which the SD put at 40%.
The bill regulates an area that, due to its complexity, requires a lot of attention. It moreover
addresses the issues that were left unanswered by the government bill [on commerce
chambers], Pahor added.
The bill defines the system of professional and commerce chambers, their establishment,
activities, linking and abolishment. It furthermore deals with the CCIS the Trade Chamber
(OZS), the Agriculture Chamber (KGZS), and the 16 professional chambers.
The bill also solves the question of how the companies, in a system where membership in
chambers is voluntary, could chose their representatives in social agreement talks, Pahor
pointed out.
"A lot of effort has been put in drafting the bill and we believe that it is better than the
government's law," said former Labour Minister Vlado Dimovski.
The president of the party's expert council for domestic policy, public administration and
judiciary Rado Bohinc also believes that the SD's bill is far superior to the government's
proposal.
"Our proposal solves the issue of public status of the chambers," which, however, remain
based on voluntary membership.
The law, drafted by the Economics Ministry, envisages an entirely different type of chambers,
said Bohinc.
The bill was sent to the government on Friday, 10 February. The SD expects the cabinet to
provide an answer to it in the next two weeks.
12
STATISTICS/FORECASTS
Trade Gap Expands in December
Slovenia's exports amounted to EUR 1.14bn in December, a 10.1% rise in comparison with
December 2004, while imports totaled EUR 1.42bn, up 16.1% over December 2004
Slovenia's exports amounted to EUR 1.14bn in December, a 10.1% rise in comparison with
December 2004, while imports totaled EUR 1.42bn, up 16.1% over December 2004.
The trade gap in December stood at EUR 277.8m, putting the export-import coverage at
80.5%, preliminary data from Slovenia's Statistical Office shows.
In 2005 Slovenia's exports increased by 11.7% over 2004 to EUR 14.3bn, while imports rose
by 10.6% to EUR 15.6bn.
The trade deficit for 2005 reached EUR 1.37bn, and the export-import coverage stood at
91.2%.
2.38 Million Tourists Flock to Slovenia in 2005
Whereas 1.55 million tourists came from abroad last year, there were 837,000 domestic
guests
A total of 2.38 million tourists visited Slovenia in 2005, up 2% from 2004, the head of the
Trade Association at the Chamber of Commerce of Industry of Slovenia (CCIS) Danilo
Daneu said on Thursday, 9 February.
Whereas 1.55 million tourists came from abroad last year, there were 837,000 domestic
guests, Daneu added.
The guests moreover generated a total of 7.56 million overnight stays: 4.4 million by foreign
and 3.17 million by domestic visitors, the head of the trade association's board revealed.
Moreover, the trend of falling domestic guest and rising foreign tourist numbers continued in
2005, with foreign tourists now accounting for 65% of the total tourists in Slovenia.
Furthermore, 58% of overnight stays were generated by foreign tourists.
In the first 11 months of 2005, the visitors from abroad brought 11% more foreign currency to
the country, generating EUR 1.35bn of the total of EUR 1.45bn in foreign currency income.
Meanwhile, Slovenians travelling abroad spent a total of EUR 707.5m, a 6% increase over
2004.
Italians topped the list of foreign visitors, as their numbers increased by 8%, while the number
of Austrian and German guests dropped by 8% and 2%, respectively.
The highest rise was recorded by guests from Great Britain (19%), a result of cheap flights
offered by no-frills carrier Easyjet.
EU Survey: Slovenians Believe Globalisation Motivated by Profits
Around a third of Slovenians believe globalisation means companies are moving their
production to countries with cheaper labour, according to the results of the autumn
Eurobarometer survey
Around a third of Slovenians believe globalisation means companies are moving their
production to countries with cheaper labour, according to the results of the autumn
Eurobarometer survey.
Meanwhile, the data shows that 18% of Slovenians believe globalisation presents an
opportunity for Slovenian companies, while 17% think that it could promote FDI inflow.
However, as many as 78% of Slovenians see the motive for moving production from Slovenia
to other countries in the desire of companies to increase profits, while only 14% believe that
13
such moves are necessary if some of the companies want to retain their production in Slovenia
as well.
Asked whether the EU protects Slovenia from the effects of globalisation, 34% of the
respondents said yes, while 52% believe that this is not the case.
Moreover, 44% of Slovenians think that the country needs immigrants in certain sectors of the
economy, while 55% disagree. A total of three quarters of those polled do not believe that
immigrants could solve the problem of Europe's ageing population.
Slovenians also believe that the EU's economy could be improved through education and
training programmes (66%), investments into research and development (62%) and cutting
red tape (45%).
14
FINANCE
Banks to Charge for ATM Roaming
The ATM roaming fees are to be introduced by Slovenia's largest bank, NLB; second-largest
bank, NKBM; third-largest bank, Abanka; and fifth-largest bank, Banka Koper
A number of Slovenian banks have announced plans to introduce commissions for their
clients that use automatic teller machines of competing banks.
The ATM roaming fees are to be introduced by Slovenia's largest bank, NLB; second-largest
bank, NKBM; third-largest bank, Abanka; and fifth-largest bank, Banka Koper.
The banks said they would charge their clients SIT 80 (EUR 0.33) for using a teller machine
of a competing bank for withdrawals.
Meanwhile, the banks added that they would not be charging clients for withdrawals at their
own teller machines.
In its explanation of the move, the NLB said that the fee would cover the costs associated
with running teller machines around the country.
According to the bank, which has more than 50% of the around 1,500 teller machines in the
country, its clients carry out 70% of their withdrawals at NLB-owned ATMs.
Meanwhile, fees will not be introduced for the meantime by Slovenia's fourth-largest bank,
SKB; Bank Austria Creditanstalt; Raiffeisen Krekova banka; and Dezelna banka Slovenije.
However, the banks said they were mulling following the lead of the other banks in
introducing fees for ATM roaming.
ATMs in Slovenia are run by a central processing company, while banks have to pay each
other fees for withdrawals by their clients at cash points owned by other banks.
Bankart, the central processing company, said its system was compatible with the introduction
of ATM roaming fees.
Monitoring to Prevent Price Hikes at Euro Changeover
The adoption of the euro planned for next year has raised concerns that businesses could take
advantage of the confusion and raise prices, something which has happened in several
countries that have adopted the euro
The adoption of the euro planned for next year has raised concerns that businesses could take
advantage of the confusion and raise prices, something which has happened in several
countries that have adopted the euro. Slovenia will try to prevent this by introducing a long
period of double pricing, independent price monitoring and an extensive information
campaign.
One of the most important preventive tools will be double pricing, which becomes mandatory
in March this year and will stay in place for six months after the changeover, which is
scheduled for 1 January 2007.
At the same time, the Consumer Protection Office and the International Consumer Research
and Testing Institute will be monitoring prices in the pricewatch project: they will keep an eye
on 104 consumer products, including services, monitoring 294 locations throughout the
country.
The Consumer Association is unsure whether the objective of preventing exorbitant price
hikes will be achieved, yet they insist that the measures will go a long way towards reducing
them to a minimum before, during and after the changeover.
Meanwhile, the Government PR and Media Office will send out the publication "The Euro is
Coming" to all households in the country in early March. Households will receive another
brochure just before the actual changeover.
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The publications will include basic information about the euro, the rules of conversion and
rounding off, how to recognise fakes, as well as practical advice on where to go in case of
problems etc.
Throughout this year, the office will also organise a series of information and education
activities aimed at experts as well as the lay public. Information will also be available on the
web pages of the government and the Bank of Slovenia, and the dedicated portal
www.evro.si.
All activities will be held under the slogan "Euro - for All of Us".
Paychecks to Be Listed in Tolars and Euros from August Onwards
Trade unions have said that they and the employers agreed that net wages will be listed in
Slovenian tolars as well as in euros from August onwards
Trade unions have said that they and the employers agreed that net wages will be listed in
Slovenian tolars as well as in euros from August onwards, as they met for talks on the 20062009 social agreement on Monday, 6 February.
A deal on double listing on pay slips was put forward by the unions to prevent a possible
shock resulting from smaller numbers on the workers paychecks, said Dusan Semolic, the
president of the Association of Free Trade Unions (ZSSS).
The exchange rate between the tolar and the euro currently stands at 239.56 tolars per euro.
The country plans to join the eurozone in January 2007.
Semolic told the press that the pensioners' trade union, a part of the ZSSS, proposed to the
Institute of Pension and Disability Insurance (ZPIZ) that pensions be listed in both currencies
as well.
He added that double pricing was discussed at the round of social agreement talks on 6
February. "Because nobody voiced their opposition to the proposal, we understood is a done
deal," he commented on the statement by the head of the Slovenian Employers' Association
Samo Hribar Milic, who told STA that an agreement on the issue had not yet been reached.
Informative double pricing in Slovenian shops is set to be launched on 1 March 2006. The
move is aimed at ensuring that Slovenians know prices in both currencies and to prevent price
hikes.
Minister Damijan Denies Union Claims Regarding Flat Tax
"It is not true that the flat tax rate would worsen the standard of life in Slovenia," Reforms
Minister Joze P. Damijan said, denying the statement made by Dusan Semolic, the president
the Association of Free Trade Unions (ZSSS)
"It is not true that the flat tax rate would worsen the standard of life in Slovenia," Reforms
Minister Joze P. Damijan said on Tuesday, 7 February denying the statement made by Dusan
Semolic, the president the Association of Free Trade Unions (ZSSS).
Speaking to the press on behalf of the four union associations that staged anti-reform protests
in late November, Semolic said that the unions want the government to drop its plans to
introduce a flat tax, as it poses a threat to the debate on key development issues.
In his reply, Damijan said that the government will make an effort for an agreement on the
flat tax to be reached, however, he stressed that a dialogue between social partners is needed.
"Trade unions oppose the flat tax rate, although talks on tax system within the 2006-2009
social agreement have not started yet," he continued.
"We must consider the actual estimates, which are the only real basis for the talks. The most
recent estimates show no change in the standard of life," Damijan said, who otherwise
labelled the work of trade unions as legitimate.
The results of a study on the effect of the flat tax rate across different economic sectors,
prepared by the Finance Ministry, are expected to be published at the end of March.
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EIB Lends EUR 282m to Slovenia in 2005
The bulk of the loans, EUR 250m, was earmarked for the construction of a 36 km motorway
section between Maribor (NE) and the Hungarian border
In 2005 the European Investment Bank (EIB) gave Slovenia EUR 282m worth of loans under
favourable terms, which is 0.7% of all last year's loans to the EU member states, according to
a report the EIB released in Brussels on Thursday, 9 February.
The bulk of the loans, EUR 250m, was earmarked for the construction of a 36 km motorway
section between Maribor (NE) and the Hungarian border, the report says.
The EIB moreover made available EUR 25m to Slovenia's largest bank, Nova Ljubljanska
banka, as financial aid to small and medium-sized businesses. Meanwhile, EUR 7m were
approved for the Convergence Fund of the New Europe.
The EU countries were granted a total of EUR 42.276bn last year, most of which went to
older members. The newcomers received a total of EUR 6.6bn of loans, which is a 80% surge
over 2004, when they received only EUR 3.6bn.
Among the non-EU countries, which got a total of EUR 5.1bn, the Mediterranean countries
received EUR 2bn and Southeastern Europe EUR 1.5bn. Two thirds of it went to Romania,
while EUR 60m were made available to Croatia for a motorway around the coastal town of
Split.
In the 2001-2005 period, Slovenia was granted a total of EUR 1.021bn or 0.5% of all loans in
the EU. In the same period, the EIB allocated EUR 190bn for the EU members, and EUR
19bn of partner loans for non-EU countries.
Grawe Collects 12% More Premiums in 2005
This year, Grawe expects premiums to increase by 10%
Insurer Grawe collected SIT 6.67bn (EUR 27.84m) worth of premiums last year, a 12.3% rise
over 2004. It moreover covered SIT 1.99bn (EUR 8.3m) of damages in 2005, which is 25%
more than the year before, the company has said.
This year, Grawe expects premiums to increase by 10%. They will focus more on car
insurance, which they introduced last year, and prepare for the euro changeover, the company
said in a press release on Thursday, 9 February.
The insurer, which would like to increase the number of employees from 205 to 265, is also
preparing investment insurance, which will allow customers to choose between five foreign
funds.
It will moreover upgrade property insurance for apartments and houses, as well as business
insurance, and introduce legal protection insurance.
The Maribor-based insurer is a part of the Austrian insurance giant Grazer Wechselseitige
Versicherung, which is present in 11 countries of Central and Southeastern Europe.
Grawe, which was in Slovenia once before in the 19th century and which now insures 65,000
people in Slovenia, returned to the country as Prima zavarovalna druzba in 1990 as the first
foreign insurance company in the former Yugoslavia.
Central Bank Cuts Main Rates by 25 Basis Points
The governing board of the Bank of Slovenia has cut main interest rates by 25 basic points,
effective on 10 February 2006
The governing board of the Bank of Slovenia has cut main interest rates by 25 basic points,
effective on 10 February 2006.
The rate of 60-days tolar bills has been cut to 3.75%, the buy/sell FX swap to 1.25%, the
sell/buy FX swap to 0.75%, and lombard loan to 4.75%.
The change reflects structural adjustment of interest rates, along the lines of nominal
convergence prior to the adoption of the euro, according to the bank's press release.
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The board moreover looked at macroeconomic conditions, assessing that the macroeconomic
risks to price stability are limited, and that the inflation rate achieved in 2005 is sustainable.
This is also confirmed by the low level of core inflation, which last year fluctuated at levels
below 1%.
Gorenjska Banka Posts Bumper Profits
Gorenjska banka, Slovenia's eighth largest bank by assets, posted a pre-tax profit of SIT
11.4bn (EUR 47.58m) for 2005, up a fifth over the year before
Gorenjska banka, Slovenia's eighth largest bank by assets, posted a pre-tax profit of SIT
11.4bn (EUR 47.58m) for 2005, up a fifth over the year before. The bank says this places it
among the most profitable banks in the country.
Return on equity was at 26.29% as compared to the average of 14% for the sector, with return
on assets at 4.83%, the bank said in a press release on Thursday, 9 February. Total assets
increased 14.5% through 2005, to SIT 320bn (EUR 1.33bn).
The supervisory board assessed the bank's performance, investment valuation and risk
management as appropriate. They labelled the results as a reflection of a good strategy in the
past years.
The bank expects a strong showing this year although the results for 2006 will not be
comparable with last year's, as the bank has fully implemented the International Standards of
Financial Reporting.
The supervisory board has also said that shareholders can look forward to bountiful dividends.
It will moreover recommend that the AGM abolish the current curb on voting rights, which
lies at 30%.
MPs Confirm Motorway Construction Plan
Work will be underway on 173 km of Slovenian motorways this year in accordance with the
motorway construction plan
Work will be underway on 173 km of Slovenian motorways this year in accordance with the
motorway construction plan that the parliament adopted on Thursday, 9 February.
With a price tag of SIT 170.6bn (EUR 712m), this is the most expensive motorway
construction plan to date.
The bulk of the money, SIT 120.3bn (EUR 501.1m), will come from loans and bonds, with a
third of the money coming from loans that have already been taken out. New loans and bonds
are expected to bring in SIT 79.9bn (EUR 333.5m).
The rest of the funds will come from the budget (SIT 5.9bn/EUR 24.6m), the EU cohesion
fund (SIT 2bn/EUR 8.35m), VAT refunds (SIT 15.3bn/EUR 63.9m) and licence fees (SIT
6.7bn/EUR 28m).
Volumes on the LJSE Meagre in Bearish January
Trading on the Ljubljana Stock Exchange (LJSE) was average in January, with deals
amounting to SIT 13.9bn (EUR 58m)
Trading on the Ljubljana Stock Exchange (LJSE) was average in January, with deals
amounting to SIT 13.9bn (EUR 58m), down 16.9% on a year ago. Brokers also made 103
block deals worth SIT 10bn (EUR 41.7m), according to the LJSE monthly statistical report.
The lacklustre trading reflected on the major indices: the blue-chip SBI 20 index remained
almost level on a monthly comparison at 4,569 points, which is down 9.6% over the same
period last year.
The PIX investment fund index meanwhile added 1.3% but was down 15.6% over a year ago,
with the bond BIO index down 1% over the end of December and 0.3% lower year-on-year.
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Only eight of the 25 shares listed on the official market closed in the black on the monthly
comparison, most notably drug maker Krka (+10.8%), and bread and pasta maker Zito
(+5.6%).
Krka was also the busiest share, with deals worth SIT 5.1bn (EUR 21.3m), followed by oil
trader Petrol (SIT 1.4bn/EUR 5.8m) and retailer Mercator (SIT 841m/EUR 3.5m).
The market capitalisation of all securities listed on the LJSE topped SIT 1,651.2bn (EUR
6.89bn) in January, with shares accounting for 50.2% of the total, bonds 45.4% and
investment funds 4.4%.
The market capitalisation of shares increased by SIT 46.8bn (EUR 195.3m) over the month
before, mostly due to the floatation of the tourism and trading conglomerate Autocommerce.
The market capitalisation of bonds increased by a similar amount due to the listing of new
debt securities.
Barring investment funds, the market capitalisation of securities traded on the LJSE was the
equivalent of 26.7% of the 2004 GDP in January.
Euro the Top Priority This Year for the Finance Ministry
"2006 will certainly be one of the most challenging years for the Ministry of Finance," Bajuk
said as he presented the ministry's agenda for the year, happy that the country is already
meeting all the criteria
The fulfilment of convergence criteria for euro adoption and preparations for the actual
changeover will be the top priorities for the Finance Ministry this year, Finance Minister
Andrej Bajuk told the press on Friday, 10 February.
"2006 will certainly be one of the most challenging years for the Ministry of Finance," Bajuk
said as he presented the ministry's agenda for the year, happy that the country is already
meeting all the criteria.
"I hope we stay on track; not only is it crucial that we have achieved [convergence criteria],
we also have to keep that momentum," Bajuk stressed.
The ministry will be preoccupied with the euro, which Slovenia hopes to adopt on 1 January
2007, but it will also have its hands full with the comprehensive reform package promoted by
the government.
A lot is expected from the Finance Ministry in this field, especially with respect to the tax
system, he noted.
Moreover, the ministry would draft amendments to several acts, notably the act on public
finances, to "improve transparency and introduce a system comparable with those in Europe."
Bajuk also confirmed that the government has already received the proposals of expert groups
for privatisation of companies in majority ownership of the state, but he refused to talk about
the details until the cabinet has made a final decision.
He reiterated his position that the government should offload its stakes and keep no influence
whatsoever on the day-to-day operations banks.
Yet he also said that the state cannot just let the banking business become an "aggregate of
foreign subsidiaries. The state needs to have a certain influence."
Swiss Bank Acquires 10% of KD Group
Swiss bank Dresdner Bank Switzerland has acquired a 10.4% stake in Slovenian asset
management firm KD Group
Swiss bank Dresdner Bank Switzerland has acquired a 10.4% stake in Slovenian asset
management firm KD Group.
According to a press release from KD Group, Slovenia's largest mutual fund operator, the
Swiss bank bought the stake on Tuesday, 7 February.
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Other details about the acquisition - including the price and the seller - were not disclosed by
KD Group on Friday, 10 February.
Dresdner Bank Switzerland represents the Allianz Group and its subsidiary Dresdner Bank
Group in Switzerland.
Shares of KD Group last traded at SIT 118,000, meaning that 19,400 shares or 10.4% of the
asset management firm would be worth around EUR 9.5m.
Successors Agree on Division of Share of Former Yugoslav Export Bank
In line with the agreement, Slovenia is to receive 3.6% of the stake
The five successors to the former Yugoslavia agreed on the division of a 25% stake in the
former Yugoslav export bank. In line with the agreement, Slovenia is to receive 3.6% of the
stake.
The agreement was reached at a two-day meeting of the financial committee of the successor
states - Slovenia, Macedonia, Croatia, Bosnia-Herzegovina and Serbia-Montenegro - in
Belgrade on Friday, 10 February public broadcaster Radio Slovenija reported.
The division of the 25% stake in the Yugoslav Bank for International Economic Cooperation,
JUBMES, represented the only real progress in the latest talks between the successors.
According to the head of the Slovenian delegation France Arhar, Slovenia will get 551 shares
or a 3.6% stake in JUBMES.
Moreover, the representatives also discussed former Yugoslavia's US$ 100m debt to Libya.
Serbia-Montenegro proposed that the payment of the debt be divided according to the key set
down in the umbrella succession agreement signed by the successors in 2001, but Slovenia
rejected the move.
Arhar explained that Slovenia believes it owes nothing because the debt stems from oil
purchases in 1981, which were in the hands of the central government and for which
companies and people paid money.
Slovenia wants to know why the former Yugoslav central bank failed to pay this debt, Arhar
told Radio Slovenija. A special working group has been appointed to study the case.
Meanwhile, the clearing debt owed to the Czech Republic also appeared on the agenda of the
meeting. The Serbia-Monentegro official announced that the debt was far greater than the
US$ 60m initially estimated, with the Czech Republic asking for US$ 161m.
"The fact is that Slovenia had paid back its dues to the Czech Republic in 1998, while the
National Bank of Serbia maintains that the clearing debt is a common debt irrespective of the
purpose," Arhar added.
Slovenia maintains that the common debt is only the part of the debt for which it is unclear
who spent it, Arhar said.
Unable to reach an agreement, the members of the financial committee decided to refer the
issues to the committee of high representatives for succession issues.
Bajuk Wants the State to Keep Golden Share in Key Banks
Finance Minister Andrej Bajuk has told the daily Vecer that regardless of who owns the
country's banks, the banking system should continue to offer sufficient support for domestic
companies. The state should keep at least a golden share in the key banks
Finance Minister Andrej Bajuk has told the daily Vecer that regardless of who owns the
country's banks, the banking system should continue to offer sufficient support for domestic
companies. The state should keep at least a golden share in the key banks, he told the daily on
Saturday, 11 February.
Bajuk refrained from commenting on the privatisation plans for the top two banks, Nova
Ljubljanska banka (NLB) and Nova Kreditna banka Maribor (NLB), which have been drawn
up by expert groups and reviewed by the government.
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However, the direction is clear: the government has decided that the state will withdraw from
day-to-day banking operations where it has ownership stakes, yet at the same time it must
make sure that the banks serve the country's economic and social development.
The minister moreover stressed that if taxes are indeed to be cut in the long term, which the
government wants to do, spending must be curbed. There is no other way, especially in the
period leading up to the adoption of the euro when Slovenia must have balanced public
finances. "In this period, it is impossible to cut taxes at the expense of a bugger deficit," he
stressed.
The only thing that could derail the euro project is inflation, as it largely depends on factors
out of Slovenia's reach. "But even in this field the data is very positive and I'm convinced that
we can continue working on it," he said.
The European Commission and the European Central Bank will have the final say on whether
Slovenia can adopt the euro on 1 January 2007 as planned, and Slovenia can ask for an
assessment after the expiry of the mandatory two-year period in the ERM II exchange
mechanism on 29 June.
"Together with central bank Governor Mitja Gaspari and all our representatives in the EU, we
are making efforts to have the appropriate authorities take the decision by the middle of the
year," Bajuk told Vecer.
Ljubljana Stock Exchange
The Ljubljana Stock Exchange dived deep into red last week, as virtually all blue chips lost
ground in five consecutive days of bearish trading to push the benchmark SBI 20 index 69.97
points (1.5%) lower to 4,520.44
The Ljubljana Stock Exchange dived deep into red last week, as virtually all blue chips lost
ground in five consecutive days of bearish trading to push the benchmark SBI 20 index 69.97
points (1.5%) lower to 4,520.44.
Barring block deals, pharmaceutical company Krka was the turnover topper with deals worth
SIT 489.9m (EUR 2m), but it shed 1.4% to close at SIT 116,707 (EUR 487.09).
All other popular blue chips closed lower as well, with fuel trader Petrol down 0.6% to SIT
68,557 (EUR 286.15) and retailer Mercator shedding 0.65% to SIT 36,800 (EUR 153.60).
Mercator was the only company making headlines last week, as investment firm Infond
holding acquired 18,300 shares in a deal worth SIT 693m (EUR 2.89m).
Infond is in majority ownership of Radenska, the soft drinks subsidiary of brewer Pivovarna
Lasko, which has led analysts to the conclusion that Lasko has tightened its hold on the
country's leading grocer.
Moreover, Lasko was reprimanded by the LJSE alongside holding Istrabenz for its purchase
of Mercator stakes from two state-run funds. They failed to disclose all price-sensitive
information, which means that investors had asymmetrical information.
Infond moreover signed a swap agreement with the Restitution Fund (SOD) under which it
offloaded an 11% stake in logistics company Intereuropa and aluminium producer Impol for a
6.98% stake in Lasko.
The SOD said the swap will ensure better short-term dividend yields, which will make it
easier to meet the liabilities that the state-run fund needs to cover based on denationalisation
claims.
Other blue chips as well as shares on the free market saw meagre volumes, as investors
moved money to bonds. The investment fund PIX index was down 94.04 points to 3,901.83,
with the bond BIO index gaining 0.97 points to 122.15.
Volumes topped SIT 4.5bn (EUR 18.8m) last week, with nearly half done in block deals.
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Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.57 (-0.02)
U.S. dollar (USD) - SIT 200.1 (+1.52)
Swiss franc (CHF) - SIT 154.01 (-0.08)
British pound (GBP) - SIT 349.64 (-3.01)
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REGIONAL INFORMATION
Nature Protection Office to Conserve Slovenia's Only Salt Meadow
The Nature Protection Office plans to build a raised wooden footpath over the only Slovenian
salt meadow in a bid to preserve the threatened area in Ankaran
The Nature Protection Office plans to build a raised wooden footpath over the only Slovenian
salt meadow in a bid to preserve the threatened area in Ankaran, the office said on Tuesday, 7
February.
The project, financed by the Principality of Monaco, aims to enable people to walk above the
wetland to preserve the plants in the area.
The path will be raised some half metre above ground and cross 170 metres of the meadow.
The project also plans for a wooden "pool" filled with shells from the nearby "shell
cemetery".
The area, located in the path of the proposed third pier of Slovenia's only seaport of Koper, is
important for its diversity of plant life as well as a part of the Natura 2000 network for the
conservation of natural habitats.
Moreover, this is a rare example of a coastal area in the eastern Adriatic, and the only such
area in Slovenia which is not composed of cliffs, rocks or sand, but is instead covered with
silt.
Therefore rare plant and animal life can be found here, including the sea rush and two saline
plants, namely the Sardinian flax and the spiked centaury that can only be found in this part of
Slovenia.
Both halophytic species are on the national list of endangered plants, however are numerous
enough in the area to form self-sufficient colonies.
Official Referendum Results Confirm Yes Vote for 12 Municipalities
The official results are expected to act as a guide for the cabinet in drafting changes to
legislation that would establish new municipalities
The National Electoral Commission adopted on Tuesday, 7 February a report on the late
January consultative referendums on establishing new municipalities. According to the
official results, due to be published in the Official Gazette, voters backed 12 new
municipalities.
The official results are expected to act as a guide for the cabinet in drafting changes to
legislation that would establish new municipalities. However, the results will not be binding
for parliament.
In line with the outcome, parliament is likely to vote on establishing the municipalities of
Apace (NE), Cirkulane (NE), Kostanjevica na Krki (SE), Sveta Trojica v Slovenskih Goricah
(NE), Sredisce ob Dravi (NE), Sveti Tomaz (NE), Makole (NE), Poljcane (NE), RenceVogrsko (W), Straza (SE), Smarjeske Toplice (SE) and Mokronog-Trebelno (SE).
Voters were against two would-be municipalities (Ankaran-Hrvatini - W; Bizeljsko - E),
whereas the majority in the area of Rimske Toplice was in favour of a new municipality, yet
the same municipality was opposed by the people of Zidani Most.
The division of the Dobrova-Polhov Gradec (central Slovenia) municipality into two
municipalities was backed only by the people of Dobrova, while those in Polhov Gradec were
against.
In line with legislation, each of the new 12 would-be municipalities would have more than
2,000 inhabitants, yet less than 5,000.
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The referendum on new municipalities came ahead of local elections scheduled for this
autumn.
All the procedures related to their establishment need to be completed by 25 March if the new
municipalities are to be included in this year's local elections.
Slovenia currently has 193 municipalities, a number regarded as rather high given its
relatively small size and population of around 2 million.
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BRANCH INFORMATION
Retailers Expect No Troubles With Double Pricing
Retailers are well prepared for the tolar/euro double pricing, according to the Trade
Association at the Chamber of Commerce and Industry of Slovenia (CCIS)
Retailers are well prepared for the tolar/euro double pricing, according to the Trade
Association at the Chamber of Commerce and Industry of Slovenia (CCIS). No serious
problems are expected, even though the retailers will have to shoulder the bulk of the costs.
As Marjanca Simsic of the association has told STA, they hope only that the final exchange
rate does not differ significantly from the current central exchange rate, so that there would be
no additional expenses.
According to the Institute for Macroeconomic Analysis and Development (IMAD), the costs
of the euro changeover will amount to SIT 5.9bn (EUR 24.6m), yet, this does not include any
additional costs.
The central exchange rate was set at SIT 239.64 to the euro when Slovenia entered the ERM
II exchange rate mechanism in June 2004. If the final and the central exchange rates differ,
the cost would increase by SIT 1.3bn (EUR 5.42m).
"We hope this parity rate will be final, which the representatives of Bank of Slovenia have
said is highly possible. However, it is all up to the EU Council," Simsic said.
In case the final exchange rate changes, the retailers will have two weeks to adjust the prices.
"These 14 days could be somewhat chaotic, as it is impossible to change all prices overnight,"
Simsic added.
Although the retailers wanted the double pricing period to be as short as possible, it will now
start a day after the final exchange rate is set, and would end at the end of June 2007.
The association's working group has been preparing for the euro changeover since December
2004, closely following the legislation process and cooperating with the Economics Ministry
in order to improve it when necessary.
The act does stipulate a few exemptions. Retailers will not have to have euro labels for units
of products but only for the final retail price, nor will double prices be required on scale
displays.
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 in a visible position.
Similarly, per litre petrol prices at filling stations will only be labelled in euros. There are also
exceptions for the sale of publications, and gaming. Moreover, small retail outlets and small
trade crafts with up to ten employees will not be required to have double price tags.
Textile retailers will have more problems, as they will have to double-label every item in the
store. "If however they already use both currencies, and the calculations are not in line with
the exchange rate, they will have to adjust the prices as defined by the law," Simsic said.
She moreover hopes the retailers will not use the euro changeover to raise prices. "It is
however true that in some countries the euro changeover led to a price increase, especially in
restaurants and of smaller products," she added.
Transport Ministry Plans to Increase Population Mobility
The Transport Ministry wants to increase the mobility of the Slovenian population, facilitate
cargo transport and link up national and international transport routes, said Transport
Minister Bozic as he outlined the ministry's agenda for 2006
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The Transport Ministry wants to increase the mobility of the Slovenian population, facilitate
cargo transport and link up national and international transport routes, said Transport Minister
Bozic as he outlined the ministry's agenda for 2006.
Bozic told the press on Monday, 6 February that the ministry would draft national
programmes on developing road, railroad, maritime and aviation infrastructure.
The minister outlined twelve strategic proposals for 2006, estimating the infrastructure
investment costs at between EUR 17bn and EUR 18bn in the next two decades, he added.
As Slovenia's budget will not suffice to carry out all the plans, alternative financing methods,
such as EU funds, will have to be sought, Bozic explained.
However, securing EU funding requires well laid-out projects, which in Slovenia is currently
the case only regarding the national motorway network construction.
Meanwhile, railroad infrastructure programmes, which are the most likely to get EU funding,
are not well drafted, therefore Bozic would take personal control over such projects.
The projects in the already drafted resolution on national railway infrastructure development,
which are to get underway this year, will alone require some EUR 10bn until 2020.
The projects include the long awaited second rail line between the port of Koper and the
Divaca transport hub. According to Bozic, the ministry will begin drafting the documentation
on the project this year.
While the second rail is planned to be completed by 2015, the modernisation of the existing
rail line is set to begin this year and is scheduled to be completed by 2010.
The rail line between the Pragersko (NE) transport hub and the border crossing with Hungary
in Hodos (NE) will also be upgraded. The electrification and reconstruction, set to finish in
2013, is expected to cost SIT 36bn (EUR 150m), Bozic said
To get the necessary funds, the ministry will also file a bill on state guarantees for loans
totalling SIT 130bn (EUR 542m) into parliamentary procedure.
Meanwhile, 6,000 kilometres of state roads, scheduled to be completely modernised and
extended by 2016, will require EUR 4bn between 2006 and 2020, with EUR 730m allocated
for maintenance, he explained.
The national motorway construction programme, despite Slovenia's Motorway Company
(DARS) getting less money in the national budget, will also continue on schedule, Bozic said.
To finance the construction, DARS plans to issue bonds to the amount of EUR 1bn, pending
parliamentary approval.
The national programme of sea transport development meanwhile includes settling owner
relations between the state and the country's sole port in Koper.
The ministry also plans to harmonise Slovenian and EU transport legislation, which is out of
sync because of past delays in transposing EU directives on the issue.
To carry out its plans this year the ministry intends to draft a total of 10 acts.
EU Says Communication Markets In Slovenia Lack Competition
The electronic communications markets in Slovenia lack competition, according to a report of
the European Commission on telecoms liberalisation, which was published in Brussels
The electronic communications markets in Slovenia lack competition, according to a report of
the European Commission on telecoms liberalisation, which was published in Brussels on
Tuesday, 7 February.
Of the 18 markets analysed in the report, Slovenia does not have effective competition in any
one of them. However, this is also true of 15 other members of the bloc, while nine have
effective competition in at least one of the markets.
The report is issued by the Commission on a regular basis, based on the electronic
communications directive. The directive binds national regulatory bodies to draft and
implement the necessary measures in cooperation with the relevant companies.
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Passenger Transport Companies Await Double Pricing Well Prepared
According to Robert Sever of the Transport and Communications Association at the Chamber
of Commerce (CCIS), members of the association should not have any problems in the period
leading up to the adoption of the euro
Public transportation companies are well prepared for the euro/tolar dual pricing period which
starts on 1 March. According to Robert Sever of the Transport and Communications
Association at the Chamber of Commerce (CCIS), members of the association should not
have any problems in the period leading up to the adoption of the euro.
Prices of transport services will be labelled in both currencies on price lists, tickets and
receipts. The only exception will be intercity buses, as prices on tickets bought on these buses
will only be in tolars.
A set of rules, which is being drafted by the Economics Ministry, also envisages intercity
trains among exceptions. However, Slovenian Railways staff will also reveal the price in
euros for the tickets bought on the train at passenger's request.
The national flag carrier Adria Airways also has not encountered any problems due to double
pricing, as it has been labeling prices of flights in euros for three years.
Yet, as of March tickets will not reveal prices for flight fees in both currencies, as the design
of the ticket is uniform around the world and cannot be changed, the company explained.
Adria Airways therefore hopes this could be exempt from legislation. They will however
reveal the price in euros at customer's request.
In line with the law, the Ljubljana public transport company Ljubljanski potniski promet
(LPP) will meanwhile also change all price lists at all places where tickets are sold, and on all
city buses.
Tourism Associations See Problems Ahead in Dual Pricing
It is already common practice to write prices in tolars and euros in hotels, bars and
restaurants, so no additional expenses are expected due to double pricing
It is already common practice to write prices in tolars and euros in hotels, bars and
restaurants, so no additional expenses are expected due to double pricing. Yet the Slovenian
Tourism Organisation (STO) and the Tourism, Hotels and Restaurant Association at the
Chamber of Commerce and Industry of Slovenia (GZS) are far from optimistic.
The two organisations have stressed that tourists might feel the consequences of the gap
between the informative price, which is based on the central parity rate, and the actual prices
in euros based on the market exchange rate.
As STO's Livija Kovac Konstantinovic told STA, prices in euros have usually been rounded
upwards in tourism. Therefore, the organisation expects the prices in tolars to go up as of
March to cover the gap between the two exchange rates.
According to Snezana Skerbinc of the CCIS, many foreign guests already pay in euros in
Slovenia. "The problem is that the informative prices will be lower than the selling prices, and
the customers will feel cheated," Skerbinc is convinced.
In her words, this is the only shortcoming of the act on double pricing, which the association
has already informed the government about.
"Yet, they would not listen to us. With the informative prices they would like to prevent
inflation which occurred in other EU countries after the euro changeover," Skerbinc
explained.
Nevertheless, the hotel chain Hoteli Morje in the coastal town of Portoroz does not expect
dual pricing to affect their guests. "Euros are used in 85% of our business, so this legislation
will bring no novelties for us," Marko Lencek of Hoteli Morje has said.
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EU Commission Received Notification On Bird Flu in Slovenia
The European Commission confirmed on 12 February that the Slovenian authorities have
notified it about the discovery of the H5 bird flu virus in a swan found in the country
The European Commission confirmed on Sunday, 12 February that the Slovenian authorities
have notified it about the discovery of the H5 bird flu virus in a swan found in the country, as
well as sent tissue samples to the EU laboratory in Weybridge in the UK.
The Slovenian veterinary institute received on Friday, 10 February two cloacal swab samples
of mute swans, found on Thursday, 9 February near Maribor (NE). Both samples tested
positive for the H5 virus.
The Slovenian authorities have furthermore said that they will immediately take the same
preventive measures as those recently taken by Greece and Italy, the Commission added.
The measures include setting up a 3 kilometre perimeter around the site where the swan has
been found, designated as the highest risk zone. Increased surveillance measures will also be
implemented in a 10 kilometre zone around the site.
As the 10 kilometre area reaches over the Austrian border, Slovenian authorities have already
began cooperating with their Austrian counterparts, the Commission said.
VURS Head Says H5 Confirmation No Reason for Panic, Urges Caution
The head of Slovenia's veterinary watchdog has said that the presence of bird flu in a dead
swan found in NE Slovenia is no reason to hit the panic button
The head of Slovenia's veterinary watchdog has said that the presence of bird flu in a dead
swan found in NE Slovenia is no reason to hit the panic button. However, Vida Cadonic
Spelic has called for caution.
"People should stay away from wild birds - they should not feed them or try to touch them,"
Cadonic Spelic said on Sunday, 12 February, after the Veterinary Administration (VURS)
confirmed that a swan found dead near Maribor in NE Slovenia had the H5 strain of bird flu.
Samples taken from the dead swan will are being sent to the EU's reference laboratory in
Weybridge, the UK. Tests there will confirm whether the virus in question is that of deadly
H5N1 strain, Cadonic Spelic told STA, adding that results should be back within a week.
The Government PR and Media office has also called for calm, saying that the confirmation
of the H5 strain of bird flu in a wild bird does not represent a grave danger for the health of
Slovenians.
Meanwhile, the Health Ministry stressed that the bird flu is only rarely passed on to people. It
added that people should avoid unnecessary contact with birds, while adding that the
consumption of cooked poultry does not present a health risk.
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COMPANIES
Aluminium Giant to Phase out Outdated Electrolysis Technology
The manager of Slovenia's leading aluminium producer Talum, Danilo Toplek, has told Delo
that the company would have to close down the outdated electrolysis B-based technology in
line with the EU directive on ecological standards
The manager of Slovenia's leading aluminium producer Talum, Danilo Toplek, has told Delo
that the company would have to close down the outdated electrolysis B-based technology in
line with the EU directive on ecological standards.
According to Toplek, Talum decided for this move due to the amount of money needed to
renovate the old facility by the end of 2007. Meanwhile, the company's electrolysis C-based
technology already operates in accordance with EU standards.
"Electrolysis B will be phased out in October, although some might think this move
unreasonable, as aluminium has already reached a record price of US$ 2,400 on the market.
Yet, we know its price will drop due to speculative investments by financial funds," Toplek
told the daily Delo on Monday, 6 February.
He is aware that this closing will pose a huge problem, as Talum will thus produce 35,000
tonnes of pure aluminium a year less. This explains why the company decided to expand the
existing electrolysis C-based technology, which many have protested against.
Toplek, who last week received a business excellence award 2005 from the Chamber of
Commerce and Industry (CCIS), also outlined the company's results, saying that in 2005
Talum produced 158,000 tonnes of aluminium, about the same amount as the year before.
The Kidricevo-based company posted sales of SIT 62.3bn (EUR 260m) and 830m (EUR
3.46m) in net profit, which has met Talum's expectations, Toplek said, adding that 82% of the
output was exported.
Health & Beauty Chain Watson Opens Store in Slovenia
The health and beauty chain Watson entered the Slovenian market by opening a store in the
northeastern town of Zalec
The health and beauty chain Watson entered the Slovenian market on Monday, 6 February by
opening a store in the northeastern town of Zalec.
The company intends to open 15 more shops in Pivka, Ljubljana and Maribor by the end of
the year, Watson's manager for Central Europe Martin Heersmink told the press.
He estimates that Watson will invest around EUR 5m in the stores in Slovenia, which are to
employ a total of 100 to 150 people.
The new shop in Zalec, which according to Heersmink is a perfect location, offers over 7,500
products, from cosmetics, healthy food and basic necessities to confectionery.
Watson's stores will also include Slovenian cosmetic products as well as products of honey
specialist Medex, which are also to be offered in the company's stores around the world,
Heersmink said.
The group with 18 chains and 3,900 shops in Europe was joined by the German chemist
company Rossman two years ago and the French perfume chain Marionnaud a year ago.
The group, whose European headquarters are located in the Netherlands, also includes
pharmacies Drogas, Kruidvat, Superdrug, Savers and Russia's Spektr.
With a 175-year tradition and 7,100 outlets on 35 world markets, Watson specialises in health
and beauty products, perfumes, health food, consumer electronics, top quality wines and duty
free shops.
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Slivnik Nominates Vecer Editor for Delo Chief Editor
Danilo Slivnik, the chairman of newspaper company Delo, has tipped Peter Jancic to take up
the post of chief editor of the leading Slovenian daily paper
Danilo Slivnik, the chairman of newspaper company Delo, has tipped Peter Jancic to take up
the post of chief editor of the leading Slovenian daily paper.
Jancic, who is currently the interior affairs editor at the Maribor-based daily Vecer, will
present his programme and editorial concept to the management in the coming days, Delo said
in a press release on Monday, 6 February.
Within 30 days of the nomination, Delo's council of journalists has to issue a formal opinion
on the nominee, which however is not binding for the management board.
The final approval has to come from the supervisory board of the company.
"The aim of appointing a new chief editor of Delo is to create normal conditions as soon as
possible, so that the work of the entire outlet can continue," the recently appointed Slivnik
said in the release.
Jancic would replace acting chief editor Darjan Kosir, who was sacked by Delo's supervisors
last autumn but resumed his work after his successor Jani Virk quit after only a few days in
office.
In his response, Jancic told STA that he hoped to win over Delo journalists so that they could
together make Slovenia's leading newspaper better.
Slivnik, the former editor-in-chief of right-leaning weekly Mag, was named Delo chairman 20
January.
Slivnik was originally appointed to Delo's management board in October. Not long after, Delo
acquired Mag and asset management firm KD Group - whose chairman is thought to be an
ally of the government of Janez Jansa - bought nearly 20% of Delo.
The supervisory board tasked Slivnik with nominating a new chief editor within 14 days. The
deadline was later extended to three weeks.
Iskra Avtoelektrika CEO Claims Cooperation with Iskra to Continue
After the failed bid of automotive parts maker Iskra Avtoelektrika to take over electronics
group Iskra, the companies are nevertheless set to continue cooperating
After the failed bid of automotive parts maker Iskra Avtoelektrika to take over electronics
group Iskra, the companies are nevertheless set to continue cooperating, Iskra Avtoelektrika
chief exec Ales Nemec told the press on Tuesday, 7 February.
Nemec's statement comes after 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 battle for Iskra begun in mid-December when Iskra Avtoelektrika published its original
takeover bid, a move that angered Iskra's management, which established a company that put
forward a counter bid.
The bidding war ended when Iskra Avtoelektrika announced that it would pull out, however
the state-run Restitution Fund (SOD) and Pension Management Fund (KAD) made it clear
that even Maos's last offer of SIT 1,145 (EUR 4.78) per share was not high enough for them.
Nemec moreover told the press that Iskra Avtoelektrika's management proposed to the
company's supervisory board to counter Maos's last bid, however the supervisors rejected the
idea because of business risks.
As Iskra is not listed on the Ljubljana Stock Exchange (LJSE), Nemec told the press that Iskra
Avtoelektrika's management assessed the value of the company share at SIT 1,133 (EUR
4,73).
Nemec added that Iskra Avtoelektrika generated EUR 167m in sales in 2005, a 10% rise over
2004. The company's business plan calls for the number to go up to EUR 260m by 2009.
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The company's management is, however, not entirely satisfied with the results, as the profits
remained below expectations due to high prices of raw materials and an unfavourable euroUS dollar exchange rate, Nemec explained.
The group, which employs 2,152 workers, aims to globalise its operations as well as to invest
some EUR 10m per year into technology and development.
Post Delivers More Profits Than Planned
The Post of Slovenia generated revenues of SIT 45bn (EUR 187.82m) in 2005, a 12% rise
over 2004
The Post of Slovenia generated revenues of SIT 45bn (EUR 187.82m) in 2005, a 12% rise
over 2004, the supervisory board of the company said on Tuesday, 7 February
The company's costs rose only 4% to almost SIT 40bn (EUR 166.95m), making the pre-tax
profits significantly higher than planned, Posta Slovenije said.
In the first eleven months of 2005, the company also increased the volume of services by 5%
to 859.55 million in comparison with the same period in 2004.
The biggest growth was recorded in delivering addressed and partly addressed direct mail,
promotional material and business packages.
The supervisors also backed the plan under which the Post is to publish tenders for transport
means, mail equipment as well as computer hardware and software.
Trimo Management Labels Takeover Bid Friendly
The management board of construction panel maker Trimo has said that the takeover offer by
the companies Medaljon, Probanka, Trimo Investment, Probanka Leasing and Zlata moneta 2
is friendly, but it does not intend to accept it
The management board of construction panel maker Trimo has said that the takeover offer by
the companies Medaljon, Probanka, Trimo Investment, Probanka Leasing and Zlata moneta 2
is friendly, but it does not intend to accept it. However, they do not oppose the takeover.
The management board will not offer to resign and recommends that the shareholders decide
themselves whether they want to accept the bid, the board writes in a press release on
Thursday, 9 February.
The board said it does not intend to accept the offer because it believes that affiliation to the
company and its trustworthiness demand such a neutral stance.
There is no agreement between the management and the bidder regarding the, the
management says, adding that it is not participating in the shareholder agreement signed by
the bidders.
However, it maintains that contacts with the bidders have so far shown their goals are in line
with the company's interests.
The Trimo management therefore believes that the executives enjoy the support of the bidder,
so they do not oppose a possible takeover.
The bid came into effect on 1 February and concerns 629.059 regular shares. The bidder
already owns 459.271 shares, equivalent to 42.2% of Trimo equity. A price of 7,300 SIT
(EUR 31.30) per share is being offered. The offer expires on 1 March.
Sugar Production to Be Conserved in Ormoz for Two More Years
Slovenia's lone sugar factory, Tovarna Sladkorja Ormoz, will keep producing sugar from
sugar beet only in 2006 and 2007 before switching to biofuel production
Slovenia's lone sugar factory, Tovarna Sladkorja Ormoz, will keep producing sugar from
sugar beet only in 2006 and 2007 before switching to biofuel production, Agriculture Minister
Marija Lukacic said after the government's session on Thursday, 9 February.
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The two-year gap would give farmers additional time to switch from sugar beet to maize and
wheat, as producing bioethanol will require some 55,000 tonnes of wheat and 77,000 tonnes
of maize, Lukacic explained.
The deal comes after a month of negotiations between the government, farmers and the Dutch
and Italian majority owners of the Ormoz plant, she added. However, the deal will not enable
all workers at the factory to keep their jobs, she pointed out.
The government also expects that factory owners will do their best to prepare the factory for
biofuel production, while the cabinet would pass suitable legal and economic conditions for
biofuel production and use in the country, she added.
Lukacic also said that sugar prices will continue to fall as a consequence of last year's EU
directive that includes a 36% cut in European sugar prices, to be phased in over a period of
four years starting in 2006.
Sugar Plant Management Pleased with Sugar Production Extension
The announcement gives us additional time to overhaul the company into a biofuel producer,
Tovarna Sladkorja Ormoz (TSO) said
The management of Slovenia's only sugar factory has accepted the government's decision to
phase out sugar production over the next two years on a positive note. The announcement
gives us additional time to overhaul the company into a biofuel producer, Tovarna Sladkorja
Ormoz (TSO) said on Thursday, 9 February.
As last-year's EU sugar reform aims at reducing the production of sugar in the bloc, it was
clear the European Commission wants to reduce the number of smaller sugar producers, TSO
boss Jurij Dogsa told the press in Ormoz.
The negotiations between the government, farmers and the Dutch and Italian majority owners
therefore concluded that the forthcoming season will be used for overhauling the plant, Dogsa
added.
"Several such cases exist in Europe and all governments promote the use of biofuels...
Preliminary studies show that such a production would be profitable and the majority owners
showed interest to invest in the necessary equipment," he explained.
Representatives of the association of sugar beet growers, who also took part at the news
conference, added that the extension will furthermore allow farmers to start growing wheat
and maize, essential components bioethanol production.
The head of the association of sugar beet growers, Franc Jursa, said that the decision is
important as a lot can change in the course of the year. The association will therefore use the
year to calculate the potential reimbursement for growers.
Under the sugar reform, the farmers are entitled to a three-year reimbursement period, should
they have to stop growing sugar beet. The latter depends on the quotas they reach this year,
Jursa added.
The November reform of the sugar sector, the first change in EU sugar policy in four decades,
includes a 36% cut in European sugar prices, to be phased in over a period of four years
starting in 2006.
The deal also provides for more flexibility in compensations to farmers who give up their
sugar quotas: farmers wishing to abandon beet growing will be paid basic compensation
equivalent to 64.2% of the revenues they lose due to the price cuts.
Moreover, the asymmetrical agreements between EU and states in the area enables the
countries of SE Europe to export much more sugar this year than last.
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DARS Gets Last Green Light for Record Loans
Parliament has passed the act on state guarantees for over one billion euros in loans that the
Motorway Company (DARS) can take out, clearing the last legislative hurdle for the record
loans
Parliament has passed the act on state guarantees for over one billion euros in loans that the
Motorway Company (DARS) can take out, clearing the last legislative hurdle for the record
loans.
The act was passed in a vote on Thursday, 9 February, just two days after the lawmakers
confirmed the act on state consensus for the loans.
According to the two pieces of legislation, DARS will be able to take out loans until 2010 to
fund the construction of 25 motorway sections.
According to Transport Minister Janez Bozic, this will allow DARS to secure the funding
necessary for the construction of 90% of the Slovenian motorway network.
In line with projections, the 25 planned sections will require EUR 371.8m of DARS's own
sources, EUR 780.9m from already existing loans, and EUR 1.03bn from the loans envisaged
by the new act.
HSE Offloading Majority Stake in TDR Metalurgija
Holding slovenske elektrarne (HSE), Slovenia's biggest power producer, published an
invitation to tender for a 90.78% stake in TDR Metalurgija, a maker of ferro-alloys and
calcium carbide
Holding slovenske elektrarne (HSE), Slovenia's biggest power producer, published on Friday,
10 February an invitation to tender for a 90.78% stake in TDR Metalurgija, a maker of ferroalloys and calcium carbide. The offer runs through 15 March.
The shares put up for sale include stakes owned by HSE, the Slovenian Railways, the Pension
Fund Management (KAD), as well as the company's own shares.
The potential bidders must submit with their offer a five-year plan which includes measures to
strengthen competitiveness and expand sales, an investment plan and a scheme for the
preservation of as many jobs as possible.
TDR Metalurgija, based in Ruse, northeast Slovenia, had 329 employees at the end of last
year and posted sales of EUR 32.4m in 2005.
The company is the last remnant of the once mighty industrial conglomerate Tovarna dusika
Ruse, which employed thousands of people at its apex in the 80s.
Metal Ravne Hoping for Another Good Year
Metal Ravne, a subsidiary of the Slovenian Steel Group, plans to make a profit of SIT 2.1bn
(EUR 8.76m) this year
Metal Ravne, a subsidiary of the Slovenian Steel Group, plans to make a profit of SIT 2.1bn
(EUR 8.76m) this year, the assistant to the general manager Andrej Gradisnik has told STA.
The profit will not match last year's SIT 3.7bn (EUR 15.44m), mainly because market
conditions will not be as favourable in 2006, Gradisnik added.
The steelmaker's business is, however, not likely to be threatened by the announced mergers
of leading companies in the industry, as the Metal Ravne produces specialty steels.
The company produced 108,000 tonnes of steel in 2005, while this year's production is likely
to be some 2,000 tonnes less, Gradisnik said.
The company's most important project in 2006 is the EUR 10m upgrade of the forging plant,
he said.
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SLOVENIA IN BRIEF
Unions Again Urge Government to Renounce Flat Tax
The four largest trade union associations in Slovenia have told the government to back away
from its plans to introduce a flat tax. The proposal poses an objective threat to the debate on
key development issues, according to union leader Dusan Semolic.
Dekleva and Godina Conferred Preseren Awards
Essayist and writer Milan Dekleva and film director Karpo Godina received the Preseren
Awards, the highest national awards for outstanding achievement in arts and culture, at a
ceremony held Tuesday, 7 February.
Government Replaces Head of Bilateral SOPS Commission
The government replaced on Thursday, 9 February the Slovenian co-chair of the CroatianSlovenian commission overseeing the implementation of the bilateral cross-border
cooperation agreement (SOPS). The Slovenian Ambassador to Portugal Bogdan Benko was
named to replace the incumbent co-chair of the commission Peter Reberc at the proposal of
Foreign Minister Dimitrij Rupel.
Erjavec Debates Afghanistan, Kosovo, Iraq Missions at NATO Meeting
"Slovenia's forces are already present in Afghanistan, while we intend to send four soldiers to
Iraq soon and strengthen our mission in Kosovo," Defence Minister Karl Erjavec told a twoday unofficial meeting of NATO defence ministers in Italy's Taormina on Thursday, 9
February.
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