Slovenia Business Week no. 11, March 13th, 2006
Table of Contents:
HEADLINES ............................................................................................................................. 3
D&B Keeps Slovenia in the Top Spot in the Region ............................................................. 3
Slovenia's GDP 3.9% in 2005 ................................................................................................ 3
Chemical Group Helios Acquires Russian Company ............................................................ 4
INTERNATIONAL COOPERATION ...................................................................................... 5
Speaker Cukjati Calls for Closer Ties with Cyprus ............................................................... 5
President Drnovsek Visits Spain ............................................................................................ 5
Slovenian Fishermen Oppose Gas Terminal in Trieste Gulf ................................................. 5
President Drnovsek Treads Cautiously in the Middle East .................................................... 6
EUROPEAN UNION ................................................................................................................. 7
EU to Publish Convergence Report for Slovenia in May ...................................................... 7
Spain to Open Labour Market to EU Newcomers, Zapatero Says ......................................... 7
Minister Says Some Old EU Members Will Lift Labour Restrictions .................................. 8
FM Says Slovenia Avid about EU Enlargement .................................................................... 8
FM Says EU Statement Start of Talks on Interim Phase for Balkans .................................... 9
Resolution of LB Debt to Be Set as Precondition for Croatia's EU Accession ..................... 9
LEGISLATION ........................................................................................................................ 11
Parliament Passes Succession Act........................................................................................ 11
Government Postpones Adoption of Amendments to Central Bank Act ............................. 11
Upper Chamber Forces Renewed Vote on Asbestos ........................................................... 12
Government Overhauls Employment Act ............................................................................ 12
Government Drafts New Bill on Freshwater Fishing........................................................... 13
Government Amends Social Security Act ........................................................................... 13
STATISTICS/FORECASTS .................................................................................................... 15
Foreign Debt Reaches EUR 19.51bn at the End of 2005 ..................................................... 15
Women Work Longer Hours Than Men, But Earn Less ...................................................... 15
Factory-Gate Prices Up 0.6% in February ........................................................................... 15
Slovenia's Trade Surplus at EUR 5m in January.................................................................. 16
Labour Costs Up 46.8% since 2000 ..................................................................................... 16
FINANCE................................................................................................................................. 17
New Valuation Puts Triglav's Value at Nearly EUR 509m ................................................. 17
SKB Says Profit Target Met ................................................................................................. 17
Aktiva Invest Backtracks on Small Shareholder Squeeze ................................................... 18
Adriatic Slovenica Posts Profit of EUR 4.2m in 2005 ......................................................... 18
SOD Launches Proceedings for Renewed Privatisation of Triglav ..................................... 19
Former Finance Minister Praises Early Convergence Assessment Request ........................ 19
Ljubljana Stock Exchange .................................................................................................... 19
Foreign Exchange ................................................................................................................. 20
REGIONAL INFORMATION ................................................................................................ 21
Bird Flu Quarantine Zone around Muta Lifted .................................................................... 21
BRANCH INFORMATION .................................................................................................... 22
Retailers Challenge Sunday Shopping Ban .......................................................................... 22
Parliament Passes Bill on Medicinal Products ..................................................................... 22
Minister Pleased with Development of Slovenian Maritime Economy ............................... 23
Farmers Want Product Promotion, Oppose Flat Tax ........................................................... 23
Real Estate Agents Unhappy with Ministry, Upbeat about Business .................................. 24
Transport Policy Resolution Promotes Mobility, Minister Says .......................................... 24
Slovenian Tourist Board Optimistic about 2006 .................................................................. 24
Slovenia Will Meet Kyoto Obligations, Minister Says ........................................................ 25
Motorway Construction Shifts into Overdrive This Year .................................................... 26
Slovenia Ahead of EU Average in Mobile Phone Use ........................................................ 26
First Technology Platform Established in Slovenia ............................................................. 27
COMPANIES ........................................................................................................................... 28
Maos Bent on Iskra Takeover .............................................................................................. 28
Titus International Becomes Majority Owner of Lama ....................................................... 28
Pfizer Withdraws Lawsuit against Krka over Yasnal Drug ................................................. 28
Chamber of Commerce and Industry of Slovenia Backs Establishment of Development
Fund ...................................................................................................................................... 29
Spar Looking to Control 25% of Market ............................................................................. 29
Acroni Boosts Profitability by Moving up the Value Chain ................................................ 30
SLOVENIA IN BRIEF ............................................................................................................ 31
Social Partners Agree on Goals of Tax System ................................................................... 31
Intereuropa CFO Dismissed ................................................................................................. 31
Transport Ministry Breaks Deadlock over Maribor Airport ................................................ 31
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HEADLINES
D&B Keeps Slovenia in the Top Spot in the Region
D&B pointed out that Slovenia fulfils all the criteria for eurozone entry planned for 1 January
2007, pending the convergence report which is to be issued by the European Commission and
the European Central Bank in October
Slovenia remains firmly in the top spot in Eastern Europe alongside Slovakia, according to the
March report of the international rating firm Dun&Bradstreet (D&B). Both have a DB2c
rating, whereby Slovenia's trend is still pointing upwards.
D&B pointed out that Slovenia fulfils all the criteria for eurozone entry planned for 1 January
2007, pending the convergence report which is to be issued by the European Commission and
the European Central Bank in October.
This means that Slovenia will be the first among the ten EU newcomers to join the eurozone.
The remaining two euro candidates, Lithuania and Estonia, have not yet fulfilled all the
criteria, D&B analysts say.
Data from the National Statistical Office showed that Slovenia's merchandise export earnings
rose 12% to SIT 3.4trn (EUR 14.19bn), while imports were 11.0% higher over the same
period at SIT 3.7trn (EUR 15.44bn). The merchandise trade deficit therefore stood at SIT
0.3trn (EUR 1.25bn).
Slovenia's Central Bank has taken advantage of favourable inflation data in January to cuts
rates on key instruments by 25 basis points on 10 February, D&B writes in its report. Despite
the cut, the tolar has maintained a rate of SIT 239.64 per euro.
The majority of Slovenians also remain in favour of the switch to the euro, with 58% looking
forward to the changeover. The average support in the 10 new EU states meanwhile stood at a
much lower 38%.
Slovenia's GDP 3.9% in 2005
Growth was propelled mainly by a strong rise in exports, which surpassed a rise in imports,
so the external trade balance added 2.3 percentage points to the GDP figure
The Slovenian economy grew by 3.9% in 2005, according to preliminary figures released by
the National Statistical Office on Thursday, 9 March, slowing down somewhat from the 4.2%
of 2004.
Growth was propelled mainly by a strong rise in exports, which surpassed a rise in imports, so
the external trade balance added 2.3 percentage points to the GDP figure. However, with the
rise of imports towards the end of 2005, its impact began to vane.
High oil prices caused import prices to grow faster than export prices, causing the real and
nominal GDP growth to stand just a percentage point apart.
GDP growth was also impacted by four working days less in comparison with 2004, which
chipped off 0.3 percentage points of the rate, Karmen Hren of the Office told the press in
Ljubljana.
Their impact was felt the most in the last quarter, when three extra bank holidays pushed the
growth rate 1.5 percentage points lower than in the same period in 2004. The economy grew
by 3.7% in Q4.
Domestic consumption was not a major contributor, as it only grew by 1.5% in 2005, much
less than the 4.5% of 2004. The cause behind the drop was a decrease in gross investments,
which picked up only in Q4.
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Added value, mainly in manufacturing as well as in financial and business services has on the
other hand contributed to the growth. Manufacturing alone added 0.7 percentage points to the
GDP growth in real terms.
The 3.9% GDP growth rate is close to the average growth rate in the past ten years and one of
the higher since 2000.
At current exchange rates, GDP amounted to EUR 27.365bn or EUR 13,700 per capita in
2005.
Chemical Group Helios Acquires Russian Company
Slovenian chemical group Helios has acquired an 82% stake in Russian decorative finishes
producer Odilak
Slovenian chemical group Helios has acquired an 82% stake in Russian decorative finishes
producer Odilak for an unspecified sum, Helios said in a press release on Thursday, 9 March.
Helios said the purchase was aimed at strengthening its market presence in the former Soviet
Union, an important market for the group.
Helios refused to specify the purchase price or other details of the deal.
According to Helios, Odilak employed 260 workers and generated revenues of EUR 13m in
2005.
Helios, the biggest maker of paints and varnishes in Central and Eastern Europe, exported
EUR 48m worth of products to the former Soviet Union last year, 70% of that to Russia.
4
INTERNATIONAL COOPERATION
Speaker Cukjati Calls for Closer Ties with Cyprus
Parliament Speaker France Cukjati called for closer ties with Cyprus, especially in tourism,
in talks with Christos Mavrokordatos, the chair of the agriculture committee of the Cyprian
parliament
Parliament Speaker France Cukjati called for closer ties with Cyprus, especially in tourism, in
talks on Wednesday, 8 March with Christos Mavrokordatos, the chair of the agriculture
committee of the Cyprian parliament.
Slovenia is following developments in Cyprus; being a small country itself, it understands the
problems of smaller countries much better than big states, Cukjati was quoted as saying by the
parliament's PR office.
He is reported as having welcomed the decision of the Cyprian authorities that open issues
with Turkey be resolved patiently on the diplomatic floor.
Cukjati also expressed satisfaction that Cyprus ratified the EU constitution, labelling it a step
forward in the desire for greater integration in Europe.
President Drnovsek Visits Spain
President Janez Drnovsek visited Santiago de Compostella and met with Galician President
Emilio Perez Tourino
President Janez Drnovsek visited Santiago de Compostella on Friday, 10 March and met with
Galician President Emilio Perez Tourino. According to Drnovsek's office, the pair expressed
satisfaction over good relations between Spain and Slovenia.
While Perez Tourino praised economic cooperation between the two countries, Drnovsek
pointed to a special relationship between Slovenia and Spain's autonomous communities.
Drnovsek's office has also announced that Spain's King Juan Carlos would host Drnovsek in a
state visit in Madrid in October.
The president stopped in Spain after a tour of the Middle East and following a stopover in
Portugal for the inauguration of the new Portuguese President Anibal Cavaco Silva.
Slovenian Fishermen Oppose Gas Terminal in Trieste Gulf
Slovenian fishermen strongly oppose a planned liquefied natural gas terminal in the gulf of
Trieste, insisting that it would cause unacceptably high pollution levels
Slovenian fishermen strongly oppose a planned liquefied natural gas terminal in the gulf of
Trieste, insisting that it would cause unacceptably high pollution levels, a subcommittee for
sea fisheries at the Agriculture and Forestry Chamber (KGZ) said on Friday, 10 March. The
issue was also discussed by Environment Minister Janez Podobnik and Italy's Ambassador to
Slovenia Daniel Verga.
Placing such a facility in the shallow and closed waters of the Northern Adriatic would spell
death for sea fishing as well as reduce the quality of life in the area, the subcommittee
believes.
It has therefore called on the government and competent ministries to do everything in their
powers to prevent the construction of the terminal.
The subcommittee pointed out that untreated sewage from residential and industrial areas
already causes high levels of pollution in this part of the Adriatic.
Additionally, bleach, which would be used at the terminal, would have a devastating effect on
tourism and fisheries.
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Slovenian media have reported that the Italian company Alpi Adriatico wants to construct the
terminal for liquefied natural gas in the middle of the Trieste Gulf, alongside Slovenia's
maritime border.
Podobnik meanwhile pointed out that Slovenia expects Italy to act in accordance with the
EU's convention on trans-border impact and EU's legislation, as he met Italy's ambassador in
Ljubljana.
Verga told the minister that the project is currently just an idea, and assured Podobnik that
Italy will include Slovenia in the assessment of the trans-border environmental impact of the
facility.
President Drnovsek Treads Cautiously in the Middle East
Slovenian President Janez Drnovsek paid an official visit to Israel and the Palestinian
territories between 6 and 9 March
President Janez Drnovsek paid an official visit to Israel and the Palestinian territories between
6 and 9 March, holding talks with senior Israeli officials as well Palestinian leaders. He did
not meet officials of Hamas, the radical movement that has won the Palestinian election, but
he did say in an interview for TV Slovenija that "Hamas should not be completely neglected
as a possible partner in searching for peace."
In meetings with Israeli counterpart Moshe Katsav and acting PM Ehud Olmert, Drnovsek
said the door for Middle East dialogue must be kept open regardless of who is in power in the
Palestinian territories. If dialogue is ruled out in advance, there would be no other alternative
but a continuation of violence. "This is the worst possible option," Drnovsek told TV
Slovenija.
According to the president, even the most radical movements can change once in power. "It
has often been the case that extremist parties, once they win at elections and are given the
responsibility, change their ways and are sometimes receptive to even more concrete
agreements than their predecessors," Drnovsek stressed.
Drnovsek and Palestinian President Mahmoud Abbas meanwhile called for tighter bilateral
ties as they met in Ramallah on Wednesday, 8 March, including the mutual opening of
diplomatic missions. Considering that Slovenia would pay special attention to the Middle East
peace process as the presiding EU country in 2008, the presidents have endorsed the idea that
appropriate diplomatic missions be opened in the Palestinian territories as well as Slovenia,
Drnovsek's office said.
6
EUROPEAN UNION
EU to Publish Convergence Report for Slovenia in May
The Commission's statement comes as a response to Slovenia's recent request for an
individual convergence assessment
The European Commission and the European Central Bank (ECB) will publish their separate
convergence reports on Slovenia's readiness to join the eurozone in May, the Commission told
STA on Wednesday, 8 March.
The Commission's statement comes as a response to Slovenia's recent request for an
individual convergence assessment.
"We received Slovenia's request last week... If the Commission assesses that the country
meets euro changeover conditions, it will send a positive opinion to the EU Council," it
added.
The Commission also said that the Economic and Financial Council will most likely take its
decision on 11 July, when it would also set the official exchange rate between the euro and
the Slovenian tolar.
The formal decision, however, is scheduled to be taken at the EU summit on 15 and 16 June
in Brussels.
The Finance Ministry told STA that Slovenia filed a request for an individual convergence
report with the Commission and the ECB.
The move was announced by Minister Andrej Bajuk in mid-February, when he said that a
joint convergence report for all euro candidates would be drafted in October, which would be
too late for Slovenia's planned 1 January 2007 switch.
The option that a non-eurozone member asks for an individual convergence report is set down
in the Treaty establishing the European Community, which also calls for regular biannual
reports. The last report to date was published in October 2004.
The convergence criteria define that a candidate country's inflation must be within 1.5
percentage points of the average inflation rate of the three euro-zone countries with the lowest
rates.
The country's deficit must moreover not exceed 3% of its GDP, the public debt must stay
below 60% of GDP and the member state must spend at least two years in the ERM II waiting
room. Slovenia entered the mechanism on 28 June 2004.
Slovenia announced that it meets the convergence criteria at the onset of 2006. Its statement
was backed in February by European Commissioner for Economic and Monetary Affairs
Joaquin Almunia.
Besides meeting the convergence criteria, Slovenia must moreover bring its national
legislation in line with the EU's. The government is therefore expected to adopt amendments
to the act on the country's central bank, Banka Slovenije.
Spain to Open Labour Market to EU Newcomers, Zapatero Says
The Spanish government has decided to open as of 1 May 2006 its labour market to EU
newcomers
The Spanish government has decided to open as of 1 May 2006 its labour market to EU
newcomers, Spanish PM Jose Luis Rodriguez Zapatero said in a daily Dnevnik on Friday, 10
March, a day after Finland announced it will do the same.
"This measure is in line with the goal of an expanded Europe, built on the basis of solidarity
and fairness. The idea about a Europe for which Spain strives for cannot be achieved if we
keep our labour markets closed," Zapatero wrote for the Slovenian daily.
7
Spain understands better than any other EU country how important this is for new EU
members, as it had to face a seven-year transitional period for the freedom of movement when
it joined the EU 20 years ago, he stressed.
Already during the talks on the EU's latest round of enlargement, Spain expressed its intention
to implement the transitional period only for the first two years, Zapatero also said.
Spain is convinced that a free labour market is the basis for a more integrated, cooperative and
successful Europe, serving as an open space for the interests of EU citizens.
In Zapatero's view, new labour force will add to the dynamics of the Spanish economy and
society, and have a positive influence on Spanish companies.
Spain's decision to open its labour market to new EU members was officially announced by
Zapatero after his meeting with Polish Prime Minister Kazimierz Marcinkiewicz in Spain's
Granada.
Minister Says Some Old EU Members Will Lift Labour Restrictions
Portugal, Spain and Finland announced that they will lift their restrictions on employment of
workers from new EU members
Portugal, Spain and Finland announced that they will lift their restrictions on employment of
workers from new EU members, Labour Minister Janez Drobnic told STA after attending a
meeting of EU labour ministers in Brussels on Friday, 10 March.
Greece and Netherlands had not yet reached a final agreement on removing the restrictions,
said Drobnic, adding that this debate might influence future decisions of other old EU
members as well.
Austria and Germany have on the other hand announced that they will extend their
restrictions, but they will allow exceptions in several sectors, he revealed.
Today's "powerful and deep debate" will definitely influence the decisions of those states that
continue to impose the restrictions, Drobnic explained.
Indeed, the three EU members that have already fully opened their labour markets, namely
Britain, Ireland and Sweden, have seen an influx of qualified workers, which has helped
economic growth, he said.
The ministers also agreed that lifting the restrictions must be accompanied by measures to
prevent illegal employment and strengthen data exchange between countries, said Drobnic,
who also met his Danish counterpart Claus Hjort Frederiksen at the sidelines.
The ministers moreover discussed the agenda for the EU Council spring meeting, agreeing
that it would make more sense to expedite reaching the current objectives rather than to set
additional goals.
Drobnic also presented Slovenia's efforts in passing legislation and measures to increase the
level of employment, especially among the most vulnerable groups.
He moreover said that although it is too soon to assess Slovenia's chances in its bid for
hosting the European Institute for Gender Equality, the country will do its best to be awarded
FM Says Slovenia Avid about EU Enlargement
Slovenia continues to be an energetic advocate of EU enlargement and is among the countries
that are endeavouring to have all countries from the Balkans become EU members, Foreign
Minister Dimitrij Rupel has said
Slovenia continues to be an energetic advocate of EU enlargement and is among the countries
that are endeavouring to have all countries from the Balkans become EU members, Foreign
Minister Dimitrij Rupel has said.
"We see the opening up of the Balkans as a fundamental, strategic EU policy," Rupel said on
the sidelines of a meeting of EU foreign ministers in Salzburg on Friday, 10 March.
8
He pointed out that it was absurd that 70% of Serbian students have never been abroad, while
it is easier for Bosnia-Herzegovina students to travel to Saudi Arabia or Pakistan than to the
EU.
"These are phenomena that need to be tackled, and Slovenia seems ideally suited to find
solutions and contribute ideas and initiatives," he said.
FM Says EU Statement Start of Talks on Interim Phase for Balkans
EU foreign adopted a joint statement which says that EU membership was the "ultimate goal"
for the Western Balkans, a step that Slovenian Foreign Minister Dimitrij Rupel has labelled
as the true start of talks on the interim phase of the enlargement process
EU foreign ministers on Saturday, 11 March adopted a joint statement which says that EU
membership was the "ultimate goal" for the Western Balkans, a step that Slovenian Foreign
Minister Dimitrij Rupel has labelled as the true start of talks on the interim phase of the
enlargement process.
The statement which the EU foreign ministers adopted after talks with their counterparts from
Albania, Bosnia-Herzegovina, Croatia, Macedonia and Serbia-Montenegro says the 25member bloc wants to take in Western Balkans states, but warns that "absorption capacity has
to be taken into account" before any new members are admitted.
"This is the start of talks on what type of vessel to find for the candidate countries and
countries that have started candidacy procedures but are still far from membership. Some
think that something between neighbourhood policy and membership should be found, for
example a common European economic area," Rupel told the press after the meeting.
According to him, there are still no answers, but the search for them is intensive. He said
solutions were sought that would "link these countries to the EU but at the same time not
complete the accession procedure...If they conclude negotiations on half of the acquis they
could, when they mature, wrap up membership talks and get the status more easily."
Rupel explained that the debate had shown that the positions of member states on the
enlargement process differ significantly, ranging from calls to stop the process altogether to
those who emphasise enlargement as a factor of stability. Slovenia is part of the latter group.
"Enlargement brings stability and balance, and fills the unnatural gap between Slovenia and
Greece."
Minister Rupel was not pleased with the "cautiousness" about enlargement, which is also
reflected in the statement. But he also underlined the mention of the need for good
neighbourly relations and mutual solutions on burning bilateral issues. The statement says that
the EU wants "possible problems between neighbouring countries resolved before
enlargement can proceed," he stressed.
Resolution of LB Debt to Be Set as Precondition for Croatia's EU Accession
Slovenian Foreign Ministry published a comprehensive document outlining Slovenia's
position on the issue
Uneasy relations between Slovenia and Croatia have heated up again after the Slovenian
Foreign Ministry published a comprehensive document outlining Slovenia's position on the
issue, in which it says that the resolution of the dispute with Croatia over guarantees of
successors to the former Yugoslavia for foreign currency deposits (the debt of Slovenian bank
Ljubljanska banka (LB) to Croatian account holders) would be set as a precondition for
Croatia's accession to the EU.
In a lengthy explanation of Slovenia's views published on the Foreign Ministry's website on
Thursday, 9 March, the ministry provides a comprehensive list of arguments why Croatia
should vouch for foreign currency deposits on its territories like other successor states did.
The ministry argues that the agreement on succession, which all successor states signed in
9
Vienna on 29 June 2001, did not provide a final solution to the issue of guarantees for foreign
currency deposits. But, it has clearly defined the avenues and the forum for the resolution of
this issue.
However, despite repeated appeals Croatia remains the only successor state which has not
expressed willingness to start negotiations. This, according to the ministry, represents a failure
to honour international commitments. Due to this disregard for international treaties and
deviation from the standards of the rule of law, which are common to all EU member states,
Slovenia will "justifiably make the resolution of this issue a precondition in Croatia's talks on
the accession to the EU," the ministry concludes.
Foreign Minister Dimitrij Rupel reiterated the stance a day later. "Faced with European
reality, we become more serious and problems are easier to solve. This may be just the
context that brings us to a solution. In the face of the EU, we must behave in a European, not
Balkan manner," he said. According to the foreign minister, the matter is about "the free flow
of capital, one of the main liberties in the EU and something which is untouchable".
In response, the Croatian Foreign Ministry reiterated Croatia's position - that this was a
question of the bank's commitment to its clients. Therefore, Slovenia's attempts to "share the
burden of a commercial bank's debt towards its clients among all successors of the former
Yugoslavia," are unacceptable, the ministry said on Friday, 10 March.
Indeed, the Croatian ministry said, Slovenia was the first to meddle with the relation between
the LB and its clients by passing a constitutional act in 1994 which broke up the LB into the
Nova Ljubljanska banka (NLB) and the LB. "The NLB took over the assets and continued to
make payments to Slovenian savers, while the LB kept formal obligations to non-Slovenian
clients, even though it was left without assets."
For Minister Rupel, the announcement that this issue would be raised in accession talks does
not represent an escalation of tension. "Slovenia has always explained and advocated its
positions consistently," he said.
10
LEGISLATION
Parliament Passes Succession Act
The legislation transforms the succession fund into a public fund in charge of dealing with
succession issues and regulates the status of the high representative for succession
Parliament confirmed the government-sponsored succession act with 64 votes in favour and
none against. The legislation transforms the succession fund into a public fund in charge of
dealing with succession issues and regulates the status of the high representative for
succession.
Under the act, the fund will manage and distribute assets earmarked for accession and
coordinate the cooperation between competent ministries and the high representative for
succession, who are jointly in charge of implementing the succession agreement between the
former Yugoslav republics.
The fund will moreover oversee Slovenia's claims and obligations in the process of dividing
the assets, rights and obligations of the former Socialist Federative Republic of Yugoslavia.
The MPs also confirmed the amendment to Article 9 of the legislation (61:0) which demands
that the fund's supervisory board file annual reports about its activities to the National
Assembly.
The legislation also changes article 23 of the current act on the transformation of the
succession fund, which had been deemed unconstitutional by the Constitutional Court.
Under the currently valid act, all procedures by Croatian account holders in the defunct LB
bank (which were frozen under the unconstitutional legislation) could start anew.
According to the government, this could cause severe damages to the LB and the Nova
ljubljanska banka (NLB) bank, in view of the proceedings in Slovenia as well as the case
launched at the European Court of Human Rights.
The amended article 23 calls for such procedures to remain frozen until the issue of receiving
guarantees by the former Yugoslavia or the former joint country's central bank for such
accounts is resolved.
The act also regulates the status of the high representative for succession - Miha Pogacnik was
appointed to the post last April and now has full powers.
Under the legislation, the fund must provide the means for the representative's activities. The
representative is appointed by the government and answers to the cabinet.
The act is set to regulate the implementation of the framework agreement on succession,
signed by five successors to the former Yugoslavia in June 2001. Slovenia ratified the
agreement in July 2002.
Government Postpones Adoption of Amendments to Central Bank Act
The amendments are crucial, for they harmonise the act with the provision of the Treaty of the
European Communities, and the statutes of the European System of Central Banks and the
European Central Bank
The government was expected to adopt amendments to the act on the Bank of Slovenia on
Thursday, 9 March, but it decided to postpone the decision until it receives possible remarks
from the European Central Bank, according to government spokesman Valentin Hajdinjak.
The amendments are crucial, for they harmonise the act with the provision of the Treaty of the
European Communities, and the statutes of the European System of Central Banks and the
European Central Bank.
This is also one of the criteria for the adoption of the euro alongside the fulfilment of the
convergence criteria.
11
Despite the postponement, therefore, the government will adopt the amendments in the
coming days so that they can be fast-tracked at the next parliament session, Hajdinjak
explained.
Upper Chamber Forces Renewed Vote on Asbestos
The National Council has vetoed the asbestos act that the National Assembly passed earlier
this month
The National Council has vetoed the asbestos act that the National Assembly passed earlier
this month.
The councillors voted unanimously, 29-to-0, to veto the government-sponsored asbestos act,
which they believe fails to comprehensively deal with asbestos-induced illnesses.
According to Marta Turk, the chair of the upper chamber's economic affairs commission,
which called the session, the act reduces the rights of those who have fallen ill compared to
the current legislation.
The councillors said that the bill needs to deal more comprehensively with the problem of
asbestos-related illnesses in Slovenia.
Among other things, the councillors believe legislation must expand the rights of those
suffering asbestos-related illnesses, including to inhabitants of places affected by asbestos
pollution and not just workers in factories with asbestos pollution, as the government
legislation proposes.
Moreover, the National Council said in its explanation of the decision that groups
representing asbestos patients should be included in the legislative process.
Government Overhauls Employment Act
The government has adopted amendments to the employment act, which envisage farreaching changes in order to improve the efficiency of the National Employment Service,
equalise the status of those in public works with regular employees and set new standards for
registers managed by the Employment Service
The government has adopted amendments to the employment act, which envisage farreaching changes in order to improve the efficiency of the National Employment Service,
equalise the status of those in public works with regular employees and set new standards for
registers managed by the Employment Service.
According to Minister of Labour, Family and Social Affairs Janez Drobnic, the amendments
are "clearer about accepting and rejecting work" offered by the Employment Service.
The service will thus be able to offer those who are receiving unemployment benefits any
fixed-term or part-time employment, humanitarian work of similar job for up to 56 hours a
month.
Any person who rejects a job suitable for their qualifications loses unemployment benefits.
Even if the rejected job is deemed merely as "appropriate", the unemployed person can still be
removed from the register of unemployed persons.
The stricter system has been accepted by social partners, who maintain that it is better to
accept work and preserve work skills than to stay at home, Minister Drobnic explained after
the cabinet session on Thursday, 9 March.
The amendments also determined the amount of costs that student job agencies can claim as
operating expenses (which is now determined in an executive regulation).
Moreover, the job agencies will have to set aside 10% of the income they make with student
labour for a public fund that will be used for grants according to a new act on grants that is in
the making. "This provision could lower the profits of job agencies," Drobnic added.
12
Meanwhile, those who got jobs through public works will be entitled to an annual holiday
allowance like regular employees, whereas their salaries will be defined in proportion to the
minimum salary.
Also crucial, according to Drobnic, are provisions which motivate employers to employ
persons younger than 26 and older than 55: the employers will be exempt from contributions
for both groups of employees for the period of employment.
Drobnic believes this will reduce the number of unemployed in both age groups.
Government Drafts New Bill on Freshwater Fishing
The government has adopted a bill on freshwater fishing, which will replace the 1976 act
The government has adopted a bill on freshwater fishing, which will replace the 1976 act. The
new bill will adapt freshwater fishing to EU regulations and meet numerous new
environmental demands, Agriculture Minister Marija Lukacic told the press on Thursday, 9
March.
In accordance with the bill, licenses for fish-stock management will be awarded anew. While
fishing clubs have managed fish stocks for free for the past 50 years, the state will now award
30-year licences that will cost the clubs 10% of their revenues.
According to Lukacic, one of the main reasons for the adoption of the bill is to give owners of
water areas the chance to win licences for commercial fishing, for which there is great
interest.
Planning will be subject to new regulations. So far fishing clubs would draw up long-term and
one-year management plans and implement them pending approval by the appropriate
administrative unit.
The new bill meanwhile stipulates that the planning would pass over to the National Fishing
Institute, which will draw up six-year plans to be confirmed by the agriculture and
environment ministries.
Another novelty is a set of provisions on the repopulation of fish stocks, an area which has not
been subject to any legislative provisions so far, Lukacic said.
Moreover, all managers of fish stocks will have to be members of the National Fishing Union
as so far, but membership in regional fishing associations will not be mandatory any more.
The current act (provisions that have proved good will be preserved, according to Lukacic)
stipulates that all bodies of fresh water are also fishing areas. Fishing management is currently
allowed on 11,823 hectares of fresh water
Government Amends Social Security Act
The government adopted amendments to the social security act, which introduce changes to
social benefits and the co-financing of home care assistants
The government adopted amendments to the social security act, which introduce changes to
social benefits and the co-financing of home care assistants, Minister of Labour, Family and
Social Affairs Janez Drobnic told the press after the cabinet session on Thursday, 9 March.
In line with the amendments, social benefits recipients are no longer entitled to the aid once
they are employed. Up to now, social benefits recipients have been receiving full aid for three
months after they were employed and half for the next three months.
The only exception of the new changes are cases when family income is still below a certain
threshold. In such cases, families will be able to ask for additional aid.
Social benefits recipients will be obliged to accept the employment offered, otherwise they
will lose the right to the benefits, Drobnic stressed.
The amendments also envisage cooperation of municipalities in choosing home care
assistants, which will from now on be decided on by a special commission for disabled
persons at the Pension and Disability Insurance Institute (ZPIZ).
13
Home care assistants will be co-financed from the funds for home care and help, or for help
and catering. This will lower the expenditures of the municipalities for these assistants by a
third.
The amended legislation furthermore provides institutional care for those who have recovered
from a serious illness in hospital but are yet unable to live on their own or to receive
appropriate home care.
14
STATISTICS/FORECASTS
Foreign Debt Reaches EUR 19.51bn at the End of 2005
Slovenian foreign exchange reserves totalled EUR 8.83bn at the end of 2005
Slovenian foreign exchange reserves totalled EUR 8.83bn at the end of 2005, falling EUR
10.68bn short of the overall foreign debt, which amounted to EUR 19.51bn, according to the
latest Bulletin of the Bank of Slovenia.
The bulk of foreign exchange reserves in December belonged to the central bank (EUR
6.77bn), while EUR 2.06bn were the reserves of commercial banks.
Most of the overall foreign debt in December was long-term debt (EUR 14.4bn). Short-term
debt amounted to EUR 3.87bn and liabilities to affiliated enterprises to EUR 1.24bn, the
central bank says.
While private debt totalled EUR 15.72bn, public and publicly-guaranteed debt amounted to
EUR 3.79bn in December.
Women Work Longer Hours Than Men, But Earn Less
On average women in the EU live longer than men, have less free time, spend more hours per
day studying or doing household chores, and are worse paid than men, according to statistics
published by Eurostat
On average women in the EU live longer than men, have less free time, spend more hours per
day studying or doing household chores, and are worse paid than men, according to statistics
published by Eurostat on the eve of 8 March, International Women's Day.
In Slovenia women have over an hour less free time per day than men, which is the largest
discrepancy in the entire EU. Together with Lithuanian women, they spend the longest hours
(an average of 8 hours per day) at work, study or doing household chores.
Details for 2004 show that women on average earn 15% less than men. In Slovenia women
earned 9% less than men according to Eurostat figures for 2002.
The EU average for women employed in leading positions in 2005 is 32.1%. In Slovenia the
figure is 32.8%.
In January 2006, 9.6% of women in the were unemployed, while in the male population the
figure stood at 7.6%. The figure for Slovenian women is 6.7%.
In 2004 European women on average lived 6 years longer than men with an average lifespan
of 81.2 years. In Slovenia the figure stands at 80.7 years.
The average EU birthrate in 2004 was 1.5 children per woman. Slovenian women are well
below the average with only 1.25 children per woman.
According to figures for 2004 the average age of women in the EU at the birth of their first
child was 28.2 years, up by 1.4 years on 1994. In Slovenia these figures are 27.5 and 25.6
years respectively.
In terms of women having completed secondary education in 2005, Slovenia has the highest
proportion with 93.5%, the EU average standing at 80%. The proportion of female students in
higher education in the EU in 2003 stands at 55%; in Slovenia it is 56.2%.
However women students number only 37.3% in the natural sciences, mathematics and
computing in the EU and 65.6% in the humanities and arts. These trends are also noticeable in
Slovenia with the figures being 30% and the 73.4% respectively.
Factory-Gate Prices Up 0.6% in February
From the beginning of January, factory-gate prices rose by 0.5%
15
Factory-gate prices rose 0.6% in February compared with January, putting the yearly price
increase at 1.6%, according to data by the National Statistical Office. From the beginning of
January, factory-gate prices rose by 0.5 %.< BR>
The most substantial price increase in February was recorded in water supply and electricity
prices, which went up by 2.8%.
Meanwhile, prices in manufacturing rose by 1.4% over those of February last year. Forestry
and mining prices went up by 0.4%, the office said.
The factory-gate prices for mining saw the largest monthly price rise (1.7%), while
manufacturing activities cost 0.1% more than in January. Forestry prices rose 0.5% compared
to the month before.
Slovenia's Trade Surplus at EUR 5m in January
Slovenia's exports totalled EUR 1.219bn in January, while imports stood at EUR 1.214bn
Slovenia's exports totalled EUR 1.219bn in January, up 18.9% over the year before, while
imports stood at EUR 1.214bn, an increase of 14.2% year-on-year. Exports topped imports by
0.4%.
According to preliminary data released by the Statistical Office, the Slovenian economy had a
trade surplus of EUR 5m in January, after posting a deficit of EUR 306.4m in December
2005.
The surplus is a result of buoyant exports to non-EU countries, which increased by 22.2% y/y.
Export to EU members rose by 17.7% over 2005. Similarly, imports from non-EU states went
up 27.4% and from EU countries 11.1%.
Labour Costs Up 46.8% since 2000
The highest rise (82%) was recorded in the electricity, gas and water sectors, followed by
mining, where a worker cost 62.5% more an hour in Q4 of 2005 than in 2000
Average costs of labour in the final quarter of 2005 were 46.8% above their 2000 levels,
according to preliminary data released by the National Statistical Office on Sunday, 12
March.
The highest rise (82%) was recorded in the electricity, gas and water sectors, followed by
mining, where a worker cost 62.5% more an hour in Q4 of 2005 than in 2000.
Financial services were not far behind, with a 58.4% increase in labour costs, followed by
fishing (51.9%) and manufacturing (51.1%), the data also shows.
On the other side of the spectrum, labour costs in agriculture, hunting and forestry jumped by
35.9%, costs in hotels and restaurants increased by 31%, while the lowest rise was recorded in
public administration, defence and social insurance (30.8%).
The labour cost indices are internationally comparable, the Office has said. They were first
calculated in Slovenia for Q2 of 2004.
16
FINANCE
New Valuation Puts Triglav's Value at Nearly EUR 509m
Carried out by PriceWaterhouseCoopers upon the request of the state-run Restitution Fund
(SOD), the assessment puts the value to be SIT 61.2bn (EUR 255.45m) higher than the
previous valuation
A new valuation of Zavarovalnica Triglav has put the insurer's 1 January 2001 value at SIT
121.8bn (EUR 508.4m), almost double the sum of a previous valuation which had been the
basis for the launch in 2003 of the privatisation of Slovenia's largest insurer.
Carried out by PriceWaterhouseCoopers upon the request of the state-run Restitution Fund
(SOD), the assessment puts the value to be SIT 61.2bn (EUR 255.45m) higher than the
previous valuation, SOD director Marko Pogacnik told the press on Monday, 6 March
Pogacnik added that SOD, the custodian of the state stake in Triglav, which has been
overseeing the privatisation, will now relaunch the sale of Triglav shares in accordance with
the new value of the company.
SOD decided in February 2005 to freeze Triglav privatisation after Finance Minister Andrej
Bajuk revealed new information indicating that a 2003 valuation by another firm showed the
insurer was worth double that found by the initial valuation from 2001.
The PriceWaterhouseCoopers audit of 2001 estimated the total value of Triglav at SIT 60.6bn
(EUR 252.95m), the figure on which the 2003 privatisation procedure was based.
The Triglav management came under fire for allegedly concealing the second valuation, but
the board said in January 2005 that the second valuation had been done for internal purposes
and its results were confidential.
In line with the insurance privatisation act, the share of state capital in Triglav was found to
stand at 85.1%. Launching the privatisation of this stake in late 2003, SOD put up 36.8% of
Triglav to private legal entities that held insurance policies with Triglav in 1990.
According to Pogacnik, the new valuation means the budget will get an additional SIT 12bn
(EUR 50.1m) on top of SIT 21bn (EUR 87.65m) from the sale.
Pogacnik moreover said that the decision to freeze the privatisation was correct as it
"prevented some people from getting rich unlawfully." Asked why the gap occurred and
whether SOD would call anyone to account, Pogacnik said that measures would be taken "if
necessary".
According to him, the methodology was the same, but the latest valuation took into account
"certain facts" that had been overlooked. The biggest differences between the valuations were
in life and property insurance, and the value of subsidiaries.
Pogacnik was unable to explain how come that the value of the insurance company remained
unchanged over four years, considering that a Deloitte&Touche valuation on 31 December
2004 put the price at between EUR 510m and EUR 570m.
SKB Says Profit Target Met
Slovenia's fourth-largest bank, SKB banka, has finished the year with a net profit of SIT
4.88bn (EUR 20.37m)
Slovenia's fourth-largest bank, SKB banka, has finished the year with a net profit of SIT
4.88bn (EUR 20.37m), which it said was in line with forecasts.
According to the bank, November's heist of the bank's central safe deposit box facility in
Ljubljana did not have a major impact on results due to insurance cover.
The bank, a member of France's Societe Generale group, saw a 25% rise on consumer and
business loans last year, a press release from SKB said on Monday, 6 March.
17
The bank nevertheless saw its interest revenues decline by 9% to SIT 10.73bn (EUR 44.78m)
due to stiff competition on the banking market.
Aktiva Invest Backtracks on Small Shareholder Squeeze
The general assembly of investment company Aktiva Invest decided to return the nominal
value of its share to SIT 1,000 (EUR 4.17), thereby allowing thousands of small shareholders
to remain its owners
The general assembly of investment company Aktiva Invest decided to return the nominal
value of its share to SIT 1,000 (EUR 4.17) on Monday, 6 March, thereby allowing thousands
of small shareholders to remain its owners.
The decision is an U-turn on a last year's AGM decision to increase the nominal value of
Aktiva Invest shares to SIT 1m (EUR 4,174), thereby squeezing out some 68,000 small
owners.
After coming under immense pressure from the media, the management decided on 31
January to call another general assembly at which it intended to reduce the nominal value of
the share back to SIT 1,000 (EUR 4.17).
The AGM also decided to keep the initial capital of the company unchanged at SIT 45.3bn
(EUR 181.57m), while the number of shares would increase to 45,314,000.
The company's CEO Ales Okorn meanwhile said that Aktiva Invest will submit a suitable bid
to all shareholders who want to sell their stakes.
The company plans to call another general assembly in the next two weeks in order to
establish a special fund of Aktiva's own shares, Okorn added.
The decision was also welcomed by the Slovenian association of small shareholders.
According to the head of the association Kristjan Verbic, the move was brought about by the
pressure of the media and small shareholders, while Aktiva's management kept its promise as
well.
Nevertheless, two Aktiva Invest shareholders, the Dumas company and the Monera company,
have announced that they will challenge the decision, but offered no comment.
After reducing the nominal value, Aktiva Holdings would retain a 75% ownership of the
company, in contrast to the current 99%.
Aktiva Holdings is run by 40-year-old Slovenian managerial guru Darko Horvat, who made
his fortune during the privatisation of Slovenian companies in the early 1990s.
Adriatic Slovenica Posts Profit of EUR 4.2m in 2005
Insurance company Adriatic Slovenica posted a profit of SIT 1bn (EUR 4.17m) for 2005 on
premiums of SIT 48bn (EUR 200.3m), which gives it a domestic market share of 23%
Insurance company Adriatic Slovenica posted a profit of SIT 1bn (EUR 4.17m) for 2005 on
premiums of SIT 48bn (EUR 200.3m), which gives it a domestic market share of 23%, the
company said on Tuesday, 7 March.
Chairman Dusan Novak told the press that the insurer paid out damages of SIT 29.5bn (EUR
123.1m) last year, with SIT 8bn (EUR 33.4m) earmarked for reserves.
It is estimated that Adriatic Slovenica will pay out damages of just over SIT 34.1bn (EUR
142.2m) this year, and spend SIT 3bn (EUR 12.52m) on payments for health insurance risk
equalisation schemes, Novak said.
The second largest insurance company in the country was created with the merger in May
2005 of Slovenica and Adriatic under the aegis of asset management firm KD Group, which is
the majority owner with a 90% share.
18
SOD Launches Proceedings for Renewed Privatisation of Triglav
The state-run Restitution Fund (SOD) has notified 527 legal entities on the renewal of
proceedings regarding the purchase of shares in Zavarovalnica Triglav, after a new valuation
doubled the value of Slovenia's largest insurer
The state-run Restitution Fund (SOD) has notified 527 legal entities on the renewal of
proceedings regarding the purchase of shares in Zavarovalnica Triglav, after a new valuation
doubled the value of Slovenia's largest insurer.
The new value of Triglav, which was revealed on Monday, 6 March, puts the insurer's 1
January 2001 value at SIT 121.8bn (EUR 508.4m), almost double the sum of a previous
valuation which had been the basis for the launch in 2003 of the privatisation of the company.
The notification was sent to legal entities that have the right to purchase shares in Triglav (the
companies that held insurance policies at Triglav in 1990).
In line with the new value estimate, SOD, the custodian of the state stake in Triglav, which
has been overseeing the insurer's privatisation, will later also relaunch the sale of Triglav
shares, SOD wrote in a press release.
According to the new value estimate, Triglav's share is now worth SIT 11,219 (EUR 46.83)
above its previous price. SOD director Marko Pogacnik said that the budget will therefore get
an additional SIT 12bn (EUR 50.1m) on top of SIT 21bn (EUR 87.65m) from the sale.
Former Finance Minister Praises Early Convergence Assessment Request
"It is a well timed move with good arguments," Mramor commented for STA, adding that the
nominal convergence criteria have been met and were relatively stable
According to former Finance Minister Dusan Mramor, Slovenia's request for an individual
convergence assessment, which will entail reports by the European Commission and the
European Central Bank on Slovenia's readiness to join the eurozone, was entirely logical.
"It is a well timed move with good arguments," Mramor commented for STA on Wednesday,
8 March, adding that the nominal convergence criteria have been met and were relatively
stable.
In his view there is no reason why the only remaining criteria - a two-year participation in the
ERM II system - should not be fulfilled by June this year.
According to Mramor, the final euro-tolar exchange rate should be set as soon as possible. He
also called for euro changeover preparations to be stepped up radically in some areas, saying
that the changeover process should by no means be underestimated.
Ljubljana Stock Exchange
The main market SBI 20 index shed 21.72 points to 4,514.97
The Ljubljana Stock Exchange (LJSE) has been gripped by winter blues, as a combination of
paltry volumes and falling prices made for some of the dullest action in months. The main
market SBI 20 index shed 21.72 points to 4,514.97 on trading worth SIT 8bn (EUR 33.4m),
more than half of it in block deals.
Oil trader Petrol was the busiest issue last week. Deals were worth SIT 2.87bn (EUR 12m),
but almost all of it in block deals. Petrol shed 1.14% to SIT 69,480 (EUR 290).
Food, energy and tourism conglomerate Istrabenz also generated hefty volumes (SIT
1.07bn/EUR 4.47m), but again most of it was done in block deals. Istrabenz was the biggest
loser among busy shares, dropping 2.64% to SIT 7,411 (EUR 30.93).
Trading in Istrabenz was affected by news about the dismissal of the CEO's main advisor,
Gorazd Cuk.
Drug maker Krka was the outstanding performed among the big names despite a more
moderate volume of SIT 988m (EUR 4.12m). Krka added 1.19% to SIT 119,238 (EUR
497.68).
19
The free market was even more subdued, but popular investment funds nevertheless gained
some ground to push the PIX investment fund index up 10. 57 points to 3,850.74. The bond
BIO index shed 0.41 points to 120.99.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.59 (+0.02)
U.S. dollar (USD) - SIT 201.00 (+1.64)
Swiss franc (CHF) - SIT 152.93 (-0.44)
British pound (GBP) - SIT 349.06 (-0.84)
20
REGIONAL INFORMATION
Bird Flu Quarantine Zone around Muta Lifted
The 10-kilometre surveillance zone will be lifted 30 days after the last confirmation of a case
of bird flu
Slovenian veterinary authorities on Wednesday, 8 March removed the 3-kilometre quarantine
zone around Muta, the second bird flu outbreak site in the country, as 21-day period from the
last disinfection and the discovery of the only case of bird flu expired on Tuesday, 7 March.
The 10-kilometre surveillance zone will be lifted 30 days after the last confirmation of a case
of bird flu, according to Vida Cadonic Spelic, the head of the National Veterinary
Administration (VURS).
Muta in the northeast was declared an outbreak site after the first animal that tested positive
for bird flu, a swan found in Maribor, had been taken to a veterinary office there.
The nearby village of Sv. Primoz was also the site of the only preventive cull of poultry, as
the woman who had brought the infected swan lived on a farm there. About 170 chickens
were culled.
In addition to Muta, there are currently six designated bird flu outbreak sites in Slovenia
where 3-kilometre quarantine zones and 10-kilometre surveillance zones were declared.
Five are located at and around the city of Maribor and one at Markovci near the city of Ptuj,
all of them lying along the river Drava.
21
BRANCH INFORMATION
Retailers Challenge Sunday Shopping Ban
Slovenia's largest grocer Mercator and 16 other retailers filed a constitutional challenge of
the trade act's provisions preventing shops from keeping Sunday opening hours
Slovenia's largest grocer Mercator and 16 other retailers filed on Monday, 6 March a
constitutional challenge of the trade act's provisions preventing shops from keeping Sunday
opening hours, Mercator said in a press release.
According to Mercator, several provisions of the legislation, passed in December, as well as
subsequent amendments are vague and violate the principle of the rule of law.
The legislation moreover treats retailers unequally and defines exceptions (under which shops
selling necessities can stay open on Sundays) in a discriminatory way, thereby violating the
retailers' right to a free business initiative.
Indeed, large turnouts at stores on Sunday proves that consumers want stores to remain open
on Sundays as well, the company added.
The retailer also labelled administrative limitations of the opening hours as unsuitable and is
convinced that the social partners - the state, employers, and labour representatives - will be
able to reach a deal on opening hours among themselves.
A constitutional challenge of the law was already filed in December by wholesaler and
retailer Emona Obala Koper, which runs the Noc in dan chain of 24-hour convenience stores.
The Constitutional Court on 14 February granted Emona Obala's request for a stay of
implementation of a provision of the law which bans shops from keeping Sunday shopping
hours pending a final ruling on the matter.
Until a final ruling, all of the shops selling necessities can be open on Sundays.
Parliament Passes Bill on Medicinal Products
The parliament endorsed the bill on medicinal products, whose main novelty is the permission
for the sale of certain over-the-counter drugs in specialist stores other than pharmacies
The parliament on Tuesday, 7 March endorsed the bill on medicinal products, whose main
novelty is the permission for the sale of certain over-the-counter drugs in specialist stores
other than pharmacies.
After the parliament threw out in the second reading a set of disputed provisions, which
would introduce a list of mutually replaceable drugs, the MPs passed the bill after the third
reading in a 61:1 vote.
Protests against these provisions have been mainly voiced by the opposition as well as the
public, especially by patient associations, who have warned that they could demand a
referendum on the issue.
The provision on more liberal drug sales was also confirmed despite fears from pharmacists,
who claim this will increase the risk of poisoning and abuse in the absence of medical advice
at purchase.
Several safety mechanisms were added to alleviate these fears: the specialist stores can sell
drugs only to persons over the age of 18, and the regulatory authority may introduce
restrictions on the potency and package size.
Moreover, only drugs with a favourable ration between benefit and risk, and with an
appropriate toxicovigilance and pharmacovigilancee profile, can be sold in these stores.
In general, the bill regulates the use of drugs in medicine and for veterinary purposes, sets
quality standards and testing procedures, and regulates manufacturing, prices and supervision.
Under the bill, the Public Agency for Medicinal Products and Devices will also be set up.
22
Minister Pleased with Development of Slovenian Maritime Economy
Minister Bozic said that a record 13 million tonnes of cargo passed through Luka Koper in
2005
The Slovenian maritime economy is successfully entering the global market, headed by
Slovenia's only port Luka Koper and other maritime-related activities, Transport Minister
Janez Bozic said in Koper on Tuesday, 7 March.
Bozic, speaking at a ceremony marking Slovenia's Maritime Day, said that a record 13 million
tonnes of cargo passed through Luka Koper in 2005.
Also a record in 2005 was the number of railroad shipments to and from the port, which have
increased by 50% in the last four years, he revealed.
At the same time shipping company Splosna plovba Portoroz also achieved exceptional
results in 2005, increasing its flotilla to 20 ships with a combined tonnage of 684,000 tonnes,
the most in the company's 50-year history, he explained.
The transport minister also expects the maritime economy to continue to prosper, fuelled by
anticipated favourable economic conditions on global markets and the EU's policy which calls
for transfer of cargo shipments to the sea motorways.
Farmers Want Product Promotion, Oppose Flat Tax
Calls for a law on the promotion of Slovenian products and opposition to the flat tax were the
guiding lines of the 33rd annual meeting of cooperatives in Portoroz
Calls for a law on the promotion of Slovenian products and opposition to the flat tax were the
guiding lines of the 33rd annual meeting of cooperatives in Portoroz, which wrapped up on
Wednesday, 8 March.
Following EU entry, shop shelves are stocked with products from abroad which are of inferior
quality to Slovenian products but still sell well. This is a big problem for Slovenian
agriculture, Peter Vrisk, the head of the Association of Cooperatives, said in his opening
address.
He therefore called for a law on the promotion of Slovenian products which would stipulate
that all sectors in the food industry allocate a certain percentage of their sales for the
promotion of Slovenian products.
Agriculture Ministry State Secretary Franci But promised that such a law would come into
effect in 2007 at the latest. The government would provide half of the required funding with
the help of the EU, while farmers and the food industry would secure the remaining funds.
In addition to calling for product promotion, Vrisk also underlined the farmers' opposition to
the flat tax. "The Association of Cooperatives is in favour of reforms, but only measures that
will not hurt agriculture, the food industry or low-income groups," he said.
Franci But sided with the farmers. He said tax reform was "urgent since Slovenian economy is
unattractive for domestic as well as foreign investors, but the flat tax rate would have an
adverse impact on agriculture and the food industry."
According to him, it would put pressure on the food industry, which would then squeeze
farmers. The flat tax could lead to the takeover of Slovenian food companies by big European
corporations, especially in meat and milk processing, he thought.
Tax expert Marko Kranjec, a professor at the Faculty of Administration, was even harsher.
"The reform overall is poorly designed, but the proposals for the field of agriculture are
especially bad," he said, adding that the flat tax would seriously jeopardise Slovenian
agriculture.
23
Real Estate Agents Unhappy with Ministry, Upbeat about Business
Slovenian real estate agents are unhappy with the actions of the Ministry of the Environment
and Spatial Planning regarding the implementation of the act on real estate agency, yet they
are bullish about the property market in the coming years
Slovenian real estate agents are unhappy with the actions of the Ministry of the Environment
and Spatial Planning regarding the implementation of the act on real estate agency, yet they
are bullish about the property market in the coming years.
According to the Real Estate Association at the Chamber of Commerce and Industry of
Slovenia (CCIS), the realtors are unhappy with the registration and issuance of ID cards:
whereas 850 agents have so far passed the exam, only 646 have actually received the
mandatory ID cards.
Speaking to the press on Wednesday, 8 March, the association's secretary Anton Kozar also
criticised the ministry for its lax sanctioning policy. The ministry has revoked only three
licences due to violations, but it should have revoked many more, he said.
"There is willingness in the guild to create order, to allow those with the know-how to carry
out the business and get rid of the horse-dealers that are not trained to do the job," he said.
While critical of the ministry, the association is upbeat about the market for the coming years,
especially due to the expected entry into force of the acts on valuation and registration of
property.
Kozar expects the market, which is estimated at SIT 440bn (EUR 1.84bn) for 2005, or 7% of
GDP, to grow at a fast pace in the coming years despite a hefty price increase last year.
The market was boosted in 2005 by foreign buyers, who bought 536 pieces of property and
accounted for 1.4% of the total turnover.
The figure might rise this year, as eight real estate agencies will be in London next week to
promote Slovenia as a property-investment destination at the Homebuyer Show to capitalise
on the great interest in Great Britain for Slovenian properties.
Transport Policy Resolution Promotes Mobility, Minister Says
Transport Minister Janez Bozic has told a public debate in parliament that the main aim of
the draft resolution on transport policy is achieving maximum mobility in Slovenia
Transport Minister Janez Bozic has told a public debate in parliament that the main aim of the
draft resolution on transport policy is achieving maximum mobility in Slovenia.
The proposed policy has been tailored to allow effective, stable, safe and cheap transport of
goods and people in Slovenia. The measures also promote sustainable growth of the sector,
Bozic said at a debate on Wednesday, 8 March.
According to him, the end result should be a system whereby Slovenia would see a reduction
in the negative impact of transport on the environment and people, he said.
Meanwhile, deputy of the opposition Liberal Democrats (LDS) Marko Pavliha criticised the
draft resolution for being overly vague and lacking ambition.
Pavliha, a former transport minister, said the government should withdraw the resolution and
improve it before coming back to parliament.
Moreover, he claimed the document pays too little attention to environmental protection and
public health, and that experts are critical of the strategy, too.
Pavliha's criticism about vagueness was echoed by Robert Sever of the Transport Association
at the Chamber of Commerce and Industry of Slovenia (CCIS).
Sever said that the association agrees with most of what is in the document but believes that
the strategy needs to have concrete provisions that include deadlines.
Slovenian Tourist Board Optimistic about 2006
The figures for January showed a 5% increase in the number of guests and overnight stays
24
The Slovenian Tourist Board (STO), which organised the promotion of Slovenian tourism at
the 40th International Tourism Exchange (ITB) in Berlin, says that positive trends at the
beginning of this year made it optimistic about this season despite last year's fall in the
number of guests from Germany and Austria.
As STO director Barbara Guncar told STA on Wednesday, 8 March, the figures for January
showed a 5% increase in the number of guests and overnight stays.
Head of the STO office in Germany Janez Repansek also cautiously predicted that this year's
results would be better than last year's as the number of Slovenian holidays being sold to the
largest German agents was on the rise.
How much better the results will be would depend on factors such as the bird flu, which may
yet cause panic in Europe, and the effects of bad weather. Last Summer's bad weather caused
a large fall in the number of campers in Slovenia. They normally represent 20% of German
guests in Slovenia.
A fall in the number of German visitors to Slovenia last year was also provoked by the poor
economic situation in Germany and high unemployment rates, but according to predictions by
German tourism workers these should improve this year.
Repansek warned that the Football World Cup in Germany between 9 June and 9 July would
also have a strong negative effect on the flow of German tourists. Current estimates numbered
German tourism losses due to the World Cup at around EUR 600m.
The Germans, being great football enthusiasts, would prefer to stay at home and watch
football on TV. However, German tourism representatives are doing their best to calm fears
and emphasise the positive effect of the World Cup on tourism in Germany.
Slovenia, bordered by Austria and Switzerland at the ITB, is presenting all it has to offer with
an emphasis on historical towns, spas, natural parks and possibilities for walking and cycling.
Walking, cycling and the Slovenian mountains have a privileged position as they are the
preferred interests of German tourists.
With other countries offering similar things Slovenia's advantages are its regional
particularities, its easy accessibility and quality, said Guncar. However, investment was still
proving a problem, but Guncar believes the new government tourism programme would
provide the necessary environment to encourage it.
The STO is concentrating on improving links with business partners at this year's ITB, getting
to know the competition and current tourist trends. Nearly 50 representatives from 30 tourist
companies are being promoted at the STO-sponsored stand.
However not everything Slovenian tourism has to offer is gathered "under one roof". The
Skocjanske jame caves and the town of Ljutomer for example chose to appear separately from
the STO. They believe this makes them more noticeable.
Slovenia Will Meet Kyoto Obligations, Minister Says
Speaking on the margins of a meeting of EU environment ministers in Brussels, Minister
Podobnik said Slovenia would implement additional measures and use carbon sequestration
in forests
Environment Minister Janez Podobnik has pledged that Slovenia will meet its obligations
stemming from the Kyoto Protocol in the 2008-2012 period.
Speaking on the margins of a meeting of EU environment ministers in Brussels on Thursday,
9 March, Podobnik said Slovenia would implement additional measures and use carbon
sequestration in forests.
His comments come in response to a warning from the European Commission that Slovenia
was lagging behind targets and may not meet its goals.
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Podobnik said that the Commission's findings, published in mid-February, are not entirely
correct and that he informed European Environment Commissioner Stavros Dimas of this fact
at the meeting.
The Slovenian minister said that he told Dimas that the Commission had failed to take into
consideration all the facts, which the commissioner promised would be fixed.
EU environment ministers also touched on post-Kyoto measures, with Podobnik calling for
equal treatment of all member states.
"Slovenia is currently in an unequal position as it is not part of the joint strategy for lowering
emissions that was adopted...in 2002 by the EU-15," he pointed out.
Moreover, the debate also examined genetically modified organisms and tests of their safety
for distribution on the market.
Podobnik said that the member states should cooperate in analysis and said Slovenia would
host a meeting of scientific committees from the member states that are in charge of
approving GMOs.
Meanwhile, Podobnik said that Slovenia supports the draft strategy on reducing air pollution.
According to him, Slovenia will help in the drafting of a new umbrella directive in the field in
a bid to alleviate the negative consequences of air pollution on people and the environment.
Motorway Construction Shifts into Overdrive This Year
The 2006 construction plan of the Motorway Company (DARS) is the most ambitious so far,
as SIT 170.6bn (EUR 712m) is to be used for motorway construction and maintenance this
year
The 2006 construction plan of the Motorway Company (DARS) is the most ambitious so far,
as SIT 170.6bn (EUR 712m) is to be used for motorway construction and maintenance this
year, up 38% over the year before.
Construction works will be underway on 174 kilometres of motorway, with sections in the
total length of 22.3 km scheduled for opening this year. Meanwhile, construction will start on
new sections totalling about 47.5 km, DARS told the press on Thursday, 9 March.
The shift into overdrive has been made possible by the government's decision to let DARS
take on more debt in order to finance construction and maintenance. "The share of loans and
debt will increase and the share of budget funds decrease, with the latter partially replaced by
EU cohesion funds," said DARS chairman Rajko Sirocic.
According to him, the company is ready for the altered funding structure, yet this can be
sustainable only if the amount of collected toll increases. Sirocic said DARS had established a
working group tasked with the project of electronic tolling.
The programme for this year envisages budget funds of SIT 5.9bn (EUR 24.6m), cohesion
funds to the tune of SIT 2bn (EUR 8.3m), the drawing of previously agreed bank loans at SIT
40.3bn (EUR 168.2m) and fresh bond issues worth 86.55bn (EUR 361.2m).
The rest of the money will come from licence fees (SIT 20bn/EUR 83.5m) and a VAT refund
(SIT 15.2bn/EUR 63.4m).
Since the current motorway construction project began in 1994, DARS has signed contract or
issued bonds worth EUR 1.93bn, of which it has actually used EUR 1.59bn. At the end of last
year its debt stood at EUR 1.5bn.
DARS collected toll in the amount of SIT 33.4bn (EUR 139.4m) last year. which represents
the bulk of the net sales revenues at SIT 40bn (EUR 167m). Net profit topped SIT 1.26bn
(EUR 5.3m) this year.
Slovenia Ahead of EU Average in Mobile Phone Use
According to data from 2004, 93.7 out of 100 Slovenians used a mobile phone, which was
above the 89.6 per 100 average in the EU
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Slovenia is ahead of the EU average in terms of the number of mobile phones users, the latest
statistics from Eurostat show. According to data from 2004, 93.7 out of 100 Slovenians used a
mobile phone, which was above the 89.6 per 100 average in the EU.
Moreover, Slovenia even outstrips the EU-15, where on average 92.5 out of 100 people used a
mobile phone in 2004.
According to Eurostat, 1,849,000 Slovenians were users of mobile phone services in 2004,
which is a whopping 4,500% more than in 1996.
Leading the EU in terms of mobile phone users is Luxembourg, where there are 143 users per
100 people, meaning that some people have two subscriptions.
Meanwhile, Portugal was at the bottom of the list, with 60.5 mobile phone users per 100
people.
However, in fixed line telephony, Slovenia trails the EU average of 49.6 lines per 100 people,
as it has 43 lines per 100 people.
Meanwhile, 47% of Slovenian households had an Internet connection in 2004, which is 4
percentage points above the EU average.
First Technology Platform Established in Slovenia
"Fotonika 21" was established in Ljubljana in what is the first technology platform in the
country intended for the development of alternative technologies and products in photonics
industry
"Fotonika 21" was established in Ljubljana on Friday, 10 March in what is the first
technology platform in the country intended for the development of alternative technologies
and products in photonics industry.
"Slovenia is very successful in the photonics industry, even on the international level," Martin
Copic of the Ljubljana Faculty of Mathematics and Physics said at the founding conference.
Good results can be expected in this field in the future, therefore this niche market must be
used, Copic said. He believes that the platform will give Slovenia a chance to try out risky
ideas.
Copic also said that the faculty would cooperate in joint European projects through young
researchers, and that they already participate in numerous projects in the optoelectronics
industry.
As Janez Renko of Electrical and Electronic Engineering Association at the Chamber of
Commerce and Industry of Slovenia (CCIS) told STA, the platform represents a bond
between development and research, with a goal to find new long-term opportunities.
The platform, established by different companies and research institutes, will focus on the
fields of laser technology, optoelectronics, medical devices, communication technology,
contemporary electro-optics, quantum electronics and new materials, Renko explained.
For Slovenia to remain competitive, new parallel technologies must be developed, Renko
stressed, adding that they plan to draw funds from the state budget and partly also from the
European structural funds.
Photonics is one of the most successful fields in the European and global industry, the CCIS
believes. In line with this, European technology platform "Photonics 21" has been founded.
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COMPANIES
Maos Bent on Iskra Takeover
The company Maos has raised its takeover bid for electronics conglomerate Iskra yet again
after major Iskra shareholders rejected the previous offer as inadequate
The company Maos has raised its takeover bid for electronics conglomerate Iskra yet again
after major Iskra shareholders rejected the previous offer as inadequate.
In line with the new bid published on Monday, 6 March and valid until 20 March, Maos is
offering SIT 1,400 (EUR 5.84) per Iskra share, SIT 88 (EUR 0.37) more than in the previous
offer.
The bid for the takeover of Iskra was launched in mid-December by Iskra Avtoelektrika, a
maker of car electronics, which offered SIT 1,044 (EUR 4.36) per share.
Iskra managers opposed the hostile bid and formed the company Maos with the intention of
staging a management buyout, offering SIT 1,100 (EUR 5.59) per share.
Iskra Avtoelektrika dropped out of the race after a final bid of SIT 1,110 (EUR 4.63), but
Maos seems determined to stay in the race, as it has continue to raise its offer.
The previous Maos offer was rejected by the largest shareholders, the state-run Restitution
Fund (SOD) and Pension Management Fund (KAD). They own 28% and 13% of Iskra
respectively.
The latest bid values Iskra at SIT 9.47bn (EUR 39.5m). Iskra posted a net profit of SIT 302m
(EUR 1.26m) in 2004, on sales of SIT 22.9bn (EUR 95.59m).
Titus International Becomes Majority Owner of Lama
British company Titus International has acquired 10,189 shares in the Slovenian company
Lama Dekani following a takeover bid published in January
British company Titus International has acquired 10,189 shares in the Slovenian company
Lama Dekani following a takeover bid published in January. Together with the 1,330,918
shares it already acquired, Titus now owns 1,341,107 shares or 79.01% of Lama, Titus
reported on Thursday, 9 March.
The world's leading manufacturer of fasteners and accessories for the furniture industry, Titus
International bought 78.41% of Lama shares from the bank Banka Koper last December,
paying EUR 1.515 per share.
In the public takeover bid published in January, however, Titus offered EUR 1.516 per share
for the remainder of Lama's shares.
As Titus admitted unofficially, the bid was a success and the go-ahead for ownership was
given them by the Office for the Protection of Competition on 20 February.
Lama, whose management agreed with the takeover, employs 425 workers and produces
fittings, tools and automation systems. It exports over 80% of its products, mainly to the US,
Germany, Italy, Spain and France.
According to unaudited results, Lama's revenues amounted to just over SIT 6bn (EUR 25m)
in 2004. The company made an operating profit at SIT 106m (EUR 442,441).
Pfizer Withdraws Lawsuit against Krka over Yasnal Drug
The Ljubljana District Court notified the Slovenian pharmaceutical company Krka that the
US pharma company Pfizer has withdrawn its 2002 suit over the sale of Yasnal medicine
The Ljubljana District Court notified the Slovenian pharmaceutical company Krka on
Tuesday, 7 March, that the US pharma company Pfizer has withdrawn its 2002 suit over the
sale of Yasnal medicine.
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The SIT 10m (EUR 41,700) action in which Pfizer accused Krka of unlawful competition
over acquiring a sales license for the drug was dropped at the end of February, Krka said in a
press release on Thursday, 9 March.
In its lawsuit Pfizer wanted to prevent the sale of two of Krka's generic drugs, Yasnal and
Atoris, modelled on Pfizer's Alzheimer disease drug Aricept and cholesterol-reducing
medicine Lipitor (Sortis), respectively.
The US giant claimed that its and Krka's drugs were not bioequivalent and would therefore
not produce the same results as the brand name product.
Chamber of Commerce and Industry of Slovenia Backs Establishment of Development
Fund
The aim of the fund, which is due to be set up by mid-April, is to ensure the necessary start-up
capital, thereby promoting economic growth and job creation in Slovenia
The management board of the Chamber of Commerce (CCIS) backed the establishment of a
development fund to help companies in drafting development projects and financing new
products, technologies and markets, the head of CCIS Jozko Cuk said on Tuesday, 7 March.
The aim of the fund, which is due to be set up by mid-April, is to ensure the necessary start-up
capital, thereby promoting economic growth and job creation in Slovenia, Cuk added.
Indeed, the fund could also make an important contribution to implementing the goals of
Slovenia's Development Strategy and the Lisbon Strategy, he explained.
The first fund of its kind in the country is to be established by the CCIS, which will also
provide the initial EUR 3.5m for its operations, explained CCIS board member Mateja Mesl.
However, as the fund would need some EUR 20m to become an important player, it will have
to look beyond CCIS membership fees for its funding, including European funds and publicprivate investment.
CCIS board members were unanimous in backing the fund as well as in calling the state to
take part in its establishment. The board moreover appointed a project group to help in setting
up the fund.
Spar Looking to Control 25% of Market
According to Mervic, the company saw its market share rise from 19.2% in 2004 to 21.7%
last year
Spar Slovenija, Slovenia's second-largest grocer, is looking to increase its market share to
25% in the coming years, its general manager Igor Mervic told the press on Thursday, 9
March.
According to Mervic, the company saw its market share rise from 19.2% in 2004 to 21.7%
last year. The goal now is to get to 25% and then defend that share, Mervic said.
He said that Spar was sitting tight in second place on the list of largest Slovenian retailers and
intends to stay there in the future.
According to him, Spar intends to open 11 new shops this year, including two megamarkets.
This will help it raise revenues from SIT 118bn (EUR 492.4m) in 2005 to an anticipated SIT
137bn (EUR 571.69m) this year.
Mervic also said that Spar was planning to open several shops in the northern Slovenian
region of Gorenjsko, where it controls by far the smallest market share of anywhere in the
country.
He said that its main rival, Mercator, holds 72% of the market in Gorenjsko, which has
prompted Spar to file a complaint with the Competition Protection Office.
Moreover, Mervic announced that the company intends to expand its Europark shopping
centre in Maribor (NE), while a new shopping centre in Celje (central Slovenia) will be
completed next week.
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Spar has spent EUR 44m on the centre in Celje, he said, adding that the company was
convinced there was plenty of room for bigger shopping centres in Slovenia.
Currently Slovenia has 74 sq. metres of shopping area per 1,000 people, which is well below
the European average of 159 sq. metres per 1,000, he said.
Meanwhile, Mervic also touched on double pricing and the euro changeover, saying that
prices are unlikely to rise at the time of the changeover due to the fierce competition among
retailers.
Acroni Boosts Profitability by Moving up the Value Chain
The company last year sold 270,000 tonnes of end-products for revenues of SIT 68bn (EUR
283.8m) and a profit of SIT 2bn (EUR 8.35m)
Steel maker Acroni has been steadily improving sales and profit figures by moving up the
value chain with hefty investments in technology. The company last year sold 270,000 tonnes
of end-products for revenues of SIT 68bn (EUR 283.8m) and a profit of SIT 2bn (EUR
8.35m), up from SIT 814m (EUR 3.4m) the year before.
Volume output is projected to remain the same this year, but the higher value added is
expected to edge sales up to SIT 69bn (EUR 288m), Acroni technical manager Branko Banko
has told STA.
The EU remains Acroni's main market, accounting for about half of the sales. Indeed, it is
Europe's third-largest maker of steel plates, whereby an EUR 17m investment over the
coming years is expected to raise output to the tune of 89% and make it the number two
maker of stainless steel in Europe.
Despite upbeat results and the fact that it is by far the biggest employer in the region with
1,400 employees, the company faces pressure from the local population, which is distrustful
of its environmental credentials.
Banko claims that the company is taking good care of the environment. For example, the
30,000 tonnes of slag that is produced annually is disposed of and used in road construction.
In particular, however, the local population is criticising Acroni for air and water pollution.
Banko counters by claiming that the current condition is a result of the fact that the erstwhile
nearly bankrupt company had not made any environmental investments before 2000.
According to him, measurements have shown that emissions are within limits, as numerous
adverse environmental impacts have been reduced after 2000 with investments totalling about
EUR 15m.
By 2010, when Acroni must complete a remidiation programme if it is to obtain the integrated
pollution prevention and control (IPPC) certificate, the company plans additional
environmental investments worth about EUR 17m. This will reduce atmospheric emissions as
well a releases into the river Sava. Banko said.
Banko underlined that eco-investments will be realised regardless of who the owner is, so
fears by the Gorenjsko Ecological Movement that they would stall if the company is
privatised are unfounded.
Acroni is still part of the state-owned Slovenian Steel Group. According to Banko they want a
potential new owner not only to invest in environmental technologies, but also in productivity
and quality improvements. "We don't want an owner who just wants to make as much profit
out of Acroni as possible," he stressed.
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SLOVENIA IN BRIEF
Social Partners Agree on Goals of Tax System
The social partners mainly agreed on the principles and the goals of the new taxation system,
however, were not able to come to terms on how best to achieve them, as they met for social
agreement talks on Monday, 6 March.
Intereuropa CFO Dismissed
The management board of logistics company Intereuropa has dismissed chief financial officer
Primoz Dolenc. Dolenc has been transferred to another post in the company and replaced by
Ales Markezic, Intereuropa's press release reads.
Transport Ministry Breaks Deadlock over Maribor Airport
The Ministry of Transport has decided to break the deadlock over the management of ground
facilities at Maribor Airport. Minister Janez Bozic announced in Maribor on Friday, 10 March
that the ministry would draw up a two-year management contract within a month, determining
a "realistic" licence fee for airport use. Aerodrom Maribor is owned by Prevent, a maker of
car seat covers and one of Slovenia's biggest exporters, which bought the bankrupted
company in 2002 for just over one million euros.
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