Slovenia Business Week no. 19, May 15th, 2006
Table of Contents:
HEADLINES ............................................................................................................................. 3
European Commission Upgrades Growth Forecasts for Slovenia ......................................... 3
D&B Says Slovenia Should Improve Productivity ................................................................ 3
KBC Decides to Reassess Role in NLB ................................................................................. 4
INTERNATIONAL COOPERATION ...................................................................................... 6
India Intends to Open Embassy in Ljubljana ......................................................................... 6
PM Says Bulgaria Should Join EU on 1 January 2007 .......................................................... 6
Drnovsek Receives New Indian, Bangladeshi Ambassadors ................................................. 7
Slovenia, Bulgaria Sign Memorandum on Economic Cooperation ....................................... 8
New Macedonian Ambassadors Welcomed by Drnovsek ..................................................... 8
Jansa: EU, Latin American Summit Valuable Experience .................................................... 8
FM Rupel Discusses Future of EU with British Minister ...................................................... 9
EUROPEAN UNION ............................................................................................................... 10
Liechtenstein and Slovenian FMs Discuss the EU and EEA ............................................... 10
Slovenian, Luxembourg Speakers Stress Unity on EU Issues ............................................. 10
LEGISLATION ........................................................................................................................ 11
Banks Call for Legislation on Euro Changeover ................................................................. 11
STATISTICS/FORECASTS .................................................................................................... 12
Central Bank Governor Warns Against Rushed Decisions .................................................. 12
Slovenia Satisfied with Commission's Growth Forecast ...................................................... 12
Industrial Output Up 9.9% Y/Y in March ............................................................................ 13
Trade Gap Increases in March ............................................................................................. 13
Slovenia Climbs in Global Competitiveness Rankings ........................................................ 13
Prices of Manufactured Goods Up by 0.3% in April ........................................................... 14
Foreign Debt at EUR 20.2bn in February ............................................................................ 14
Number of Families in Slovenia Rising but Their Size Smaller .......................................... 14
FINANCE................................................................................................................................. 16
Petrol Prices Soar to Record Highs ...................................................................................... 16
PM Briefed on Euro Preparations by Bajuk, Gaspari .......................................................... 16
Government Confirms Privatisation Plan for Slovenia's No2 Bank .................................... 16
Juncker: Slovenia Ready for Euro ........................................................................................ 17
KBC Announcement No Threat to NLB Operations, Bajuk Says ....................................... 17
Gaspari Expects Euro-Tolar Exchange Rate to Remain Stable ........................................... 18
Bajuk: Competitive Economy Requires Effective Capital Market ...................................... 18
NLB Supervisors Discuss KBC Decision to Limit Role in Bank ........................................ 19
Slovenia Considered Difficult for Foreign Investments ...................................................... 19
Slovenia Awaiting Decisive Euro-Readiness Reports ......................................................... 20
Ljubljana Stock Exchange .................................................................................................... 21
Foreign Exchange ................................................................................................................. 21
REGIONAL INFORMATION ................................................................................................ 22
Municipality Wants to Buy Airport, Plans Massive Logistics Hub ..................................... 22
BRANCH INFORMATION .................................................................................................... 23
Slovenian Tourism Ad Shown on CNN ............................................................................... 23
Economics Minister Promises More Support for Innovators ............................................... 23
Fixed-Line Number Portability Available ............................................................................ 23
Bird Flu to Cost Poultry Producer EUR 22m ....................................................................... 24
Minister Announces Overhauled E-Administration Portal .................................................. 24
Meeting Stresses Europe's Dependence on Foreign Energy Sources .................................. 24
Motorway Repairs to Causes Tailbacks in Summer Months ............................................... 25
COMPANIES ........................................................................................................................... 26
WAZ Enters Joint Venture with Dnevnik Owner DZS ........................................................ 26
Adria Airways Gets New Chief Executive .......................................................................... 26
Petrol Shareholders to Get EUR 4.17 per Share .................................................................. 27
Media Group Dnevnik Increases Revenues by EUR 1.62m in 2005 ................................... 27
Fuel Trader Petrol Reports Rise in Q1 Revenues, Profit ..................................................... 28
Delo Editor-in-Chief Appoints Two New Editors ............................................................... 28
FAIRS, CONGRESSES ........................................................................................................... 29
Internautica Showcases over 200 New Boats....................................................................... 29
Iskra Avtoelektrika Ups Profit to EUR 1m in Q1 ................................................................ 29
Government Adopts Privatisation Plan for Telco ................................................................ 29
Gorenje Q1 Results in Line with Plans ................................................................................ 30
SLOVENIA IN BRIEF ............................................................................................................ 31
PM's Economic College Discusses Two More Privatisation Plans...................................... 31
Funding of Valvasor-Chevening Scholarships Extended..................................................... 31
Slovenian Delegation Takes Part in 114th IPU Assembly ................................................... 31
Minister Calls for Standardisation of Security Equipment in EU ........................................ 31
Cabinet Confirms EU-Compatible Changes to Aviation Act .............................................. 31
Slovenian Cinema to Be Promoted at Stand no. 103 ........................................................... 31
2
HEADLINES
European Commission Upgrades Growth Forecasts for Slovenia
The European Commission has upgraded its 2006 economic growth forecast for Slovenia by
0.3 percentage points to 4.3% in its spring report on economic outlook in the EU
The European Commission has upgraded its 2006 economic growth forecast for Slovenia by
0.3 percentage points to 4.3% in its spring report on economic outlook in the EU.
The Commission also lowered the anticipated inflation rate in Slovenia for this year to 2.4%
from 2.5% in its autumn report, backing its decision by saying that inflation-busting measures
are progressing well in Slovenia.
The report leaves the outlook in Slovenia for 2007 almost unchanged compared to the autumn
report: economic growth is expected to stand at 4.1%, while inflation is anticipated at 2.5%.
Slovenian growth is a fair way above the 2.3% average growth rate anticipated for the EU this
year. Meanwhile, Slovenia's inflation forecast is only a touch above the 2.1% expected in the
EU this year.
According to the Commission, the double pricing mechanisms in place in Slovenia should
ensure a limited impact on prices of the planned euro changeover.
The report, released just over a week before the Commission releases a report on Slovenia's
readiness for the euro, adds that the current government policies and exchange rate stability
are thwarting inflationary pressures.
Slovenia is well on the way to meeting other eurozone membership criteria as well: the budget
deficit is set to stand at 1.9% this year and 1.6% next year (limit is 3%), while the general
government debt is to remain below 30% in both years (limit is 60%), according to the report.
However, European Commissioner for Economic and Monetary Affairs Joaquin Almunia did
not wish to speculate about the contents of the convergence report for Slovenia.
Among the risks that could threaten Slovenia's steady inflation rate, the Commissions points
to the price of energy, foremost fuel and electricity.
According to the report, economic growth in Slovenia will be fuelled by domestic spending,
while exports are slated to have a smaller positive impact than in 2005.
D&B Says Slovenia Should Improve Productivity
International rating firm Dun & Bradstreet is upbeat about Slovenia's outlook in its latest
country report
International rating firm Dun & Bradstreet is upbeat about Slovenia's outlook in its latest
country report. But it points out that Slovenia needs to raise productivity by improving
incentives to work, enhancing labour market flexibility, improving the regulatory
environment and reducing the cost of doing business.
Productivity growth is one area in which Slovenia has been falling behind its regional
competitors; labour utilisation rates have declined relative to the EU average over the past
decade and high marginal effective tax rates discourage work, the report reads.
D&B also notes the report of the latest International Monetary Fund (IMF) mission to
Slovenia. It says that although in the past the IMF has been somewhat critical of what it has
seen as the relatively slow pace of reform in Slovenia, the latest findings acknowledge the
strength of the economy and its ability to withstand the energy price shocks of the past two
years.
Nevertheless, certain risks remain. Most notably, the country will remain vulnerable to
persistent increases in unit labour costs that could lead to an erosion of competitiveness within
the EMU after the adoption of the euro, planned for 2007.
3
Euro adoption will virtually eliminate exchange rate risk, but the banking sector is likely to
become increasingly vulnerable to market risk. As EU interest rates rise, the quality of loans
could be affected. This will provide a challenge for banking supervision going forward.
The rating firm meanwhile disagrees with the IMF's recommendation for a deficit ceiling of
1.0% of GDP in '06, with the aim of achieving balance by 2009. It argues that fears of
incipient overheating are overstated.
Notwithstanding the potential risks, D&B keeps Slovenia firmly on top in Eastern Europe,
with a rating of DB2c and a growth sign.
KBC Decides to Reassess Role in NLB
Belgian banking and insurance group KBC has announced it would "reassess its investment"
in Slovenia's largest bank, NLB
Belgian banking and insurance group KBC has announced it would "reassess its investment"
in Slovenia's largest bank, NLB. Unhappy with its inability to become a majority shareholder,
the KBC said it would "limit its responsibility...to that of a pure financial investor".
The Belgian group made its announcement on Wednesday, 10 May, after months of talks with
the Slovenian government on the future ownership structure in NLB.
"Over the past few months, NLB's shareholders have been discussing and negotiating the
long-term plans for NLB Bank and KBC's role in its future. Although progress has been
made, major differences of opinion amongst the shareholders remain," KBC said.
According to the Belgian firm, which owns 34% of NLB, its inability to convince the
government to let it increase its stake to a majority stake has prompted it to review its role in
the NLB.
"As a minority shareholder, KBC feels it would lack sufficient influence to bring NLB's
performance into line with the European average. Nor would it be able to bring the
international development of NLB in the Balkans sufficiently up to cruising speed."
KBC spokesperson Viviane Huybrecht stressed that the announcement means that KBC no
longer intends to take part in the operative management of NLB.
According to her, the Belgian group intends to recall its representatives in the NKB
management, although it would keep its representatives on the supervisory board.
Moreover, she said KBC would not be taking part in or giving its backing to any future capital
increases.
Responding to the announcement, Finance Minister Andrej Bajuk said that selling the bank to
a foreigner would greatly limit Slovenia's leverage over its financial market.
According to Bajuk, EU regulations demand of Slovenia that it ensure stability of its financial
sector, which is why Slovenia does not want to lose an important instrument of influence on
the sector.
Bajuk explained that KBC representatives wanted to reach a deal with the government that
would allow the Belgian firm to become a majority stakeholder in NLB over three years. The
Finance Ministry did not agree with this plan, Bajuk said.
He said that time was not the issue in allowing KBC to acquire a majority stake but rather
Slovenia's responsibility to uphold the EU regulations and ensuring that its financial system
was stable.
Bajuk explained that another sticking point was Slovenia's system of insuring deposits of
individual banks. Slovenian legislation, he said, sets down that depositors in a defunct bank be
repaid from a fund financed by other banks - if the NLB were to go bankrupt, it would lead to
huge problems on the Slovenian banking market.
Meanwhile, KBC stressed it was not changing its strategy of making Central and Eastern
Europe its second home market. "Going forward, KBC will continue to explore and act on
opportunities for direct investment in the Balkan states," it added.
4
According to Huybrecht, the future steps of KBC in regard to its stake in NLB would depend
on how the Slovenian government responds. KBC is still ready to negotiate, she said, adding
that the bank would review the situation in the coming months.
The state is still the biggest shareholder of NLB, holding around 35% directly, as well as a
further 10% through the state run Restitution Fund (SOD) and Pension Fund Management
(KAD).
5
INTERNATIONAL COOPERATION
India Intends to Open Embassy in Ljubljana
The new Indian Ambassador in Budapest Ranjit Rae, who is also in charge of Slovenia, met
with Slovenian FM Dimitrij Rupel
India is planning to open a new embassy in Ljubljana, the new Indian Ambassador in
Budapest Ranjit Rae, who is also in charge of Slovenia, said when he handed over copies of
his credentials to Slovenian FM Dimitrij Rupel. Rupel also received the copies of credentials
from the new Macedonian Ambassador Samoil Josif Filipovski.
Rupel and Rae agreed at their meeting in Ljubljana on Wednesday, 10 May that this move
will improve the already very good relations between Slovenia and India, the Foreign
Ministry reported.
There is regular political dialogue between Slovenia and India which in Rupel's opinion has
acquired new dimensions with Slovenia's EU membership.
Trade is growing steadily, reaching US$ 81.3m in 2005, with exports numbering US$ 22.1m
and imports US$ 59.2m. The trade figures for 2006 are also encouraging.
Rupel and Rae also discussed the International Center for Promotion of Enterprises. This 19nation intergovernmental organisation based in Ljubljana unites countries from SE Europe,
SE Asia, the Middle East, Africa and Latin America.
India is one of its founders and the country which contributes most to its budget. Rupel and
Rae both agreed that the centre is a very useful institution, but it will be necessary to find
ways of giving it new impetus, the Foreign Ministry added.
At a meeting with the new Macedonian ambassador, Rupel stressed that Slovenia would like
to further improve good bilateral relations and help Macedonia on its way to EU and NATO.
Rupel also briefed the ambassador on the Centre for European Future, a Slovenian initiative
designed to help SE European countries in their bid to join the EU. Its inauguration on 23
May is to be attended also by Macedonian FM Ilinka Mitreva.
PM Says Bulgaria Should Join EU on 1 January 2007
On an official visit in Bulgaria, Slovenian PM Janez Jansa and his host, Bulgarian PM Sergei
Stanishev, called for stronger cooperation between the two countries, and shared the view
that Bulgaria will join the EU on 1 January 2007
On an official visit in Bulgaria, Slovenian PM Janez Jansa and his host, Bulgarian PM Sergei
Stanishev, called for stronger cooperation between the two countries, and shared the view that
Bulgaria will join the EU on 1 January 2007.
It is important for the date of Bulgaria's EU entry to remain 1 January 2007 so as to encourage
it to pursue reforms needed for the EU, Jansa said at a press conference in Sofia on
Wednesday, 10 May.
"Slovenia is aware that certain problems cannot be resolved overnight," he said, and added
that Bulgaria has already started tackling several issues, most notably corruption and the
reform of the justice system.
The visit of the prime minister, who was accompanied by Economic Affairs Minister Andrej
Vizjak and a strong business delegation, will in Jansa's words bring not only political, but
mainly economic results.
A business forum was opened by the two prime ministers on the sidelines of the visit, which
is seen as an opportunity for companies to forge direct ties and possibly agree on concrete
deals.
6
Moreover, Vizjak and Bulgarian Deputy Minister of Economy and Energy Kornelia Ninova
signed a memorandum of cooperation between the two ministries for economic affairs.
Meanwhile, Slovenian Ambassador to Bulgaria Andrej Gerencer and Bulgarian Deputy FM
Ljubomir Kyuchukov signed a programme of bilateral cooperation in science, education and
culture for the 2006-2008 period.
Stenishev praised Slovenia and its achievements in the EU and stressed that the Bulgarian
government would look to advance bilateral economic ties. He thanked Jansa for the support
Slovenia was giving Bulgaria in its bid to join the EU.
According to him, this visit is extremely important as it marks a new era in BulgarianSlovenian relations.
Jansa agreed with Stenishev that relations were excellent and free of open issues. He believes
that the memorandum signed by the two economics ministers is a good basis for strengthening
economic ties.
Jansa reiterated the importance Slovenian places on the integration of the Balkans in the EU
even beyond the next round of enlargement that will encompass Bulgaria. He stressed that the
country would make that one of the priorities of its stint as EU president in the first half of
2008.
The Slovenian prime minister also used the occasion to outline the planned reforms in
Slovenia.
Drnovsek Receives New Indian, Bangladeshi Ambassadors
The talks Drnovsek held separately with the two diplomats focused on bilateral relations and
the latest developments in Asia
President Janez Drnovsek received on Wednesday, 10 May the new Indian and Bangladeshi
ambassadors to Slovenia, Ranjit Rae and A.B. Manjoor Rahim, who handed him their
credentials. The talks Drnovsek held separately with the two diplomats focused on bilateral
relations and the latest developments in Asia.
According to Drnovsek's office, the president stressed in his meeting with Rae that the two
countries should bolster relations in all fields, particularly business and culture.
Meanwhile, the Indian ambassador outlined current affairs in India and his country's efforts in
the field of cultural diversity.
Drnovsek and Rae exchanged views on the balance between globalisation on one hand and
human rights and environmental protection on the other. They agreed that human
development cannot be overlooked in favour of material development.
Rae, who is responsible for Slovenia from his seat in Budapest, told Slovenian Foreign
Minister Dimitrij Rupel earlier in the day that India intended to open an embassy in Ljubljana.
Rupel and Rae agreed that this move would improve the already very good relations between
Slovenia and India, the Foreign Ministry reported.
Meanwhile, the Bangladeshi ambassador informed Drnovsek of the latest business
developments in his country.
Drnovsek and Manjoor Rahim touched on environmental protection, concluding that Asia has
been hardest hit by global environmental problems.
Moreover, the pair exchanged views on inter-religious dialogue, with the Bangladeshi
diplomat pointing to the cooperation between the main religions in his country.
Drnovsek praised the role played by Bangladesh in the UN, saying that the country was an
important contributor to international peace-keeping operations.
7
Slovenia, Bulgaria Sign Memorandum on Economic Cooperation
The memorandum will allow the formation of a Slovenian-Bulgarian commission tasked with
seeking out new opportunities and upgrading the existing economic cooperation between the
two countries
Minister of Economics Andrej Vizjak and the deputy Bulgarian Minister of Economics
Kornelia Ninova signed in Sofia on Wednesday, 10 May a memorandum of cooperation
between the two ministries.
The memorandum will allow the formation of a Slovenian-Bulgarian commission tasked with
seeking out new opportunities and upgrading the existing economic cooperation between the
two countries, Vizjak said.
Talks between the pair were also aimed at problems faced by Slovenian companies in
Bulgaria, namely with power delivery, treatment of products by pharma company Krka and
problems with business insurance policies, according to Vizjak.
Vizjak, who visited Bulgaria alongside Prime Minister Janez Jansa and representatives of over
50 Slovenian companies, also attended a Slovenian-Bulgarian business forum, jointly opened
by Jansa and his Bulgarian counterpart Sergei Stanishev.
According to data by the Chamber of Commerce and Industry of Slovenia, trade between the
countries totalled EUR 131.2m in 2005, with Slovenian exports reaching EUR 86.3m.
Slovenia mainly exports drugs, paper and cardboard, and imports oil derivatives, machinery
parts and engines.
Slovenia's largest exporters are home appliance group Gorenje and pharma companies Lek
and Krka, while the importers include fuel trader OMW Slovenija and hardware retailer
Merkur.
New Macedonian Ambassadors Welcomed by Drnovsek
The two officials concluded that their countries enjoyed excellent relations and that dialogue
was constant between them, the president's office said in a press release
The new Macedonian Ambassador to Slovenia Samoil Filipovski was welcomed to the
country by President Janez Drnovsek in a meeting on Wednesday, 10 May that saw the
Macedonian diplomat deliver his credentials to the Slovenian president.
The two officials concluded that their countries enjoyed excellent relations and that dialogue
was constant between them, the president's office said in a press release.
Filipovski used the meeting to outline Macedonia's efforts to join the EU, in response to
which Drnovsek reiterated Slovenia's support for Macedonia's bid.
According to Filipovski, the top issue on the agenda of his tenure in Slovenia will be
bolstering economic ties. Drnovsek stressed that there was room for improvement in business
relations.
The pair also spoke about cultural cooperation and the latest developments in the respective
countries.
Filipovski was received earlier in the day by Foreign Minister Dimitrij Rupel.
Jansa: EU, Latin American Summit Valuable Experience
PM Janez Jansa said that participating at the EU, Latin American and Caribbean countries
summit was a valuable experience considering that the next such meeting, presumably hosted
by Peru at the beginning of 2008, will take place with Slovenia as EU president
PM Janez Jansa said that participating at the EU, Latin American and Caribbean countries
summit was a valuable experience considering that the next such meeting, presumably hosted
by Peru at the beginning of 2008, will take place with Slovenia as EU president.
8
He explained in Vienna on Friday, 12 May that while the technical and organisational aspects
of such meetings were indeed the responsibility of the host state, Slovenia would have to take
care of the summit's agenda, which is an equally demanding task.
On the margins of the summit, which is bringing together the 25 EU member states and 33
Latin American and Caribbean countries, Jansa also met Mexican President Vicente Fox with
whom he tackled "two very concrete issues", namely the agreements on the protection of
investments and on economic and scientific cooperation.
The Slovenia PM expects the agreements to be signed shortly and significantly strengthen
economic cooperation between the two countries.
Jansa was also one of the introductory speakers at today's plenary session. He took the
opportunity to call for a fair approach to globalisation, arguing that developed countries had
not only the responsibility of contributing development aid but also to open their markets to
products from Latin American states, including agriculture.
According to Jansa, the two-day summit is focusing on the challenge of how to distribute
wealth in a way that would prevent the rise of poverty in Latin America, which has been
experiencing this trend despite relatively high economic growth.
Foreign Minister Dimitrij Rupel meanwhile said that the summit presents a successful
exchange of opinions with interesting and exciting topics, yet without a large number of
practical results or working material, characteristic of foreign ministers.
FM Rupel Discusses Future of EU with British Minister
Foreign Minister Dimitrij Rupel has met British Minister for Europe Geoff Hoon to discuss
the future of the EU
Foreign Minister Dimitrij Rupel has met British Minister for Europe Geoff Hoon to discuss
the future of the EU on Friday, 12 May.
At the meeting held on the sidelines of the EU-Latin America summit in Vienna, Rupel and
Hoon examined the EU constitution and other topical issues related to the bloc, the Foreign
Ministry said.
Rupel also used the meeting to outline to the new British minister for Europe the priorities
Slovenia is setting itself for its stint as EU president in the first half of 2008.
Meanwhile, Rupel also met Columbian counterpart Carolina Barca Isakson. The pair's talks
touched on the relations between the EU and Latin America, the press release from the
ministry added.
Rupel acquainted the Columbian official with the Slovenian-run International Trust Fund for
Demining and Mine Victims Assistance (ITF).
Barca Isakson was said to be particularly interested in ITF's programme of mine victims
assistance, due to the large number of mine accident casualties in Columbia.
Rupel had been taking part in the two-day summit together with Slovenian Prime Minister
Janez Jansa.
9
EUROPEAN UNION
Liechtenstein and Slovenian FMs Discuss the EU and EEA
Liechtenstein's Foreign Minister Rita Kieber-Beck and her counterpart Dimitrij Rupel
discussed the future of the EU and the European Economic Area (EEA)
Liechtenstein's Foreign Minister Rita Kieber-Beck and her counterpart Dimitrij Rupel
discussed on Tuesday, 9 May the future of the EU and the European Economic Area (EEA).
Speaking at a press conference, both ministers shared a view that the two countries are allies
in numerous issues, and labelled bilateral relations as excellent.
Rupel pointed out that Liechtenstein as a member of the EEA supports new members of the
EU, and that Slovenia is thus to receive from Vaduz around EUR 6m through projects within
the EEA.
Touching on Slovenia's entry into the Schengen zone and its euro adoption, scheduled for
2007, Rupel said that the former could be interesting for Liechtenstein, as Switzerland has
also shown interest in the Schengen zone.
He moreover stressed that experiences of Liechtenstein as a small country, especially with the
openness of markets, are interesting for Slovenia.
Slovenian, Luxembourg Speakers Stress Unity on EU Issues
Luxembourg Parliament Speaker Lucien Weiler visited Slovenia
Luxembourg Parliament Speaker Lucien Weiler said on Wednesday, 10 May that the "love
story" between Slovenia and Luxembourg is still continuing, as also shown by the practically
identical positions of both countries on EU issues.
Speaker France Cukjati added that Weiler's visit to Slovenia is especially welcome in the light
of Slovenia's preparations for its stint as EU chair in the first half of 2008, as Luxembourg has
so far presided over the bloc 11 times.
Besides stressing the good relations, Weiler also offered Luxembourg's help to Slovenia
during its presidency, adding that such a feat is much more challenging for small states than
the big ones.
Weiler stressed the lack of suitable personnel, which often needs improvising, adding that
Luxembourg set up a special administration to deal solely with EU chairing. He believes that
sometimes such an approach yielded better results than in larger states with more staff.
Weiler and Cukjati moreover discussed other topical EU-related issues, namely the European
constitution, EU enlargement and free flow of labour.
The positions of both countries on these issues are practically identical, "maybe because both
countries are small and have encountered similar problems in striving to implement their
goals in the EU", Cukjati said.
10
LEGISLATION
Banks Call for Legislation on Euro Changeover
The Association of Slovenian Banks and the banks have jointly called on the parliament to
pass key legislation on the euro changeover as soon as possible, to allow banks sufficient time
to plan ahead prior to the euro switch, scheduled for January 2007
The Association of Slovenian Banks and the banks have jointly called on the parliament to
pass key legislation on the euro changeover as soon as possible, to allow banks sufficient time
to plan ahead prior to the euro switch, scheduled for January 2007.
As such legislation has not yet been passed, banks are having problems in planning their
operations, the association wrote in a press release on Wednesday, 10 May.
The rest of the legislation which could indirectly influence the preparations for the euro
switch in banks should also be passed as soon as possible, the association added.
The association is mainly worried of possible changes to tax legislation, which as well-placed
sources suggest could be changed in the second half of 2006.
Such changes could have a devastating impact on the stability of bank IT systems, which are
currently in the last phase of testing.
The association has therefore called on legislators to refrain from passing any legislation
changes after the IT systems have been fully prepared for the euro.
Should legislation nevertheless be changed, the banks will refrain from all changes to their IT
systems so as to ensure their stable operation during the euro changeover.
11
STATISTICS/FORECASTS
Central Bank Governor Warns Against Rushed Decisions
The bank forecasts economic growth of 4.2% for this and the next year
Central bank governor Mitja Gaspari has said that positive economic trends in Slovenia are
continuing, but that this cannot be taken for granted in the future, as he presented the bank's
monetary report for Slovenia. The bank forecasts economic growth of 4.2% for this and the
next year.
Gaspari told the press in Ljubljana on Monday, 8 May that the Bank of Slovenia's half-yearly
report finds positive movements in the monetary, financial and business fields.
The central bank is expecting solid economic growth to persist through 2008, when the rate of
expansion is expected to stand at 3.9%.
Meanwhile, inflation forecasts are on par with those from other institutions, standing at a little
over 2%, head of the bank's analytical department Damjan Kozamernik said.
Kozamernik explained that domestic spending would have increasing importance for
Slovenian economic growth in the next three years.
The European Commission issued a report for Slovenia on 8 May, in which it forecasts a
2.4% inflation rate for this year.
According to Kozamernik, prices of raw materials, particularly fuel, present the only real
short-term danger to the economic growth forecasts.
Meanwhile, Gaspari said that the policy of administered prices and consumer spending had
the most direct impact on inflation. For this reason he lambasted announcements of an
imminent hike in electricity prices.
Claims that electricity in Slovenia is much cheaper than in Europe are completely out of line,
he said, adding that electricity in Slovenia is only around 15% cheaper than the average price
of electricity in Europe.
Gaspari stressed that the positive trends indicate that for future success Slovenia should
continue to lead proven economic policies.
He said that it was of utmost importance for Slovenia to make sure that it did not ruin the
good work with poorly thought-out decisions. This means that the proposed reform package
needs to be designed and implemented with the utmost of sensitivity, he added.
Moreover, Gaspari said he expected that the final euro-tolar exchange rate would be
approximately the same as the parity rate of SIT 239.64 for one euro set when Slovenia joined
the ERM II mechanism nearly two years ago.
Slovenia Satisfied with Commission's Growth Forecast
Finance Minister Andrej Bajuk has assessed that the economic growth forecasts for both the
EU and Slovenia by the European Commission confirm a favourable economic environment
for this year
Finance Minister Andrej Bajuk has assessed that the economic growth forecasts for both the
EU and Slovenia published on Monday, 8 May by the European Commission confirm a
favourable economic environment for this year.
According to Bajuk, the forecast proves the Slovenian government was successful in securing
macroeconomic stability and the sustainability of public finances.
He added that that this was increasing the competitiveness of the economic environment and
bringing Slovenia closer to the most developed economies in the EU.
12
The Bank of Slovenia, on the other hand, has noted that "economic forecasts by the European
Commission are fairly similar to the Bank of Slovenia's, which confirms the stability of
current macroeconomic trends and a sustainability of the reached inflation level".
The European Commission has upgraded its 2006 economic growth forecast for Slovenia by
0.3 percentage points to 4.3% in its spring report on economic outlook in the EU.
Industrial Output Up 9.9% Y/Y in March
Slovenia's industrial output rose by 16% in March over the month before
Slovenia's industrial output rose by 16% in March over the month before and increased 9.9%
year-on-year, according to the latest report by the National Statistical Office.
Compared with February, inventories increased by 0.6% and went up by 3.4% in comparison
with March 2005.
Year-on-year, output in manufacturing was up by 10.9%, while volumes in electricity, gas and
water supplies were up 3.1%. Mining output went down by 3.3%.
Trade Gap Increases in March
Slovenia's exports totalled EUR 1.46bn in March, a 17.4% increase over the year before,
while imports stood at EUR 1.62bn, up 19.6% compared with March last year
Slovenia's exports totalled EUR 1.46bn in March, a 17.4% increase over the year before,
while imports stood at EUR 1.62bn, up 19.6% compared with March last year.
The country's trade gap stood at EUR 159.9m in March, up almost EUR 52m month-onmonth. This puts the export-import coverage at 90.1%, down 2 percentage points over the
month before, according to preliminary data from Slovenia's Statistical Office.
In the first quarter of this year, exports went up 18.9% to EUR 3.96bn compared with the
same period in 2005, while imports increased 18.1% to EUR 4.23bn, putting the exportimport coverage in the period at 93.4%.
In the first three months of 2006, Slovenia imported around EUR 3.31bn of goods from EU
countries, a 14.6% rise over the same period last year, while import from other countries
surged 32.7% to EUR 910.98m.
In the same period, Slovenia exported goods worth around EUR 2.79bn to EU members
(+18.8%), while EUR 1.16bn were exported to non-EU states (+19.2%).
Slovenia Climbs in Global Competitiveness Rankings
Slovenia has gained 7 spots on the latest competitiveness rankings of the International
Institute for Management Development (IMD)
Slovenia has gained 7 spots on the latest competitiveness rankings of the International
Institute for Management Development (IMD). It occupies the 45th place in the 2006 survey,
the same as in 2004.
According to the survey, which was released on Thursday, 11 May, the problems are largely
the same as last year: Slovenia lags behind in fiscal policies, foreign direct investment,
business legislation and business climate.
The situation has improved, however, in the fields of international trade, prices, public
finances and education, the report says.
The IMD believes that Slovenia's main challenges this year will be preparations for the
adoption of the euro in 2007 and the breakthrough of small and medium-sized enterprises on
foreign markets.
Other challenges include increasing labour market flexibility, supporting R&D projects and
undertaking income tax and VAT reform.
The rankings are compiled by the Swiss institute based on a survey among managers.
Slovenia entered the rankings at 40th in 1999, but gradually slid until the turnaround this year.
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According to the survey, the US remains the most competitive country in the world, followed
by Hong Kong, Singapore and Iceland. Denmark is the best-ranked EU country at 5th.
All EU newcomers bar Poland (58th) outperformed Slovenia this year, as Estonia is 20th, the
Czech Republic 31st, Slovakia 39th and Hungary 41st.
Prices of Manufactured Goods Up by 0.3% in April
In the first four months of this year producer prices increased by 1.2%
Producer prices of manufactured goods were up 0.3% in April compared with March and 2%
year-on-year. In the first four months of this year producer prices increased by 1.2%,
according to data from the Statistical Office.
Year-on-year the greatest price rise in April was in electricity and water supply, which went
up by 3.2%. Prices in mining were up 0.8%, manufacturing went up 1.5% and forestry by
0.3%.
From month to month, only forestry prices did not change while all other factory-gate prices
did rise. The greatest increase was in mining, were prices rose by 1.2%, manufacturing
increased by 0.3%, water and electricity supply by 0.2%.
Compared with April 2005, intermediate goods went up by 2.4% while consumer goods went
up 1.6%. Capital goods however fell in price by 0.5%.
Foreign Debt at EUR 20.2bn in February
Slovenian foreign exchange reserves totalled just over EUR 9bn at the end of February
Slovenian foreign exchange reserves totalled just over EUR 9bn at the end of February, EUR
11.1bn short of the overall foreign debt, which amounted to EUR 20.2bn, according to the
April Bulletin of the Bank of Slovenia.
The bulk of Slovenia's foreign exchange reserves, just under EUR 7bn, was made up of the
reserves of the central bank, while the remaining EUR 2bn belonged to commercial banks.
Long-term debt accounted for EUR 14.8bn, while short-term debt amounted to EUR 4.2bn,
and debt liabilities to affiliated enterprises and direct investors to EUR 1.2bn.
Number of Families in Slovenia Rising but Their Size Smaller
The most common type of family is a married couple with children and the average family
with children has 3.4 members
To mark the International Day of the Family, 15 May, the Statistical Office (SURS) has
reported that the number of families is on the rise in Slovenia, but they are getting smaller.
The most common type of family is a married couple with children and the average family
with children has 3.4 members.
SURS explains that in Slovenia large families are those with three or more children.
According to Eurostat, Slovenia belongs to the group of countries which have few large
families and the share of single-parent families is among the highest in Europe.
According to the latest the census in 2002, there are 556,000 families in Slovenia with an
average of 3.1 members. 87% of Slovenians live in families. 53% of families are still made up
of a married couple with children but their number is slowly falling.
There are more and more family groups in which the partners are not married, but do have
children - in 2002 there were 5.3% of these. Their number has grown the most since 1991.
Almost every fifth family in Slovenia is a one-parent family, 86% of which are mothers with
children. The number of such families has almost doubled since the census in 1981.
Almost half of adults in such families are older than 50. Children who do not set up their own
families often stay with their parents and look after them.
Large families having children younger than 18 (or 26 if they are still in education), receive
an annual "large family benefit", which in 2006 amounts to SIT 81,910 (EUR 342) according
14
to the Labour, Family and Social Affairs Ministry. In 2005, 24,962 families were entitled to
this benefit.
According to Eurostat, Slovenia is a country with few large families and can be compared
with the Baltic states and the Czech Republic, where the share is less than 10%. Poland and
Slovakia have almost twice as many large families as Slovenia but Ireland has the most.
15
FINANCE
Petrol Prices Soar to Record Highs
Prices of petrol hit record highs as Slovenian fuel retailers adjusted to surging crude prices
over the last month
Prices of petrol hit record highs on Tuesday, 9 May as Slovenian fuel retailers adjusted to
surging crude prices over the last month. A litre of regular unleaded went up by SIT 13.7 to
SIT 251.60 (EUR 1.05), while diesel fuel is SIT 11.40 dearer at SIT 240.50 (EUR 1.00) a
litre.
The prices were raised in line with the government petrol pricing model, which monitors
prices of crude oil over the last month and adjusts petrol prices accordingly.
The Iranian nuclear standoff and the start of the driving season in the Northern Hemisphere
continue to push global crude prices to record levels. Meanwhile, the dollar's decline to the
euro in the last month prevented an even bigger price increase.
Apart from the two most widely sold sorts, prices of premium unleaded and heating oil also
went up: the former by SIT 16.60 to SIT 255.80 (EUR 1.07) and the latter by SIT 7.8 to SIT
157.9 (EUR 0.66).
According to economist France Krizanic, the immediate impact of the price hike on inflation
is to be minimal, perhaps amounting to several tenths of a percent.
Krizanic stressed that the record-high prices would likely slow down economic growth, as
companies that are petrol-dependent will report worse results and subsequently invest less in
development.
But given the current rate of economic expansion, the impact on growth, like that on inflation,
is likely to be minimal, he added.
However, the situation could become more serious if the factors pushing global crude prices
higher, including instability in the Middle East, were to persist for longer periods, Krizanic
said.
PM Briefed on Euro Preparations by Bajuk, Gaspari
Gaspari and Bajuk said that preparations are on track and that Slovenia can expect a positive
report from the European Commission on its readiness to join the eurozone
Finance Minister Andrej Bajuk and Bank of Slovenia Governor Mitja Gaspari on Tuesday, 9
May briefed Prime Minister Janez Jansa on the ongoing preparations for the adoption of the
euro.
Gaspari and Bajuk said that preparations are on track and that Slovenia can expect a positive
report from the European Commission on its readiness to join the eurozone, the PM's office
said in a press release.
The trio agreed that the adoption of the necessary legislation is proceeding according to plans.
They also discussed measures to ensure a smooth functioning of the banking system in the
immediate aftermath of the planned 1 January 2007 changeover.
Government Confirms Privatisation Plan for Slovenia's No2 Bank
The government confirmed the privatisation plan for Slovenia's second largest bank, the
Maribor-based Nova kreditna banka Maribor (NKBM), under which the state would keep
25% plus one share in NKBM
The government confirmed the privatisation plan for Slovenia's second largest bank, the
Maribor-based Nova kreditna banka Maribor (NKBM), under which the state would keep
25% plus one share in NKBM.
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Finance Minister Andrej Bajuk, speaking at a news conference after the cabinet's session on
Thursday, 11 May, explained that the privatisation of NKBM would be carried out in two
phases.
During phase one the state will sell up to 20% of NKBM shares to a key investor which will
be chosen through a public call for bids.
The bank's restructuring will follow, with 5% to 10% of NKBM's shares available to private
individuals.
In phase two, the government will sell the remainder of the shares through an international
tender, Bajuk told the press.
Bajuk said that the plan was in line with previous decisions by the government to retain a
controlling share in key companies, such as the NKBM.
The privatisation guidelines also call for appointing a commission on the privatisation, with
the privatisation procedure to be completed in 18 to 24 months, Bajuk added.
"The government wants to make the NKBM a pan-Slovenian bank, specialised in the area of
doing business with individuals and offering financial support to SMEs," Bajuk stressed.
He, however, could not assess the bank's value, as a valuation is yet to be carried out by an
institution to be selected through an international tender.
Meanwhile, the minister does not believe that yesterday's decision of Belgian banking and
insurance group KBC to "reassess its investment" in Slovenia's largest bank, NLB, would
lessen the potential interest of foreign investors in the NKBM.
The privatisation plan for Slovenia's second largest bank was drafted by a group of experts
appointed by the government in November 2005.
Juncker: Slovenia Ready for Euro
Speaking at a conference on euro adoption, Jean-Claude Juncker, Luxembourg PM and the
head of the eurozone group, said that there are no obstacles to Slovenia entering the eurozone
Speaking at a conference on euro adoption in Linz on Thursday, 11 May, Jean-Claude
Juncker, Luxembourg PM and the head of the eurozone group, said that there are no obstacles
to Slovenia entering the eurozone.
Juncker went on to stress that the convergence criteria are not subjective - they are clearly
defined by the Maastricht Treaty.
According to Junker, the meeting of these criteria also needs to be judged from the
perspective of sustainability.
KBC Announcement No Threat to NLB Operations, Bajuk Says
Slovenia's finance minister believes the decision of the Belgian banking and insurance group
KBC to reduce its role in Slovenia's largest bank, NLB, to that of a financial investors does
not endanger the operations of NLB
Slovenia's finance minister believes the decision of the Belgian banking and insurance group
KBC to reduce its role in Slovenia's largest bank, NLB, to that of a financial investors does
not endanger the operations of NLB.
Andrej Bajuk suggested on Thursday, 11 May that the decision of the Belgian group did not
have far-reaching consequences for the NLB nor the government for the meantime.
"I think that there is no final decision [regarding the future role of the KBC in NLB]," said
Bajuk.
"What we found out on Wednesday, 10 May is that [KBC] is reassessing its role and that it
would limit its role to an institutional investor instead of a strategic investor," he said.
He expects that negotiations with the KBC would continue. The KBC is a responsible
institution that would not take steps to cause trouble to a bank in which it holds a 34% stake,
he added.
17
According to Bajuk, the KBC could increase its stake in the NLB to 49%, while the rest
would remain in domestic hands, although not necessarily in government ownership.
He reiterated that time was not the issue in allowing KBC to acquire a majority stake but
rather Slovenia's responsibility to uphold the EU regulations and ensure that its financial
system was stable.
According to Bajuk, EU regulations demand of Slovenia that it ensure stability of its financial
sector, which is why Slovenia does not want to lose an important instrument of influence on
the sector.
Bajuk said that he informed the cabinet of KBC's announcement, although the ministers did
not hold a debate on the matter.
Gaspari Expects Euro-Tolar Exchange Rate to Remain Stable
Bank of Slovenia Governor Mitja Gaspari has said that he expects Slovenia's inflation rate to
continue dropping and that the euro-tolar exchange rate would remain stable in run-up to
Slovenia's adoption of the single currency
Bank of Slovenia Governor Mitja Gaspari has said that he expects Slovenia's inflation rate to
continue dropping and that the euro-tolar exchange rate would remain stable in run-up to
Slovenia's adoption of the single currency.
Gaspari added that Slovenians were from the beginning decidedly in favour of entering the
EU, as he outlined Slovenia's experience in curbing inflation at a conference on the euro
changeover in Austria's Linz on Thursday, 11 May.
However, despite the country's companies being more developed than those of several other
former socialist countries, Slovenia still first had to carry out a passage into market economy,
as well as compensate for the loss of the former Yugoslav markets, he explained.
Slovenia's priority task was cutting the inflation rate, with high interest rates and policy
coordination between the government and the central bank proving successful in curbing
demand and subsequently inflation.
Another important role in enabling Slovenia to fulfil the ERM II demands, according to
Gaspari, was effective social dialogue, as part of which the trade unions accepted to keep the
rate of wage increases below the rate of productivity growth.
Bajuk: Competitive Economy Requires Effective Capital Market
"Despite some problems, the capital market in Slovenia is well poised for continued growth,
while the government-sponsored economic reforms programme and EU guidelines would
enable it to prosper further," Bajuk explained
To have a competitive economy we must first ensure the effectiveness of our capital market,
Finance Minister Andrej Bajuk told the participants of the two-day stock market conference
that opened in the seaside resort of Portoroz on Thursday, 11 May.
"Despite some problems, the capital market in Slovenia is well poised for continued growth,
while the government-sponsored economic reforms programme and EU guidelines would
enable it to prosper further," Bajuk explained.
Still, the Slovenian capital market is plagued by some problems, most notably liquidity, he
warned. According to him, this calls for a strengthened role of institutional investors, tie-ups
with other stock exchanges and compatibility of information exchange systems.
A development opportunity for Slovenia's capital market is also the planned gradual
withdrawal of the state from the economy, as in case of a "fast withdrawal, domestic
institutions might not be able to take part," Bajuk pointed out.
The minister also called for ensuring legal protection for small shareholders by strengthening
the role of relevant institution and perhaps by establishing new ones, such as the small
shareholders' ombudsman.
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An important milestone for the Slovenian capital market will be the upcoming euro
changeover, which the minister believes will have a beneficial effect on the capital market.
A panel of experts at the conference meanwhile stressed that state-owned companies must
start operating in a transparent and flexible way as soon as possible, with their listing on the
stock market a must.
According to Igor Masten of the Ljubljana Faculty of Economics, the state has little or no
reasons for not listing the companies.
Erich Obersteiner of the Austrian bank Reiffeisen Centrobank meanwhile stressed that while
listing the companies and attracting potential investors is a must, Slovenia should not neglect
domestic buyers.
"Look at what happened to privatisation in Bulgaria, where they decided exclusively for
foreign owners and have now remained without their own capital market," Obersteiner
warned.
Keith Miles, a London-based financial adviser agreed that the best way to sell state property
was through the local stock exchange.
The conference also saw home appliance group Gorenje conferred an award for being the
most transparent company in dealings with investors. The award was jointly handed out by
the Ljubljana Stock Exchange and the daily Dnevnik.
NLB Supervisors Discuss KBC Decision to Limit Role in Bank
The supervisory board of Slovenia's largest bank, NLB, discussed the decision of Belgian
financial group KBC to reduce its role in the bank to that of a financial investor
The supervisory board of Slovenia's largest bank, NLB, discussed the decision of Belgian
financial group KBC to reduce its role in the bank to that of a financial investor as it met on
Thursday, 11 May.
In a press release, the NLB said that KBC representative on the supervisory board Andre
Bergen told the meeting that his company would subsequently reduce its stake in NLB.
KBC intends to continue working with the NLB in a constructive way, although without a
presence in the management bodies, Bergen stressed as quoted by the press release.
He added that KBC, which owns 34% of NLB, would continue to field officials in the
supervisory bodies of NLB.
Meanwhile, in a statement for public broadcaster TV Slovenija, Bergen denied claims by
Slovenia's finance minister that the KBC was demanding a majority stake in the bank.
According to him, the Belgian group was willing to remain a 49% stakeholder for an extended
period of time under certain conditions.
The claim that we wanted a majority stake made by Finance Minister Andrej Bajuk is flat
wrong, he told TV Slovenija, adding that there had likely been a misunderstanding.
He said that KBC was interested in NLB as an international bank, while the Slovenian
government was thinking in terms of national politics. NLB would have extensive
opportunities for development in the Balkans, Bergen told the broadcaster.
Moreover, NLB supervisors confirmed the 2005 annual report for the NLB. Slovenia's largest
bank posted a pre-tax profit of SIT 15bn (EUR 62.6m) in 2005, up 9% over the year before.
The bank's total assets meanwhile rose by 24% to SIT 2,246.2bn (EUR 9.37bn). The average
pre-tax return on equity increased from 11.9% in 2004 to 12.5% in 2005.
The supervisors also authorised the bank's management to take out a EUR 75m loan from
KBC that is to be used for development purposes.
Slovenia Considered Difficult for Foreign Investments
The two-day stock market conference in Portoroz concluded with a debate on how foreign
investors view Slovenia's capital market
19
The two-day stock market conference in Portoroz concluded on Friday, 12 May with a debate
on how foreign investors view Slovenia's capital market. Bank Austria Kreditanstalt's Gunter
Schnaitt described it as developed but with many obstacles for foreign portfolio investors.
Schnaitt highlighted expansive red tape required to open an account as one of the biggest
problems encountered by foreign investors.
Frank Ford of the London Stock Exchange said that a roadshow of the most successful
Slovenian companies in London evoked positive responses.
The only exception was the state-run funds SOD and KAD, whose actions were labelled as
more of a marketing exercise as opposed to reflecting a sincere ambition to cooperate with
foreign investors, he said.
According to Milan Elezovic of the Nomura International group, foreign portfolio investors
are mostly turned away by the low level of liquidity in Slovenia - allegedly 10-times lower
than in Poland or the Czech Republic.
Elezovic concluded that the only way Slovenian companies can increase their visibility
abroad is by annually presenting their business results at the main European stock exchanges.
Slovenia Awaiting Decisive Euro-Readiness Reports
The European Commission and European Central Bank (ECB) are scheduled to release 16
May separate assessments of Slovenia's readiness to join the eurozone as of 1 January 2007
The European Commission and European Central Bank (ECB) are scheduled to release on
Tuesday, 16 May separate assessments of Slovenia's readiness to join the eurozone as of 1
January 2007. Both institutions are expected to give Slovenia the thumbs up thereby paving
the way for it to become the first among the countries that joined the EU in May 2004 to
adopt the euro.
Slovenia asked for an individual convergence report - instead of the usual group report that
would be issued in October - on 2 March in a bid to make sure that it would have enough time
to carry out all the preparations for eurozone entry.
The country has been meeting all the criteria for eurozone membership since late last year,
when it brought down its inflation to the euro-compatible level. The fact that Slovenia is
compliant with all Maastricht criteria has been confirmed by European Commissioner for
Economic and Monetary Affairs Joaquin Almunia on several occasions in recent weeks.
Slovenian officials are not hiding their high-hopes for the decisive reports: "I'm expecting a
positive assessment. There are no signs that our expectations are not justified," Finance
Minister Andrej Bajuk said during a recent visit to Brussels.
Despite the overall positive assessment, well-placed sources suggest that Slovenia will also be
given a number of warnings, the main concerning public finance sustainability. The
Commission is likely to underscore the need to ensure the sustainability of its pension system.
The reports are to be first steps leading to the confirmation of Slovenia's bid to join the
eurozone. Following the reports, EU leaders are expected to vote on admitting Slovenia to the
eurozone at their summit on 15 and 16 June. Moreover, EU finance ministers are expected to
take a final vote on the legal basis for Slovenia's membership on 11 July.
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. Slovenia's inflation rate in March (the basis for the reports) was 2.3%, which is 0.3
percentage points under the ceiling.
The country's deficit must moreover not exceed 3% of its GDP (Slovenia anticipates a deficit
of 1.8% this year), the public debt must stay below 60% of GDP (Slovenia's is below 30%)
and the member state must spend at least two years in the ERM II waiting room. Slovenia
entered the mechanism on 28 June 2004 as the first of the newcomers to do so.
20
The quick entry into the ERM II, the waiting room for the euro, was a result of the
government's decision to seek rapid eurozone entry because of the anticipated benefits this
would have for an economy that is heavily reliant on that of the EU.
Since joining the waiting room for the euro, Slovenia has not faced any great instability in its
economy and Slovenia's currency, the tolar, has fluctuated only slightly around the parity rate
of SIT 239.64 for one euro. It is therefore expected that the changeover rate is to stand at
around the parity rate.
Besides meeting the convergence criteria, Slovenia must bring its national legislation in line
with the EU's. The parliament recently passed amendments to the act on the country's central
bank, while a draft version of the euro changeover bill has been sent to the ECB for scrutiny
before it is adopted by the government and sent to parliament.
Slovenia has opted for the big-bang euro adoption, with the changeover period, when both
euros and tolars are in circulation, lasting through 14 January 2007. Banks will accept tolar
bills until February 2007, while the central bank will impose no limitations.
The country introduced double pricing as of 1 March of this year in a bid to prevent
unjustified price hikes at the time of the switch. The system has been working well so far,
with only a few violations noted.
Ljubljana Stock Exchange
SBI 20 benchmark index gained 73.71 points to finish the week at 5,118.8
Fuel trader Petrol and pharma company Krka were the powerhouses behind the rise of the
main market SBI 20 benchmark index which gained 73.71 points to finish the week at
5,118.8.
While Krka still remained the most dominant share volume-wise, generating SIT 1.43bn
(EUR 5.96m) out of the SIT 9.2bn (EUR 38.39m) of total trade, it "only" managed to add
0.6% to 156,570 (EUR 653.41) amidst profit taking late in the week.
Deals with Petrol meanwhile amounted to SIT 1.22bn (EUR 5.09m) and an additional SIT
2.74bn (11.43m) in block trade.
Despite shedding 3.5% on Friday, 12 May, Petrol nevertheless managed to gain 2.67% on the
week to close at SIT 85,508 (EUR 356.85).
The blue-chip heavy SBI TOP index meanwhile added 12.86 points to end the week on
1,183.12.
Several other blue chips also recorded impressive gains, most notably hardware retailer
Merkur, which added 6.71% to SIT 38,440 (160.42) and port operator Luka Koper, which
gained 5.82% to SIT 7,399 (EUR 30.88).
The upbeat weekly trading also extended to the free market, where the PIX investment fund
index gained 58.96 points to 4,098.86.
Meanwhile, the BIO bond index lost 0.14 points to 119.16 points.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.62 (+0.02)
U.S. dollar (USD) - SIT 185.46 (-3.39)
Swiss franc (CHF) - SIT 154.56 (+1.15)
British pound (GBP) - SIT 351.71 (+2.45)
21
REGIONAL INFORMATION
Municipality Wants to Buy Airport, Plans Massive Logistics Hub
A municipality in NE Slovenia is putting together a consortium that has offered to buy the
company operating the international airport in Slovenia's second-largest city, Maribor
A municipality in NE Slovenia is putting together a consortium that has offered to buy the
company operating the international airport in Slovenia's second-largest city, Maribor. The
Hoce-Slivnica municipality says the offer is part of a project to build a EUR 100m logistics
hub at the airport.
According to Hoce-Slivnica mayor Anton Obreht, the municipality sent a bid to Prevent, the
company which owns Aerodrom Maribor, offering SIT 800m (EUR 3.34m) for the airport
operator.
The aim of the municipality is to buy the airport operator and then establish a consortium that
would build a logistics hub on the premises of the airport, Obreht told STA.
According to him, the municipality, which is trying to revive business in the area, expects
Prevent to respond to the bid by next week.
"I believe we have offered a fair price," said Obreht, who added that the airport has lain more
or less idle since Prevent bought it four years ago.
The mayor believes the future of the airport lies in cargo transport and logistics services. He
added that the municipality was willing to make Prevent a partner in the project.
Meanwhile, Prevent spokesperson Monika Zvikart told STA that the company would study
the offer and take a decision on it by the end of May."
According to her, Prevent, which bought the airport for SIT 240m (EUR 1m) four years ago,
examines every bid received for the airport and weighs it up in view of the anticipated
consequences for the entire region.
Obreht stressed that the municipality has already launched talks with potential investors, both
domestic and foreign.
"We have established contacts with 14 potential investors...among others, we held talks with
representatives for Israel today and intend to meet Irish representative next week," said Jurij
Pinter, the coordinator of the project.
According to him, a public call for bids is to be published in the Slovenian Official Gazette
and the Official Journal of the EU as well as Slovenian business daily Finance and the
Financial Times.
Among foreign investors interested in the project, which is expected to completed by
December 2008, are Siemens, Raiffeisen, Vienna Airport, Bonn-Cologne Airport, UBM and
Porr.
Meanwhile, postal company Posta Slovenije, the Slovenian Railways, port operator Luka
Koper and logistics group Intereuropa are among the domestic investors said to be interested
in the project.
According to Obreht, the project also enjoys the support of the economics and environment
ministries.
22
BRANCH INFORMATION
Slovenian Tourism Ad Shown on CNN
The ad, including its 30- and 15-second versions, will complete its first run on 18 June and
will be shown several times a day
A one-minute advertisement presenting Slovenia as a tourist destination was broadcast for the
first time on the CNN International Europe news network on Monday, 8 May.
The ad, including its 30- and 15-second versions, will complete its first run on 18 June and
will be shown several times a day. It is also scheduled to be broadcast between 18 September
and 22 October.
"In the opening days of both screening periods, the full-length version will be shown, while
later a 30 second and two 15 second versions will be shown intermittently," Slovenian Tourist
Board (STO) Spokesperson Majda Rozina Dolenc told STA.
In the spring period, the 1 minute version will be shown three to four times a day until 21
May, while in the autumn period the full version will be shown between 28 and 23
September. The ad will be seen by audiences in Europe, the Middle East and Africa.
Under the slogan "Slovenia - a diversity to discover", the ad will highlight the Slovenian
coast, saltpans, world-famous white Lipizzaner horses, vineyards and other attractions.
The STO is already preparing versions in the Slovenian, German, Italian and French
languages to be shown at suitable occasions, Rozina Dolenc revealed.
Commissioned by the STO as part of the strategy aimed at promoting Slovenia as a tourist
destination, the making and showing of the ad cost SIT 180m (EUR 751,200).
Economics Minister Promises More Support for Innovators
The government is already drafting suitable short- and long-term measures
Economics Minister Andrej Vizjak has said that he is not pleased with the support
environment for innovators and that the government is already drafting suitable short- and
long-term measures.
Vizjak, speaking at the Izzivi news show late on Monday, 8 May, said that the governmentsponsored economic reforms form the long-term measures, while the short-term ones include
tax incentives for research and development projects and tenders.
According to Vizjak, several companies already have suitable mechanisms in place for
rewarding innovators; it is of key importance that companies see innovations as beneficial.
The minister moreover pointed to the increase of funds available for technological
development, from SIT 180m (EUR 751,200) in 2004 to SIT 5bn (EUR 20.9m) this year.
The ministry also wants to set up a venture capital fund and an innovations stock exchange to
increase the transfer rate of innovation into concrete business projects, he explained.
Vizjak believes that the government needs a development minister to coordinate the reforms
from one place and stressed the role of the Public Agency for Technological Development,
which can define promising projects.
Fixed-Line Number Portability Available
According to APEK director Tomaz Simonic, Slovenia now fulfils all EU demands regarding
number portability
Slovenian fixed-line phone operators were implementing number portability on Wednesday,
10 May in line with EU regulations. Number portability in fixed networks comes five months
after the same system was launched by mobile operators.
The number portability system allows users to keep their numbers when switching between
operators.
23
In line with EU rules, Slovenia should have implemented it on 1 May 2004. Its failure to do
so earned it several reprimands from the European Commission, the latest in April.
The Agency for Post and Electronic Communications (APEK) believes Slovenian fixed line
operators are well prepared for number portability.
According to APEK director Tomaz Simonic, Slovenia now fulfils all EU demands regarding
number portability.
APEK data suggest that Slovenia has 16 fixed line operators, with telco Telekom Slovenije
being by far the biggest.
Bird Flu to Cost Poultry Producer EUR 22m
Slovenia's largest poultry producer, Perutnina Ptuj, has modified its business forecasts due to
the impact of the bird flu virus in Europe
Slovenia's largest poultry producer, Perutnina Ptuj, has modified its business forecasts due to
the impact of the bird flu virus in Europe. The group expects its sales revenues to total SIT
36.7bn (EUR 153.1m), which is SIT 5.3bn (22.1m) EUR less then originally planed.
The company's CEO Roman Glaser told the press on Thursday, 11 May that the latest profit
forecast stands at SIT 504m (EUR 2.1m).
Glaser explained that Slovenian consumers quickly overcame the initial fear caused by the
outbreak, but the company was nevertheless hit hard as half of its revenues come from
exports.
He pointed to Italy, where poultry sales still only reach 30 to 50% of the pre-scare period.
Glaser furthermore said that the flu also took its toll among those employed at Perutnina Ptuj,
around 160 of whom were made redundant.
Minister Announces Overhauled E-Administration Portal
Public Administration Minister Gregor Virant has announced that an overhauled eadministration portal would be launched in Slovenia on 22 May
Public Administration Minister Gregor Virant has announced that an overhauled eadministration portal would be launched in Slovenia on 22 May.
Speaking at a press conference on the sidelines of an international meeting hosted by the
Public Administration Ministry, Virant said the launch of the upgraded portal would coincide
with the introduction of a central information system.
The portal would include all public administration services in one place, while the central
information system would form the basis for receiving electronic applications as well as
electronic authentication purposes, he said.
According to Virant, one of the most popular electronic services would likely be the extension
of vehicle registration. He said the service would be available on the overhauled portal, along
with all the existing e-services.
As regard the national strategy of electronic identification and authentication, Virant said that
the goal was to make the system safe and user-friendly, which is why the administration
intends to accept all major authentication certificates.
Virant's comments came on the sidelines of the meeting of Porvoo, the international network
of state administration, which began in Ljubljana on Thursday, 11 May.
According to Virant, the main theme of the meeting, staged in association with the Finnish
Population Registry Centre, was ensuring secure e-identification.
Meeting Stresses Europe's Dependence on Foreign Energy Sources
A debate on the development of the energy market in Slovenia and the EU, held in Ljubljana
stressed that Europe was becoming increasingly dependent on foreign energy sources and
that more should be done to ensure steady energy supply
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A debate on the development of the energy market in Slovenia and the EU, held in Ljubljana
on Thursday, 11 May stressed that Europe was becoming increasingly dependent on foreign
energy sources and that more should be done to ensure steady energy supply.
Energy is an industry which is "closely linked with the progress of the EU and Slovenia,"
State Secretary at the Economics Ministry Andrijana Starina Kosem said at the meeting.
She added that the increasing dependence of the EU has prompted the bloc to draft its future
energy policy.
The green paper on the EU's strategy for a sustainable, competitive and secure energy was
meanwhile presented by Mihela Zupancic, the head of the European Commission
Representation in Slovenia.
The dire conditions mean that action is necessary, otherwise Europe's energy dependence will
continue to increase, Zupancic said.
The participants of the meeting, staged in Slovenia's parliament, moreover called on Slovenia
to include efficient and renewable energy use into its drawing of EU funds.
MEP Romana Jordan Cizelj (EPP/SDS) stressed that Slovenia should not merely implement
EU measures but take an active part in the process of forming EU policies.
The meeting was organised as part of Europe Week by the parliamentary economy and EU
affairs committees in cooperation with the Economics Ministry.
Motorway Repairs to Causes Tailbacks in Summer Months
Slovenia's Motorway Company (DARS) has announced it would carry out two major
motorway maintenance projects in the summer months, which will likely result in tailbacks on
key sections between Ljubljana and the south of the country
Slovenia's Motorway Company (DARS) has announced it would carry out two major
motorway maintenance projects in the summer months, which will likely result in tailbacks on
key sections between Ljubljana and the south of the country.
The urgent need for repairs on the motorway sections between Ljubljana and the coast (SW)
and Ljubljana and Novo mesto (SE) means that DARS has no option but to carry out
roadworks during the peak summer season.
The works on the Ljubljana-Novo mesto route will include the laying of new asphalt and
repairs to two tunnels. They will last from 19 June until the end of August.
"There is no way to avoid tailbacks on this section," said Andrej Vovk, the coordinator for
maintenance at DARS.
In a bid to avoid long delays, DARS is asking people to resort to public transport - rail and
bus runs will be increased in the time of the works. The works are expected to have minimal
impact on the flow of traffic on what is an already busy section.
The works on the two sections represent the two biggest motorway maintenance projects this
year. DARS estimates the total cost of repairs on Slovenia's motorway network in 2006 to
amount to SIT 10.15bn (EUR 42m), which is 75% more than last year.
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COMPANIES
WAZ Enters Joint Venture with Dnevnik Owner DZS
WAZ and Slovenian publishing house DZS have decided to form a 50:50 joint venture which
will take charge of DZS's 51.05% stake in the daily Dnevnik
Long-running speculations about the arrival of German media conglomerate WAZ to Slovenia
have come true: WAZ and Slovenian publishing house DZS have decided to form a 50:50
joint venture which will take charge of DZS's 51.05% stake in the daily Dnevnik.
DZS said on Monday, 8 May that the two companies had signed an agreement on the joint
management of media investments on the Slovenian market. The joint venture is the first step
in this direction, the press release reads.
The newly established company will have a two-member management board. The chairman
will be from the ranks of the DZS while WAZ will have a board member.
DZS and WAZ will moreover seek other opportunities for joint ventures on the Slovenian
media market, the company also said.
Speculations about the arrival of WAZ started at the beginning of this year, with Dnevnik as
well as the two other nation-wide dailies, Delo and Vecer, named as possible targets.
In March it was revealed that WAZ was in talks with the biggest Dnevnik shareholder. DZS
chairman Bojan Petan told STA then that both companies were simply looking for
"opportunities for growth in the markets of the southeastern region."
The chairman of Dnevnik, Branko Pavlin, told STA that Dnevnik hopes to expand on the
Slovenian newspaper and magazine market with the help of WAZ. Moreover he said he hoped
Dnevnik would expand on markets where WAZ is already present.
Pavlin also emphasised that DZS said there would be no significant changes to Dnevnik's
business or editorial policies. "The incoming publisher is foremost interested in profitability,
which can only be achieved with high-quality, independent work."
WAZ, based in Essen, is one of the biggest newspaper publishers in Europe, with a total of 38
newspapers in its portfolio. In addition to Germany, it has papers in Croatia, Hungary,
Bulgaria, Romania, Serbia-Montenegro and Macedonia.
Its foothold in Croatia is especially big: Europapress Holding, which is in 50% ownership of
WAZ, publishes 18 titles, including the general-interest Jutarnji list and business daily
Poslovni Dnevnik.
The new joint venture will have to obtain approval from the Culture Ministry for the
acquisition of the stake; by law any transaction involving over 20% of a media outlet requires
Culture Ministry approval.
DZS owns 51% of Dnevnik. Other major owners include Austrian publisher Styria (26%), the
state-owner Pension Fund Management (10%) and newspaper publisher Vecer (6.5%).
The daily Dnevnik has an average circulation of about 60,000, according to information
available on its web page. The publisher also publishes the tabloid Nedeljski Dnevnik, one of
the most widely read weekly papers in Slovenia.
Adria Airways Gets New Chief Executive
Tadej Tufek has been named the new chairman of flag carrier Adria Airways
Tadej Tufek has been named the new chairman of flag carrier Adria Airways. The incumbent
board member was appointed for a five-year term by the company's supervisory board on
Monday, 8 May.
Moreover, Marjan Ravnikar has been named the chief financial officer, Branko Grosl, the
chairman of the Adria supervisory board, told STA.
26
Tufek was appointed to the post after his predecessor Iztok Malacic stepped down in early
March over a botched lease of a cargo plane which he had made a crucial part of his strategy
to turn the company around.
The airline later leased a cargo version of the Saab 340 turboprop and leased out the Airbus
320, replacing it with the smaller and cheaper Boeing 737-500.
Grosl explained that the moves have borne fruit already, as the company posted a loss of EUR
400,000 for the first quarter of this year, far less than in the same period last year.
Moreover, in the first four months of this year Adria increased the number of flights by 9%
year-on-year and upped passenger numbers by 15%, he explained.
Adria ended 2005 with an operating loss of EUR 7m.
Petrol Shareholders to Get EUR 4.17 per Share
Shareholders of fuel trader Petrol voted in favour of paying out dividends worth SIT 1,000
(EUR 4.17) per share
Shareholders of fuel trader Petrol voted in favour of paying out dividends worth SIT 1,000
(EUR 4.17) per share, and backed a proposal by a small shareholder to cut monthly benefits to
supervisory board members.
At the AGM on Wednesday, 10 May, the shareholders supported a proposal by Rado Tomazic
to deny the supervisors taking part in profit sharing, directors' fees, travel expenses and other
payments.
They will only be entitled to an AGM-approved monthly payment amounting to EUR 1,000
for supervisory board members and EUR 2,500 for the chief supervisor.
Petrol's AGM was the first time small shareholders have united before an AGM of a large
Slovenian company, with Tomazic acting on behalf of 5% of Petrol's small shareholders.
The state-run KAD fund withdrew its proposal to give the management a green light to
increase the company's share capital by 50%.
According to Petrol CEO Marko Kryzanowski, the supervisors tasked the management to first
draft a five-year business plan by summer. It would be wiser to discuss a possible capital
injection after the plan is drafted, Kryzanowski added.
The AGM decided to pay out SIT 2.1bn (EUR 8.76m) of the company's accumulated profit of
SIT 9.8bn (EUR 40.89m) in 2005 for dividends.
An additional SIT 38.4m (EUR 160,250) will be given as company's shares to the supervisors,
while the remaining SIT 7.7bn (EUR 32.13m) will be distributed equally to reserves and
carried over to the next year.
Energy group Petrol posted double-digit growth in sales and profits for 2005, with sales
revenues up 19% to SIT 420bn (EUR 1.75bn) and profits increasing by 17% to SIT 8.1bn
(EUR 33.8m).
The upbeat results have placed Petrol as the largest Slovenian energy company and the
biggest Slovenian group revenues-wise, Kryzanowski said.
Media Group Dnevnik Increases Revenues by EUR 1.62m in 2005
The group also managed to increase its pre-tax profits to SIT 592m (EUR 2.47m)
The Dnevnik media group, including the daily Dnevnik and three subsidiaries, posted SIT
9.19bn (EUR 38.35m) in revenues in 2005, SIT 390m (EUR 1.62m) more than in 2004, the
company said on Wednesday, 10 May.
The group also managed to increase its pre-tax profits to SIT 592m (EUR 2.47m). The upbeat
results were mainly caused by increased circulation, a rise in income from advertising and
successful business links with other companies, Dnevnik said.
The company has managed to increase its market share for the third year in a row, upping its
share on the dailies market by almost 25% in 2005.
27
The supervisory board meeting also agreed to divide SIT 1.08bn (EUR 4.5m) of accumulated
profits, and decided to pay out dividends of SIT 812.20 (EUR 3.39) per share.
The supervisors also assessed the group's business results in Q1 2006, revealing that positive
trends are continuing.
Fuel Trader Petrol Reports Rise in Q1 Revenues, Profit
Slovenian fuel trader Petrol has reported a 14% jump in first-quarter revenues, which stood
at SIT 104bn (EUR 434m)
Slovenian fuel trader Petrol has reported a 14% jump in first-quarter revenues, which stood at
SIT 104bn (EUR 434m). The group's profit was up 5% over the same period in 2005 at SIT
1.63bn (EUR 6.8m).
According to the press release from the group, Petrol on Wednesday, 10 May which operates
over 300 petrol stations in Slovenia and 50 more in the former Yugoslavia, beat volume-based
sales estimates by 1%, selling 473,000 tonnes of crude oil products.
Meanwhile, sales of non-fuel products beat forecasts by 8%, totalling SIT 10.5bn (EUR
43.8m), the company added.
Despite the strong sales, the company's profit was given a one-time boost by the sale of its
share in the NFD fund, which raked in earnings of SIT 451m (EUR 1.88m) for the parent
company.
The results were reviewed on Wednesday, 10 May by the supervisory board of the company.
Delo Editor-in-Chief Appoints Two New Editors
Ivan Puc is the new home desk editor and Irena Staudohar the new editor of Delo's Saturday
supplement Sobotna priloga
The editor-in-chief of the leading serious paper Delo, Peter Jancic, confirmed for STA on
Thursday, 11 May that he has appointed two new members of his editorial team: Ivan Puc is
the new home desk editor and Irena Staudohar the new editor of Delo's Saturday supplement
Sobotna priloga.
Puc was appointed on Tuesday, 9 May. Before he joined Delo, he worked as a journalist at the
weekly Mag and was editor of the daily Slovenec before that.
As of May, Staudohar succeeded Ervin Hladnik Milharcic, whose replacement has been
echoing in the public. She used to work as a journalist for the weeklies Zurnal and Mag and
the daily tabloid Direkt.
Jancic said he decided to replace Hladnik Milharcic, a journalist with an enviable career,
because he lacks university degree.
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FAIRS, CONGRESSES
Internautica Showcases over 200 New Boats
The show's main attraction was some 200 vessels, including super-yachts that are over 26
metres long
The 11th international boat show Internautica opened in the seaside resort of Portoroz on
Tuesday, 9 May. The show's main attraction was some 200 vessels, including super-yachts
that are over 26 metres long.
In addition to the attention-grabbing yachts, over 200 exhibitors from Slovenia and abroad
presented dingies, jet-skis, engines, canoes, clothing and navigation equipment.
The show opened with an address by Transport Minister Janez Bozic, who said that nautical
tourism was a great opportunity for Slovenia that needs to be accommodated in the national
tourism strategy.
He also pointed out that the number of boats registered at the Maritime Directorate increased
by 500 in the whole of 2005 and by as much as 850 so far this year.
According to Bozic, the resulting increased traffic calls for additional safety measures, which
the ministry would try to enforce in cooperation with Italy and Croatia in order to facilitate
navigation and improve safety.
Iskra Avtoelektrika Ups Profit to EUR 1m in Q1
Automotive parts maker Iskra Avtoelektrika increased its profit to EUR 1m in Q1 of 2006,
which is an almost ten-fold increase in comparison with the first three months of 2005
Automotive parts maker Iskra Avtoelektrika increased its profit to EUR 1m in Q1 of 2006,
which is an almost ten-fold increase in comparison with the first three months of 2005, the
company said on Thursday, 11 May.
The group, based at Sempeter pri Novi Gorici, moreover generated EUR 44m of revenues in
the same period, a 20% increase year-on-year.
The upbeat results were mainly due to the increase in sales of the controlling company and the
sale of Iskra Avtoelektrika's Iranian subsidiary.
Despite the soaring costs of copper and aluminium, all of the companies in the group posted
positive results, with the exception of Iskra Avtoelektrika's Chinese and Brazilian
subsidiaries, where production has yet to start.
Government Adopts Privatisation Plan for Telco
The cabinet adopted the privatisation plan for the national telco Telekom Slovenije, which
calls for the sale of the state's entire stake in Telekom and its subsidiaries
The cabinet adopted the privatisation plan for the national telco Telekom Slovenije, which
calls for the sale of the state's entire stake in Telekom and its subsidiaries, Minister of
Economy Andrej Vizjak has told the press.
Vizjak, speaking at a press conference following the cabinet's regular session on Thursday, 11
May, added that the three-phase sale would commence with the listing of Telekom on the
stock market.
It will be followed by selling 10% of the telco's shares to domestic private investors and
conclude by selling 39% of the company's to a strategic investor, he revealed.
The sale of the state's stake to individuals and the strategic investor will be carried out in two
phases, with the second phase taking place three years after the first, he added.
29
Vizjak additionally explained that all Slovenian citizens will be entitled to 5% of the telco's
shares under the same conditions in the first step, while the remaining 5% would be offered to
those who promise to keep their shares for at least three years.
The foreign strategic investor will also first be able to acquire only 25% of the company, and
be entitled to purchase the remaining state stake three years later.
Vizjak stressed that the state would publish an international call for bids in order to find an
investor that would be willing to continue to develop the company, retain quality and upgrade
its services.
Vizjak stressed that the government wants to list Telekom Slovenije as soon as possible,
adding that the telco's listing would have to be carried out by the company's management.
Matjaz Jansa, the head of the Economics Ministry's directorate for electronic
telecommunications, added that the move could happen by autumn this year.
The sale of the state-run KAD fund in the telco will be overseen by a commission, consisting
of representatives of the Economics Ministry, the state run Restitution Fund (SOD) and the
Pension Fund Management (KAD). The commission will be appointed in a month's time,
Vizjak revealed.
The privatisation plan for the telco, in which the state owns 62.53% and KAD and SOD
additional 11.61%, was drafted by a group of experts appointed by the government in
November 2005.
Gorenje Q1 Results in Line with Plans
Household appliance group Gorenje had a relatively successful start to the year, increasing
its revenues to SIT 55.3bn (EUR 230.78m) in Q1 of 2006, up 2.4% over the same period last
year
Household appliance group Gorenje had a relatively successful start to the year, increasing its
revenues to SIT 55.3bn (EUR 230.78m) in Q1 of 2006, up 2.4% over the same period last
year.
The group also managed to up its net profit to just over SIT 1bn (EUR 4.17m) in the same
period, up 1.8% year-on-year.
Gorenje's supervisors, who assessed the business results on Friday, 12 May, said that both the
group and the core company are operating well and in line with plans.
The biggest hazards for Velenje in 2006, according to analysts, are volatile prices of
resources, such as metals and plastics, and the implementation of the EU directive on
recycling, which entered into force in Slovenia in August last year.
Gorenje will try to offset the negative impacts by cost optimisation, search for cheaper
suppliers, and a rise in prices of some of its products.
It also expects a lot from the new refrigerators and freezers factory in Serbia-Montenegro,
which will begin operation in October.
30
SLOVENIA IN BRIEF
PM's Economic College Discusses Two More Privatisation Plans
The proposals to privatise the country's largest insurer Zavarovalnica Triglav and the
withdrawal of the state-run KAD and SOD funds from companies form a suitable basis for
launching privatisation procedures, PM Janez Jansa's economic college concluded on
Monday, 8 May. Government spokesperson Valentin Hajdinjak told the press after the session
that the purpose of the meeting was not to confirm the proposed privatisation models, but to
stage a first reading before the government launches formal procedures to that effect.
Funding of Valvasor-Chevening Scholarships Extended
An agreement to extend the commonly funded "Valvasor - Chevening" scholarship
programme was signed by Minister of Culture Vasko Simoniti and UK Ambassador to
Slovenia Tim Simmons in Ljubljana on Tuesday, 9 May. The Valvasor - Chevening
scholarships are awarded by the Ministry and the UK Foreign Office to enable Slovenian
students to undertake postgraduate studies in the UK in the areas relevant to Slovenia's
cultural sector.
Slovenian Delegation Takes Part in 114th IPU Assembly
A delegation of Slovenian lawmakers took part in the 114th assembly of the Interparliamentary Union in the Kenyan capital of Nairobi, whose main topic is promoting
democracy and helping to build democratic institutions.
Minister Calls for Standardisation of Security Equipment in EU
Slovenian Interior Minister Dragutin Mate called for the standardisation of security equipment
in the EU as one of the key elements of boosting security, as he took part at a conference on
European security in Brussels on Wednesday, 10 May.
Cabinet Confirms EU-Compatible Changes to Aviation Act
The cabinet has confirmed changes to the aviation act with which the country would
implement the EU directive on the reporting of passenger data and transpose other EU
regulations. The aim of the law is also to abolish other incompatibilities of the current
Slovenian legislation with EU regulations, the Government PR and Media Office said in a
press release on Thursday, 11 May.
Slovenian Cinema to Be Promoted at Stand no. 103
The Slovenian Film Fund will for the third time present the Slovenian film industry at the film
market in Cannes as part of the high-profile film festival in this French resort between 16 and
28 May. The Fund has registered two Slovenian films and one co-production: "Ljubljana the
Beloved" by Matjaz Klopcic, "L like Love" by Janja Glogovac and "Border Post" by Rajko
Grlic.
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