Slovenia Business Week no. 07, February 12, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 2
Economy Ministry Unveils Future Plans ............................................................................... 2
Slovenia Fails to Cut Deficit in 2006 ..................................................................................... 2
Inflation Down to 2.7% in January ........................................................................................ 3
INTERNATIONAL COOPERATION ...................................................................................... 4
Slovenia Appoints First Ambassador to Montenegro ............................................................ 4
Minister on Latest Developments in EU-India Science Ties ................................................. 4
Slovenia Ambassador Hands Credentials to UN Secretary General ...................................... 5
EUROPEAN UNION ................................................................................................................. 6
European Commission Approves Slovenia's CO2 Emission Plan ......................................... 6
LEGISLATION .......................................................................................................................... 7
Government Proposes Changes to Troubled Companies Aid Law ........................................ 7
STATISTICS/FORECASTS ...................................................................................................... 8
Women Earn 93% Average Men's Pay .................................................................................. 8
Average Slovenian Wage Buys Much Less Than German Wage .......................................... 8
Survey Shows Slovenia Had a 12% Poverty Rate in 2004 .................................................... 9
Industry Expanded by Record 7% in 2006 ............................................................................. 9
FINANCE................................................................................................................................. 11
Slovenian Export Bank Signs Deal with German Banking Group ...................................... 11
Hypo Alpe-Adria-Bank Doubles Net Profit in 2006 ............................................................ 11
Government Moves to Lift Restriction on Wage Growth .................................................... 11
Banks Start Cutting Commission for Coin Deposits ............................................................ 12
Euro Adoption Went Smoothly, Government Agrees ......................................................... 12
Warsaw Stock Exchange Eyeing LJSE ................................................................................ 13
Slovenia Got EUR 393M in EIB Loans in 2006 .................................................................. 13
Ljubljana Stock Exchange .................................................................................................... 13
REGIONAL INFORMATION ................................................................................................ 15
Ljubljana Flat Prices Up 18% in 2006 ................................................................................. 15
BRANCH INFORMATION .................................................................................................... 16
Electricity Consumption up 2.7% in 2006 ........................................................................... 16
Government to Channel Extra Funds for Fixing Dilapidated State Roads .......................... 16
Government Confirms New Tourist Slogan, Rejects Logo ................................................. 17
Classical Lipizzaner Should Be Preserved, Farm Directors Agree ...................................... 17
Slovenian Small Shareholders Present Pioneering IT Solution ........................................... 18
COMPANIES ........................................................................................................................... 19
Slovenian Telco Loses Out in Bidding for Kosovo Mobile License ................................... 19
Hermes Softlab Launches Second Development Company in BiH ..................................... 19
ACH Conglomerate Acquires 52% of Mobile Service Provider Debitel ............................. 19
Orbico Publishes Takeover Bid for Emona Obala ............................................................... 20
SLOVENIA IN BRIEF ............................................................................................................ 20
Ziga Turk Nominated for Development Minister ................................................................ 20
Slovenian and Italian Faculties Launch Cooperation ........................................................... 21
Interior Ministry to Focus on Schengen, EU Presidency in 2007 ........................................ 21
Ambassador to Israel Relieved of Duties Ahead of Minister Naming ................................. 21
Preseren Awards Conferred as Slovenia Celebrates Culture ............................................... 21
Vice-Governor Nominated for Top Job at Central Bank ..................................................... 21
HEADLINES
Economy Ministry Unveils Future Plans
The Economy Ministry presented its future plans, highlighting the next stage in the
privatisation process and the drawing of funds from the new EU financial perspective as its
key priorities
The Economy Ministry presented its future plans on Monday, 5 February, highlighting the
next stage in the privatisation process and the drawing of funds from the new EU financial
perspective as its key priorities.
Looking back at the achievements of the past two years, Economy Minister Andrej Vizjak
said that the ministry had managed to modernise its policies and turned from restructuring
projects to development measures.
Vizjak told the press that the multiplying effects of measures for boosting foreign investment,
competitiveness of companies and construction of tourism infrastructure are becoming ever
more visible. These measures created 300 new jobs in 2003, 900 in 2005 and 4,200 in 2006.
Presenting future plans, Vizjak turned first to the Directorate for Electronic Communications,
highlighting the setting up of a national broadband network as one of its key tasks.
He added that people who invested into the public telephone network, now owned and
operated by Telekom Slovenije, would be compensated this year as part of the privatisation of
the telco.
The Directorate for Entrepreneurship and Competitiveness will focus on the phasing of EU
funds as well as draw up the bill on the regulation of a supportive environment for
entrepreneurship and a bill dealing with venture capital.
Also concentrating on EU funds will be the Tourism Directorate, which will also monitor the
implementation of the tourism development plan for 2007 - 2012. Vizjak highlighted the
airline sector as one of the key areas of the plan.
The Energy Directorate will meanwhile handle the ministry's cooperation in major investment
projects of Slovenia's energy companies.
Vizjak also explained that the systemic and business sides of the energy sector in Slovenia
would be divided, with the state planning for one system operator and five distribution
companies.
Finally, the Directorate for Foreign Economic Relations will continue setting up Slovenian
representation offices abroad.
Slovenia Fails to Cut Deficit in 2006
Slovenia failed to curb the general government deficit in 2006 despite favourable economic
trends
Slovenia failed to curb the general government deficit in 2006 despite favourable economic
trends. The government did cut spending, but this was not enough to reduce the deficit, which
was up 0.2 percentage points year-on-year to 1.6% of GDP, the Institute for Macroeconomic
Analysis and Development (IMAD) has found.
Based on available data, the actual as well as the structural deficit increased, Bostjan Vasle,
the head of IMAD's macroeconomic analysis department, told the press on Wednesday, 7
February.
Finance Ministry calculations suggest that the main factor behind the increase in the structural
deficit (which is estimated at 1.7% of GDP) was the payroll tax cut, Vasle said, quoting
figures in IMAD's latest Economic Mirror.
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The IMAD believes, however, that government spending will continue to contract, which will
reduce the structural and actual deficit by 2009. The general government deficit is expected to
stand at 1% of GDP that year.
The macroeconomic environment also had a favourable impact on industrial production,
which was up 7.8% year-on-year in the first 11 months of 2006, more than IMAD forecast in
its Autumn Report.
Unemployment trends were positive as well, for the number of the unemployed was down by
2,000 in the last quarter of the year, Vasle explained.
Wage growth was moderate last year: gross wages were up 4.9% in nominal terms and 2.4%
in real terms, which is still below the productivity gains.
"This had a beneficial impact on economic activity indicators, but more importantly, it did not
put extra pressure on prices," Vasle said.
The think-tank is of the opinion that slower wage growth had been a major stabilising factor
and contributed to the fulfilment of criteria for the adoption of the euro.
However, it feels that pay policy should be adapted to the altered macroeconomic
environment.
"We advocate the position that it makes sense to reduce the gap between productivity and
salary growth over the coming years, or even harmonise wages with productivity," he said.
Inflation, which averaged 2.5% at the end of 2006, is expected to remain moderate into this
year. Vasle does not expect a general increase in January due to the adoption of the euro even
though prices in individual groups have increased.
Inflation Down to 2.7% in January
The effects of cheaper fuel and clearance sales pushed annual inflation 0.1 percentage points
lower to 2.7% in January despite fears of price increases owing to the adoption of the euro
The effects of cheaper fuel and clearance sales pushed annual inflation 0.1 percentage points
lower to 2.7% in January despite fears of price increases owing to the adoption of the euro,
the Statistics Office said on Friday, 9 February.
According to the office's data, prices fell by 0.7% on average in January, the third consecutive
year that deflation was registered in the first month.
The figure comes in spite of fears of price hikes associated with Slovenia's adoption of the
euro at the beginning of the year.
Although the Statistics Office noted a 1.3% increase in prices in bars and restaurants, the
effects on the consumer price index were outweighed by cheaper clothing and footwear and a
fall in fuel and energy prices.
Due to the clearance sales, clothes and shoes were 11.9% cheaper on average. Meanwhile,
fuel prices dropped by 1.8% on average.
Prices of goods fell by 1.3% in January, while services were 0.7% dearer, the Statistics Office
found.
The average 12-month inflation rate remained unchanged compared to December at 2.5%.
In the past year, prices in the hospitality services sector rose 6.9% on average, alcohol and
tobacco was 5.5% dearer, and food and drink prices were up by 4%.
The only groups to register drops in prices compared to January last year were transport
(down 0.4%) and housing (down 0.1%).
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INTERNATIONAL COOPERATION
Slovenia Appoints First Ambassador to Montenegro
The Official Gazette has published a decree by President Janez Drnovsek with which he to
appointed Jernej Videtic the first Slovenian Ambassador to Montenegro
The Official Gazette has published a decree by President Janez Drnovsek with which he to
appointed Jernej Videtic the first Slovenian Ambassador to Montenegro.
Slovenia opened its embassy in Montenegro on 23 July 2006, becoming the first country to
open a diplomatic mission in the Western Balkans country after the May independence
referendum saw the break up of Serbia and Montenegro.
The embassy has been run by charge d'affaires Branko Rakovec, the former consul general in
the Montenegrin capital of Podgorica.
Montenegro's first Ambassador to Slovenia Branko Perovic presented his credentials in
October.
Minister on Latest Developments in EU-India Science Ties
Higher Education, Science and Research Minister Jure Zupan attended an EU-India science
ministerial in New Delhi, where the parties signed a cooperation memorandum on in a bid to
involve India into the EU's 7th Research Framework Programme
Higher Education, Science and Research Minister Jure Zupan attended an EU-India science
ministerial in New Delhi, where the parties signed a cooperation memorandum on
Wednesday, 7 February in a bid to involve India into the EU's 7th Research Framework
Programme.
Zupan told STA that the document signed today included India's commitment to allocate EUR
5m a year for Indian scientists taking part in the research programme.
According to Zupan, both the EU and India are very keen to cooperate in science, while they
believe the most potential lies in nanotechnology, biotechnology, environmental protection
and the exploration of space.
The minister explained that India was increasingly aware of the importance of science and
research and had invested much for this purpose.
"India's new five-year economic plan includes the same guidelines as the EU's 7th Framework
Research Programme," the Slovenian minister said. The bloc's main instrument for funding
research and development earmarks funds of EUR 50.52bn for 2007-2013.
Germany, which is currently presiding over the EU, singled out India as a key partner for
cooperation in science.
German Education and Research Minister Annette Schavan, who headed the EU's delegation
at the ministerial in Delhi, has urged continuity in the EU's policy towards India, something
that Zupan says will be much easier to ensure given the new trio presidencies.
As part of the EU presiding trio, Zupan met his German and Portuguese counterparts,
Schavan and Jose Mariano Gago, for talks about key research issues during the three
countries' consecutive six-month presidencies.
The ministers also touched on the European Institute of Technology (EIT), European
Research Council, the future of the Lisbon Process, and future cooperation with India.
On the sidelines of the ministerial, Zupan met Indian Minister of Science and Research Kapil
Sibal, with whom he discussed options for a Slovenian-Indian agreement on joint
technological and industrial research.
The pair agreed that the Slovenia-India science and technology cooperation committee is to
hold a session in May. This year Minister Sibal is also expected to visit Slovenia.
4
Slovenia Ambassador Hands Credentials to UN Secretary General
The fourth Slovenian ambassador to the World Organisation, Sanja Stiglic is taking over as
Slovenia is getting ready to assume the EU's rotating presidency at the beginning of 2008
Slovenia's incoming ambassador to the United Nations presented her credentials to Secretary
General Ban Ki-moon in New York on Wednesday, 7 February. The fourth Slovenian
ambassador to the World Organisation, Sanja Stiglic is taking over as Slovenia is getting
ready to assume the EU's rotating presidency at the beginning of 2008.
The EU presidency makes the biggest ever challenge for Slovenian diplomats, including those
in New York. The amount of their work will increase substantially given the wide variety of
issues the EU deals with.
For this reason, the Slovenian mission at the UN headquarters has taken on additional staff.
While an average six diplomats have worked there so far, some 14 will be on hand for the
tasks related to Slovenia's stint at the helm of the EU, plus at least as many interims and
auxiliary staff. Moreover, the mission will temporarily move to a larger office until after the
presidency.
Born in 1970, Stiglic is a career diplomat with a university degree in law. In 1995 she was
appointed an attaché to the Foreign Ministry's department for the neighbouring countries and
to the Embassy in Zagreb.
She worked as an adviser to the Foreign Ministry between 1996 and 1997, and from 1997 to
2002 as a secretary at the mission to the UN.
Before leaving for New York, Stiglic headed the Foreign Ministry's department for relations
with the countries of North, West and Central Europe.
Stiglic has succeeded the third Slovenian ambassador to the UN, Roman Kirn. Previously, the
office was held by Ernest Petric and Danilo Tuerk, while Ignac Golob was Slovenia's first
unofficial representative at the World Organisation.
The country was a non-permanent member of the UN Security Council in 1998 and 1999, a
stint that it intends to apply for again for the 2012-2013 period.
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EUROPEAN UNION
European Commission Approves Slovenia's CO2 Emission Plan
The European Commission approved Slovenia's proposed quota for CO2 emission
allowances, endorsing the country's plan to allocate 8.3 million tonnes per year to industry in
the 2008-2012 period
The European Commission on Monday, 5 February approved Slovenia's proposed quota for
CO2 emission allowances, endorsing the country's plan to allocate 8.3 million tonnes per year
to industry in the 2008-2012 period.
The Commission says the plan is consistent with Slovenia's commitment under the Kyoto
Protocol, its expected emissions and its potential to reduce emissions. It is also lower than the
verified emissions of Slovenia in 2005.
Environment Commissioner Stavros Dimas said in a press release that Slovenia had proposed
"a sound national allocation plan, which we have accepted with few changes."
"The Slovenian government has clearly understood the need to ensure that the Emissions
Trading Scheme remains a successful weapon for fighting climate change that others can
emulate."
However, the approval is conditional on Slovenia making changes to two aspects of its plan.
More information needs to be provided on how it will treat new entrants to the emissions
trading scheme.
Moreover, the proposed extent of companies' use of credits from emission-reduction projects
in third countries under the Kyoto Protocol's flexible mechanisms is not consistent with the
rule that these mechanisms should be used to supplement domestic action on emissions.
Consequently Slovenia is required to limit the use of these credits to 15.7% of its total
allocation, the Commission says.
The approval makes Slovenia the only country besides Great Britain from which the
Commission did not demand restrictions of proposed quotas. The Commission has so far
assessed 13 national allocation plans.
6
LEGISLATION
Government Proposes Changes to Troubled Companies Aid Law
The cabinet confirmed amendments to the act governing rescue and restructuring aid for
troubled companies that clear up confusion over the definition of a troubled company
The cabinet confirmed on Wednesday, 7 February amendments to the act governing rescue
and restructuring aid for troubled companies that clear up confusion over the definition of a
troubled company.
According to Economy Minister Andrej Vizjak, the changes take into consideration the
experience gained from implementing the act so far.
The goal is to make the law simpler and do away with confusion regarding the definition of a
troubled company, Vizjak added.
The proposed document includes a more precise definition of a troubled company with an
exact formula for working out capital adequacy.
Moreover, the changes set down that a subsidiary can receive state aid only if the parent
company cannot help it.
The changes also propose a new system for confirming state aid for small- and medium-sized
companies in line with which the government's approval would no longer need to be upheld
by the European Commission.
According to Vizjak, this is in line with EU regulations and will greatly simplify the
procedures for granting aid to troubled SMEs.
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STATISTICS/FORECASTS
Women Earn 93% Average Men's Pay
Women earned an average of EUR 1,069.07 a month in 2004, while the average monthly
salary paid to men was EUR 1,149.33
Women earned an average of EUR 1,069.07 a month in 2004, while the average monthly
salary paid to men was EUR 1,149.33. This means that women got an average EUR 80 less
than men or 93% of what men earned, according a report from the National Statistics Office.
When comparing earnings across major professions, it turns out that the difference between
women's and men's salaries was highest in employees operating machines and in assemblyline workers. Women in these professions earned only 75% of what men did.
On the other hand, women administrative staff earned 94% of the salary paid to their male
colleagues.
Still, women working in construction earned an average of nearly 18% more than their male
peers in 2004. Analysts attribute this to the fact that while only a few women work in the
construction industry (10% in 2004), most of them have positions that are better paid, such as
managerial or administrative posts.
Women also earned more than men in transport, storage and communication industries, i.e.
women's earnings were more than 6% that earned by men.
The biggest difference in earnings was posted in health care and social services. Women
employees in that sector earned less than 70% of what their male peers earned.
This is due to the low, 19% percentage of male employees in the sector, coupled with the fact
that most of them are doctors, while the majority of women work as nurses, the report says.
A comparison among regions shows that the highest earnings were paid to employees in
central Slovenia (the Osrednjeslovenska region). The average salary there exceeded the
average for the whole country by 14%.
The lowest monthly earnings in 2004 were recorded in the Pomurje region in the northeastern
most part of Slovenia, which is the least developed among the country's regions.
Average Slovenian Wage Buys Much Less Than German Wage
The average Slovenian wage buys only 51% of an average German wage and 59% of an
average Italian wage
The average Slovenian wage buys only 51% of an average German wage and 59% of an
average Italian wage, a publication by researchers of the Institute for Economic Diagnostics at
the Maribor Faculty of Business and Economics says.
In a book launched on Tuesday, 6 February, the researchers say they found that Slovenians
are paid significantly less than Germans and Italians but are forced to pay only a little less for
their goods and services.
According to the book, the convergence of Slovenian prices to those of Germany and Italy is
much greater than the convergence of wages.
While prices of goods do not differ much among the countries, prices of services in Slovenia
are still cheaper than in the two reference countries, predominantly because of lower wages.
According to the publication "Purchasing Power of the Euro in Slovenia, Germany and Italy",
prices in Slovenia are 18% lower than in Germany and 15% lower than in Italy on average.
One euro buys 22% more in Slovenia than in German and 16% more than in Italy, the authors
found.
8
However, Slovenian wages lag well below those of German and Italian wages, making the
purchasing power of an average earner in Slovenia much lower than that of average earners in
Germany and Italy, the book says.
The average net wage in Slovenia stood at EUR 777.4 in October 2006.
Survey Shows Slovenia Had a 12% Poverty Rate in 2004
People with income below 60% of the median disposable income for a household member
equivalent are considered as being under the poverty line
Slovenia had a poverty rate of 12.15% in 2004, with women and single-member households
being the most vulnerable categories, Stanka Intihar from the Level of Living Statistics
Department of the National Statistics Office told the press on Friday, 9 February.
People with income below 60% of the median disposable income for a household member
equivalent are considered as being under the poverty line, said Intihar.
The poverty threshold for 2004 was 5,278 euros per person, which means that a family of four
needed a disposable monthly income of at least EUR 924 to exceed the poverty threshold, she
added.
For the first time, poverty indicators have been calculated from the results of a survey on life
conditions, conducted in 2005.
The survey shows that the poverty rate increases if social transfers are not considered as an
income. In that case the poverty rate would have been 25%, which indicates that social
transfers have a positive impact on the poverty rate.
The most vulnerable households in terms of poverty rate in 2004 were single-member
households, with women being more exposed.
A high poverty rate was also observed among single-parent households with at least one child,
and households with three children, which were slightly above the average poverty rate.
Accommodation status also influenced the poverty rate, with 25% of tenants living under the
poverty threshold, compared to only 10% of apartment owners, said Intihar.
Vulnerable groups also include all inactive persons with the exception of retired men.
Retired women and other inactive persons were at high risk of poverty, while the lowest
poverty rate was observed among employed persons aged between 25 and 49, and among
families with one or two children.
The survey shows that Slovenia had a low poverty rate in 2004, with only Czech Republic,
the Netherlands and Sweden having a lower share of poor people, said Intihar.
European countries with the highest percentage of people under the poverty line were Ireland,
Greece, Spain, Italy, Latvia, Lithuania, Poland and Portugal.
Industry Expanded by Record 7% in 2006
The figure means the country topped the so far highest industrial growth on record, posted in
2004, by 0.6 percentage points
Slovenia's industrial output increased by a record 7% in 2006, according to the national
Statistics Office. The figure means the country topped the so far highest industrial growth on
record, posted in 2004, by 0.6 percentage points.
The 2006 growth was generated by a 7.5% increase in output in manufacturing and a 8.8
percent rise in volumes posted in mining, while output in the sector electricity and gas supply
dropped by 0.9%.
The volume of production of capital goods surged by 12.3% in 2006 over 2005, while the
output of intermediate goods rose by 6.5% and that of consumer goods by 4.8%.
Considering the standard qualification of industries, growth was most robust in mining and
quarrying (up 21.7%), the production of electrical and optical equipment (up 15.8%),
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chemicals, chemical products and artificial fibers (up 13.2%) and the production of metals and
metal products (up 12.3%).
On the other hand, a decrease was recorded in the output of coke and oil derivatives (down
6.4%), vehicles and vessels (down 3.8%), textiles, leatherwear, fur products and clothing
(down 2.9%), and food and beverages (down 2.4%).
December output was down 15.8% over November, mainly as a result of Christmas holidays,
while the deseasoned index shows a slight increase of 0.4%.
10
FINANCE
Slovenian Export Bank Signs Deal with German Banking Group
The deal will foster cooperation in promoting economic, industrial and financial links
between companies in Slovenia, Germany and the EU
The Slovenian Export and Development Bank has signed a cooperation agreement with the
German banking group Kreditanstalt fuer Wiederaufbau. The deal will foster cooperation in
promoting economic, industrial and financial links between companies in Slovenia, Germany
and the EU, the bank said in Ljubljana on Tuesday, 6 February.
The deal, signed last Wednesday, 7 February, moreover gives the basis for strengthening
cooperation in investment, project, export and development financing, the bank added.
The Slovenian Export and Development Bank on 1 January succeeded the former Slovenian
Export Corporation, which was set up in 1992 as a financial institution for insurance and
financing of exports.
The main activities of the Frankfurt-based Kreditanstalt fuer Wiederaufbau meanwhile
include promoting and facilitating economic, social and environmental development in
Germany, Europe and globally.
Hypo Alpe-Adria-Bank Doubles Net Profit in 2006
Hypo Alpe-Adria-Bank, the Slovenian subsidiary of the Austrian Hypo Group Alpe Adria,
posted a net profit of EUR 6.5m for 2006
Hypo Alpe-Adria-Bank, the Slovenian subsidiary of the Austrian Hypo Group Alpe Adria,
posted a net profit of EUR 6.5m for 2006, up 103% over the year before, on the back of
strong growth in loans.
Total assets increased by 34% to EUR 1.13bn, which gave it a market share of 3.5% and
placed it among the ten biggest banks in Slovenia, the bank said in a press release on Tuesday,
6 February.
Outstanding loans totalled EUR 892.2m, an increase of 41% over the year before.
Loans to retail customers increased by 56% to EUR 229.4m, of which 91% were long-term,
mostly housing loans.
The bank says it captured 11% of the market for housing loans last year.
Loans to companies were up 36% to EUR 662.8m.
Government Moves to Lift Restriction on Wage Growth
The Slovenian government is proposing to lift a restriction that has kept wage growth one
percentage point below productivity gains for the past several years
The Slovenian government is proposing to lift a restriction that has kept wage growth one
percentage point below productivity gains for the past several years. "The cap was necessary
as long as we had to keep inflation down. Now it is no longer needed," Janez Sustersic, the
head of the Institute for Macroeconomic Analysis and development (IMAD), told STA.
The government therefore proposes that salaries grow with inflation and productivity over the
medium term. However, the pace of growth must also allow for the creation of new jobs and
the preservation of competitiveness in the eurozone, Sustersic said on Tuesday, 6 February.
Sustersic points out that all elements need to be taken into account: the mid-term nature of the
measure, concordance with trends rather than actual rates of growth, the need for new jobs
and the retention of competitiveness.
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According to him, the conformity with productivity gains would be checked every five years,
which roughly corresponds to one economic cycle. That way wages would grow slower in
periods of sluggish growth and faster when the economy is booming.
The system needs to be designed so that it prevents wages from growing faster than
productivity. To preclude that, wages would also be harmonised across sectors and at
company level; at the national level only an agreement that preserves the real value of salaries
would be put in place, he said.
The proposal was also put to the social partners at yesterday's negotiations on a new social
agreement. The stakeholders were unable to find common ground as company representatives
believe productivity should be brought into the equation at company level, while trade unions
insist on a general formula.
Banks Start Cutting Commission for Coin Deposits
Slovenian banks started cutting commission for coin deposits after they came under fire from
companies which mainly operate with coins for the exorbitant fee
Slovenian banks started cutting commission for coin deposits after they came under fire from
companies which mainly operate with coins for the exorbitant fees.
After a thorough analysis, Slovenia's largest bank NLB decided to reduce the fee from 4% to
2%. The bank started charging lower fees at the beginning of this week, the bank said on
Tuesday, 6 February.
Abanka reduced the commission fee from 4% to 1.9% already on 1 February. On the contrary,
Banka Celje will raise the fee on Monday, 5 February - from 0.27% to 1.86%.
Gorenjska banka has still not decided to decrease the commission fee, which currently stands
at 4%. The bank told STA that it would change the fee if it found grounded reasons for that.
Most banks raised the fees from 0.25% to 4% prior to the 1 January euro adoption, but the
impact was not as big when the tolar was still in circulation and coins had a much lower
value.
The Chamber of Commerce and Industry of Slovenia (CCIS) warned at the end of January
that the fees mainly affected small companies that mostly operate with coins, such as
confectioneries, taxis and vending machine operators.
Euro Adoption Went Smoothly, Government Agrees
The euro changeover in Slovenia was carried out without problems and according to plans
The euro changeover in Slovenia was carried out without problems and according to plans,
the government agreed at a session on Wednesday, 7 February. This proves that the
preparations for the adoption of the euro were thorough, says the report on the euro switch
adopted by the cabinet.
The report, prepared by the task force overseeing the technical preparations for the adoption
of the euro, says that Slovenia responded to problems fast and solved them immediately.
In banks the introduction of the euro went smoothly and the euro act was implemented
without complications, the report adds.
The report is divided into two parts. The first part analyses the preparations which took place
before the big bang switch on the 1 January, while the second part examines the two week
phase of dual circulation.
The report was also presented today to the board of governors of Banka Slovenije, Slovenia's
central bank.
Meanwhile, an independent report also confirmed the view that Slovenia adopted the euro
flawlessly.
In its report for February, the international rating firm Dun&Bradstreet (D&B) said the switch
was carried out excellently and without hiccups.
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Warsaw Stock Exchange Eyeing LJSE
The Warsaw Stock Exchange is interested in purchasing 70% of Ljubljanska borza
The Warsaw Stock Exchange is interested in purchasing 70% of Ljubljanska borza, the
manager of the Ljubljana Stock Exchange (LJSE), the Warsaw Stock Exchange told STA on
Wednesday, 7 February.
The details of the offer will be presented by the executive director of the Warsaw Stock
Exchange, Ludwik Sobolewski, who will meet the management of Ljubljanska borza in
Ljubljana on Friday, 9 February.
With 285 companies listed, the Warsaw Stock Exchange is one of the biggest stock exchanges
in Eastern Europe. At the end of 2006, market capitalisation at the Warsaw Stock Exchange
amounted to EUR 120bn.
Ljubljanska borza is already a takeover target of Swedish group OMX, which launched a bid
in December.
However, OMX's offer of EUR 125.19 per share has been viewed by the owners of
Ljubljanska borza as inadequate.
The biggest shareholders of Ljubljanska borza are the Probanka bank with a 9.91% share,
Nova Ljubljanska Banka with a 6.2% share, and Nova Kreditna Banka, Moja delnica, Abanka
and AC-SIN with stakes of 5.75% each.
Slovenia Got EUR 393M in EIB Loans in 2006
The data shows Slovenia got a total of EUR 1.191bn in EIB loans in the past five years, or 0.6
percent of the total provided to EU member states
The European Central Bank (EIB) provided EUR 393m in loans to Slovenia in 2006, which is
up 0.3% over last year and represents 1% of all loans to EU member states that year. The data
was released by the bank in Brussels on Thursday, 8 February.
The data shows Slovenia got a total of EUR 1.191bn in EIB loans in the past five years, or 0.6
percent of the total provided to EU member states.
The lion's share of this year's loan (EUR 300m) went to the national motorway company
DARS for the construction of five new motorway sections.
The country's largest commercial bank, Nova Ljubljanska banka, borrowed EUR 50m for the
financing of small- and medium-sized companies, while a further EUR 43m went to power
company Holding Slovenske elektrarne for the construction and management of new
hydroelectric power plants on the lower Sava, i.e. Blanca and Krsko.
In 2006, the EIB provided a total of EUR 39.85bn in loans to all EU member states, of which
EUR 4.963bn went to the ten newcomers of 2004. Most of this was allocated for Poland
(EUR 2.031bn), Hungary (EUR 1.160bn) and the Czech Republic (EUR 959m), followed by
Slovenia.
Ljubljana Stock Exchange
While blue chips mainly ended the week in the red, the lesser known items generated growth,
pushing the main market SBI 20 index 24.56 points (0.34%) higher to 7,282.22 points
While blue chips mainly ended the week in the red, the lesser known items generated growth,
pushing the main market SBI 20 index 24.56 points (0.34%) higher to 7,282.22 points. The
SBI TOP index of the six biggest blue chips shed 7.09 points (0.42%) to 1,691.72.
With only four trading days in the week – Thursday, 8 February was a holiday in Slovenia brokers concluded deals worth EUR 41.14m, 35% of that coming in block trade.
Food and pasta maker Zito was the winner of the week, adding 10.58% to EUR 218.45. It was
followed by port operator Luka Koper (+7.88% to EUR 62.13) and retailer Emona Obala
(+2.96% to EUR 7.3).
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Shareholders of food company Droga Kolinska meanwhile witnessed their share plummet by
5.83% to EUR 18.75. Also ending the week in the red were telco Telekom Slovenije (-1.63 to
EUR 351.41) and retailer Mercator (-1.36% to EUR 236.27).
Pharma company Krka, the most popular share in the week with a turnover of EUR 10.18m,
shed 0.42% to EUR 913.32.
Energy company Petrol meanwhile managed to edge 0.12% higher to EUR 576.54 on a
turnover of EUR 3.26m.
Investment firms ended the week in the black, pushing the PIX investment fund index 21.3
points (0.37%) higher to 5,714.83.
The BIO bond index continued to slide, shedding 0.17 points (0.14%) to 118.4.
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REGIONAL INFORMATION
Ljubljana Flat Prices Up 18% in 2006
Prices of three-bedroom flats in Ljubljana rose the most, by 18.9%, while those of studios
gained the least, 14.6%
Prices of flats in the Slovenian capital rose by 18% on average in 2006, according to a study
of advertised prices on the Slonep.net real estate portal.
Prices of three-bedroom flats in Ljubljana rose the most, by 18.9%, while those of studios
gained the least, 14.6%.
Two-bedroom flats were 18.8% dearer and bigger apartments gained 18.3% on average, while
prices of one-bedroom flats were up 17.2%.
According to Slonep.net figures, prices of all flats but studios rose at the fastest rate since
1995.
The average price of a square metre of a flatlet in Ljubljana stood at EUR 3,105, studio EUR
2,853, one-bedroom flat EUR 2,553, two-bedroom flat EUR 2,442, three-bedroom flat EUR
2,574 and for flats with more than three bedrooms EUR 2,624.
Slonep.net says there has been no letup in the rise of flat prices in Ljubljana since 1995.
Meanwhile, prices of large flats rose even faster on the outskirts of Ljubljana, where flats of
more than four bedrooms were 23% dearer than in 2005, yielding an average price of EUR
1,659 per square metre.
Prices of studios on the outskirts of Ljubljana also rose faster than in the city itself, with
Slonep.net registering a 18.1% rise (EUR 2,269 per sq. metre).
However, prices of other apartments on the outskirts of Slovenia's capital rose slower than in
the city. Unusually, three-bedroom apartments were cheaper by 3.8% on average compared to
2005, with prices standing at EUR 1,508 per sq. metre.
The survey found that flats were most expensive in Ljubljana, on the coast, on the outskirts of
Ljubljana and in the region of Gorenjsko, north of Slovenia's capital.
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BRANCH INFORMATION
Electricity Consumption up 2.7% in 2006
Electricity consumption in Slovenia increased 2.7% year-on-year in 2006, totalling 13.14
billion kWh
Electricity consumption in Slovenia increased 2.7% year-on-year in 2006, totalling 13.14
billion kWh. This is 1% more than originally expected, but still below some projections
thanks to lower-than-expected consumption in the last two months of the year, grid operator
ELES said on Monday, 5 February.
Slovenian power plants produced 13.13 billion kWh of electricity. This includes the entire
production of the Krsko Nuclear Power Plant, which however sends half of its output to
Croatia, the co-owner of the plant.
Hydro power plants produced 3.12 billion kWh of power last year, with the N-plant and other
thermal power plants accounting for the remaining just over 10 billion kWh.
Electricity imports totalled 7.18 billion kWh, up 23% on the year before. Exports, including
the power sent to Croatia, were just below 6.9 billion kWh, an increase of 15%.
ELSE expects demand for power to increase this year. However, it is confident that there will
be no major problems securing the necessary supplies.
Government to Channel Extra Funds for Fixing Dilapidated State Roads
The Ministry of Transport is to spend EUR 480m on transport projects this year
The Ministry of Transport is to spend EUR 480m on transport projects this year, with nearly a
half of that going for the construction, maintenance and management of state roads, Transport
Minister Janez Bozic told the press on Tuesday, 6 February.
According to Bozic, the total sum for transport projects exceeds that of last year by 17%.
Given the poor state of state road infrastructure 47% of investment funds is to be channelled
to the Agency for Roads, he added.
A total of EUR 149m is to be used for investment in new state road network infrastructure and
another EUR 62m for maintenance of the network, Bozic said.
Bozic said that nearly 45% of the state road infrastructure was in poor shape, which had
prompted the ministry to act by providing more funds than in the previous year. This was
made possible by cutting the funding for motorway projects, he explained.
"Motorway projects are to get a mere EUR 13m this year, with more money coming from
(EU) cohesion funds," said Bozic.
DARS, the national motorway company, has also been busy taking out loans which it intends
to pay with revenues from tolls.
The plan for this year includes the completion of 17.7 km of motorways and 2.3 km of slip
roads as well as work on a further 102 km of motorways, 18.7 km of freeways and 5 km of
slip roads, said Bozic.
Meanwhile, railway projects are to get EUR 164m this year, of which EUR 32m will come
from EU funds.
A total of 35 projects are planned for this year in railway infrastructure: EUR 111.1m is to go
for international projects and EUR 45.3m for domestic projects, with the single biggest
investment being the connection between Koper and Ljubljana and on to the Hungarian
border.
Moreover, Bozic said that funds have been earmarked for a feasibility study for a line
between the hub of Divaca in southwestern Slovenia and the Italian port city of Trieste.
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Construction works on this connection are scheduled to begin in 2009 and to be completed by
2015, said Bozic, who added that both Slovenia and Italy are interested in a speedy
construction of the connection.
"Slovenia will push ahead with the planned timetable whereby it would like to first connect
Divaca and Koper," said Bozic.
Government Confirms New Tourist Slogan, Rejects Logo
The government endorsed the new tourist slogan for Slovenia, "I Feel Slovenia"
The government on Wednesday, 7 February endorsed the new tourist slogan for Slovenia, "I
Feel Slovenia", but rejected the new logo, which had come under fire from graphic designers.
The Government PR and Media Office was told to seek an emblem on the basis of the slogan,
while the Economy Ministry will be tasked with building an entire brand.
Gregor Krajc, the head of the Media and PR Office, said the slogan had been much better
accepted by focus groups in Slovenia and abroad than the logo.
He said that the slogan already contains certain elements of a logo, so it will be adapted to the
extent that a new logo will not have to be sought.
"I Feel Slovenia" (with LOVE in bold) is the work of the agency Nuit, which got the idea
from the Donna Summer song "I Feel Love".
The logo was a blue, red and white combination of Mount Triglav, Slovenia's highest
mountain, and a stylised heart-shaped linden leaf. The linden tree is considered as a symbol of
Slovenian culture.
The selection was criticised by the Designers Association of Slovenia, which said the whole
procedure had been amateurish and the award in the public competition EUR 2,921 too low to
attract good designers.
Classical Lipizzaner Should Be Preserved, Farm Directors Agree
Leading European Lipizzaner stud farms agree that breeding programmes should be
harmonised and that the classical type of the Lipizzaner should be preserved
Leading European Lipizzaner stud farms agree that breeding programmes should be
harmonised and that the classical type of the Lipizzaner should be preserved, director of the
Lipica Stud Farm Matjaz Pust said on Wednesday, 7 February after a two-day meeting of
Lipizzaner stud farms directors.
The Hungarian stud farm, officials of which were unable to participate in the event that was
attended by the directors from Slovenia, Austria, Croatia and Slovakia, also supports joint
approach to the breeding and selection of horses, Pust said.
In the last 100 years many types of Lipizzaners have evolved. The original Lipizzaner was
only preserved in Austria and Slovenia, Lipizzaner expert Ivan Urbas told the press following
the first meeting of state-run Lipizzaner stud farm directors.
In his opinion the Lipizzaner should preserve the "nature of the baroque type of horse with
qualities and typical characteristics of the breed".
The Copernicus research project, which is aimed at unifying the standards for the Lipizzaner
horses, said that the Lipica stud farm is the generic origin of all the Lipizzaner lines, Urbas
added.
Lipizzaners take their name from the village of Lipica (Italian: Lipizza) where they have been
bred since the 16th century. In 1580 Archduke of Austria Charles II bought a stud farm and a
deserted mansion in Lipica.
The task of the original, royal stud farm of Lipica was to breed elegant cart and saddle horses
for the Hapsburg court and the Spanish Riding School in Vienna.
Six national Lipizzaner stud farms in Slovenia, Croatia, Austria, Slovakia, Hungary and Italy
are home to 1200 Lipizzaner white horses. The Lipica Stud Farm has around 370 horses.
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Slovenian Small Shareholders Present Pioneering IT Solution
A delegation of the Slovenian Small Shareholders' Association presented an IT solution that
should improve the status of small shareholders by allowing e-voting in annual general
meetings
A delegation of the Slovenian Small Shareholders' Association presented on Friday, 9
February an IT solution that should improve the status of small shareholders by allowing evoting in annual general meetings.
The project, presented in Brussels by the president and vice-president of the association,
Kristjan Verbic and Ludvik Toplak, will be discussed in greater detail by the general
assembly of Euroshareholders that is most likely to take place in Slovenia on 15 February
next year.
Verbic also held talks with Jean-Pierre Paelinck, secretary general of Euroshareholders, who
said that the Slovenian association would play a very important role in making small
shareholders more visible.
Verbic stressed that such meetings presented a chance to influence European legislation to
adequately protect the interests of small shareholders.
The Slovenian association was present at the meeting for the first time as a full member of
Euroshareholders. It was given full membership status in September last year.
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COMPANIES
Slovenian Telco Loses Out in Bidding for Kosovo Mobile License
The Kosovo Agency for Telecommunications announced that the Kosmocel consortium made
the best bid
Telco Telekom Slovenije has lost out in bidding for the second mobile operator license in the
province of Kosovo. The Kosovo Agency for Telecommunications announced on Tuesday, 6
February that the Kosmocel consortium made the best bid.
Telekom Slovenije was bidding through its Kosovo subsidiary Ipko.net, which already holds
fixed line and broadband internet licenses in the province.
The Kosovo Ministry of Transport, Post and Telecommunications published the call for bids
in late October, setting EUR 20m as the lowest price for the 15-year license. Bidding was
open until 17 January.
According to Serbian media, the chair of the Agency for Telecommunications Anton Berisha
told the press that the commission assessed Kosmocel's bid as the best of the four valid bids.
Apart from Telekom Slovenije and Kosmocel, valid bids were also entered by Austria's
Mobilkom and Team Kosovo, while there were also two invalid bids filed.
The Kosmocel consortium is made up of Kosovo companies Dukadjini and Kuites as well as
an unnamed Italo-American company, Serbian press agency Beta reports.
This was the second time Kosovo authorities had held a call to tenders for the second mobile
license, with the initial selection process annulled after having been won by Telekom
Slovenija's mobile arm Mobitel and local partner Mobikos.
The reason for the annulment was "serious flaws" in the selection process that were
supposedly established in an independent audit.
Hermes Softlab Launches Second Development Company in BiH
The company based in Banjaluka will develop software and provide e-solutions
Hermes Softlab, a leading Slovenian software company, has established its second
development unit in Bosnia-Herzegovina. The company based in Banjaluka will develop
software and provide e-solutions, the company said in a press release on Wednesday, 7
February.
Hermes Softlab Banjaluka will employ ten development engineers who will produce software
solutions for international clients, the release says.
The company will also offer e-solutions for the local market, including the public
administration, telecommunication companies, financial institutions and large corporations.
The company's aims in the Republic of Srpska, the Serbian entity in Bosnia-Herzegovina, are
to boost growth on the local IT solutions market and to become an important supplier for
telecommunication companies and other institutions.
"Hermes Softlab Banjaluka will focus on exports and will also be an important partner for our
clients in the Republic of Srpska", said Peter Testen, the chairman and executive director of
Hermes Softlab.
Hermes Softlab already has a subsidiary in Sarajevo, which employs more than 100 software
experts. That subsidiary generated exports in excess of EUR 4m in the last four years.
ACH Conglomerate Acquires 52% of Mobile Service Provider Debitel
ACH conglomerate, formerly known as Autocommerce, signed an agreement with German
holding Debitel Konzernfinanzierungs GmbH on the acquisition of a 52% share in Slovenian
mobile services provider Debitel Telekomunikacije
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ACH conglomerate, formerly known as Autocommerce, signed an agreement with German
holding Debitel Konzernfinanzierungs GmbH on Wednesday, 7 February on the acquisition
of a 52% share in Slovenian mobile services provider Debitel Telekomunikacije, ACH said on
the Ljubljana Stock Exchange's website.
With this acquisition ACH's stake in the company increased from 36% to 88%. According to
a shareholder agreement between the German company and Autocommerce, ACH had a preemptive right to the acquisition of the majority stake, which was put up for sale in November.
ACH decided to purchase the stake because the company had been operating well since its
establishment, it is not in the red and is still growing, ACH said.
In 2005 Debitel generated EUR 23m in sales revenues. The company has a good distribution
network, which allows expansion to other markets, potential for introduction of new services
which open further possibilities for growth, ACH added.
We are convinced that Debitel Telekomunikacije has a bright future under the wing of ACH,
said Debitel Konzerfinanzierungs chairman Axel Rueckert.
Debitel has some 95,000 subscribers in Slovenia, holding a 5% market share. Since it does not
have its own network it uses the infrastructure of the market leader, Mobitel.
Orbico Publishes Takeover Bid for Emona Obala
Wholesaler Orbico published a takeover bid for Emona Obala, offering EUR 7.5 per share of
the Koper-based wholesaler and retailer
Wholesaler Orbico published on Friday, 9 February a takeover bid for Emona Obala, offering
EUR 7.5 per share of the Koper-based wholesaler and retailer. Orbico had pledged to publish
the offer after it acquired more than 50% of the struggling company in an auction in midJanuary.
The offer for the 863,872 shares is valid until 9 March and will be successful regardless of the
number of shares obtained.
The development comes after Orbico bought on 18 January 877,854 shares in the cashstrapped Emona Obala, giving it a stake of 50.39%.
Orbico paid EUR 7.5 per share at the time, which put the value of stake acquired from
investment companies Modra linija, Primorski skladi and Interfin as well as the state-run
Restitution Fund (SOD) in an auction at EUR 6.6m.
The price paid by Orbico was three-fold the value of Emona Obala's shares prior to the
announcement of the acquisition.
Emona Obala is in the midst of restructuring aimed at getting the company out of the red. In
2005 its losses stood at EUR 3.15m on net sales revenues of EUR 50m.
As part of the efforts, the company recently put its loss-making Noc in Dan chain of roundthe-clock convenience stores up for sale.
Orbico told STA at the time that the company saw Emona Obala as having more pluses than
minuses despite being in the red.
Orbico, located in Ljubljana but in Swiss-Croatian ownership, generated revenues of EUR
37.2m in 2005. It finished the year with a profit of over EUR 1m.
SLOVENIA IN BRIEF
Ziga Turk Nominated for Development Minister
Prime Minister Janez Jansa on Monday, 5 February nominated Ziga Turk, the chairman of the
Telekom Slovenije supervisory board, for development minister without portfolio pending
approval in parliament. Born in 1962, Turk is a professor of construction informatics at the
Faculty of Civil and Geodetic Engineering at the University of Ljubljana.
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Slovenian and Italian Faculties Launch Cooperation
The Faculty of Foreign Languages from Udine and the Faculty of Slovenian Studies from
Nova Gorica signed on Monday, 5 February an agreement on cooperation in language
teaching and student and teacher exchange, the institutions' officials told the press in
Dobrovo.
Interior Ministry to Focus on Schengen, EU Presidency in 2007
The Interior Ministry will focus this year on preparations for Slovenia's entry into the
Schengen no-border zone, scheduled for 31 December, and on cooperation with Germany and
Portugal prior to Slovenia's stint as EU president in the first half of 2008, Interior Minister
Dragutin Mate told the press on Tuesday, 6 February.
Ambassador to Israel Relieved of Duties Ahead of Minister Naming
The government relieved of duty on Wednesday, 7 February Slovenian ambassador to Israel
Iztok Jarc, the Government Media and PR Office said. Jarc, who became ambassador to Israel
in 2004, was relieved of duty because he was nominated for the post of minister of
agriculture, forestry and food.
Preseren Awards Conferred as Slovenia Celebrates Culture
Composer and pianist Janez Maticic and actor Radko Polic-Rac received the coveted Preseren
Prize for life-time achievement in the arts at a ceremony on Wednesday, 7 February, the eve
of Culture Day, a national holiday that pays tribute to Slovenia's greatest man of letters,
France Preseren (1800-1849).
Vice-Governor Nominated for Top Job at Central Bank
President Janez Drnovsek on Friday, 9 February nominated Andrej Rant, the vice-governor of
Banka Slovenije and member of the Governing Board, for the top post at the Slovenian
central bank. Pending approval by parliament, Rant will take office on 1 April.
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