Slovenia Business Week no. 18, May 14, 2007
Table of Contents:
HEADLINES ............................................................................................................................. 3
EU Forecast for Slovenia: Stable Growth and Less Investment ............................................ 3
Exports Surge 18.3% in March .............................................................................................. 3
Second Largest Slovenian Bank to Be Listed by End of 2007 .............................................. 3
INTERNATIONAL COOPERATION ...................................................................................... 5
Rupel Visits Palestinian Territories ........................................................................................ 5
FM Rupel Meets Palestinian President, Foreign Minister ..................................................... 5
Bulgaria and Slovenia Launch Cooperation in Transport ...................................................... 5
Bulgarian Minister Calls for Better Ties Between Seaports .................................................. 6
Arab Peace Initiative in Centre of Rupel's Visit to Egypt ...................................................... 7
Agriculture Minister Visits Serbia ......................................................................................... 7
Slovenia and China Mark 15 Years of Diplomatic Ties ........................................................ 8
Minister Agrees on Cooperation with Serbian Province ........................................................ 8
EUROPEAN UNION ................................................................................................................. 9
Slovenia Receives First Warning over Discriminatory Taxation ........................................... 9
Lisbon Goals Link Between Slovenian, Portuguese EU Presidency ..................................... 9
Official: Slovenia Has Not Taken a Position on EU-Wide Tax ............................................. 9
Government Responds to EU's Warning Over Health Insurance ........................................ 10
Slovenia to Contribute to EU Energy Supply Warning Scheme .......................................... 11
Slovenian EU Presidency Tops Health Commissioner's Meeting ....................................... 11
Jansa: Slovenia Supports Efforts of SE Europe ................................................................... 12
PM Says Situation Favours June Breakthrough in EU Crisis .............................................. 12
LEGISLATION ........................................................................................................................ 14
Government Amends Investment Funds Act ....................................................................... 14
STATISTICS/FORECASTS .................................................................................................... 15
Commission too Pessimistic about Slovenian Growth, Minister Says ................................ 15
Slovenia Loses One Spot on IMD Global Competitiveness Rankings ................................ 15
Industrial Output Up 15.4% in March .................................................................................. 16
Economy Institute Confident of Continued Strong Growth................................................. 16
FINANCE................................................................................................................................. 17
Economist Calls for More Effective Curbing of Public Deficit ........................................... 17
Survey: Slovenian Banks Behind in Customer Service ....................................................... 17
New Petrol Prices ................................................................................................................. 17
Zavarovalnica Maribor to Enter Croatian Market By Year-End .......................................... 18
Participants Say Financial Market Act to Hit Free Market .................................................. 18
Economists Support Floating of NKBM .............................................................................. 19
Ljubljana Stock Exchange .................................................................................................... 19
BRANCH INFORMATION .................................................................................................... 21
Slovenia Mulling Settlement over Excessive Farm Subsidies ............................................. 21
EUR 734.5m Motorway Construction Plan Gets Unanimous Support ................................ 21
Tourism Council to Encourage New Air Routes ................................................................. 22
Slovenia to Get Additional EUR 12m for Sugar Reform ..................................................... 22
Slovenia Needs to Double its Irrigated Farmland ................................................................ 22
COMPANIES ........................................................................................................................... 24
Microsoft Slovenija Gets New General Manager ................................................................ 24
Slovenian Company to Build Galvanizing Plant in Vojvodina............................................ 24
Serbian Flag Carrier to Launch Belgrade-Portoroz-Rome Route ........................................ 24
Power Utility HSE Posts 2006 Net Profit of EUR 77.6m .................................................... 25
MBO Bid Launched at Plastics and Steel Fittings Maker .................................................... 25
Apparel CEO Leaving Mura after Five Years ..................................................................... 25
FAIRS, CONGRESSES ........................................................................................................... 27
Internautica Boat Fair Raises Anchor .................................................................................. 27
SLOVENIA IN BRIEF ............................................................................................................ 28
Rupel Stresses UN's Key Role in Fighting Terrorism.......................................................... 28
Environment Minister Ends Gas Terminal Speculations ..................................................... 28
Government Appoints Peter Jesovnik Acting Head of Investment Agency ........................ 28
Government Adopts Bill on Privatisation of Trade Union Property .................................... 28
Labour Committee Confirms Motion on Foreign Labour .................................................... 28
Minister Calls for Social Protection of Immigrants in EU ................................................... 28
2
HEADLINES
EU Forecast for Slovenia: Stable Growth and Less Investment
Slovenia's gross domestic product (GDP) growth will slow down from 5.2% in 2006 to 4.3%
this year and 4% in 2008
Slovenia's gross domestic product (GDP) growth will slow down from 5.2% in 2006 to 4.3%
this year and 4% in 2008, as a result of lower investment spending, the European Commission
says in the Spring Forecast which was released in Brussels on Monday, 7 May.
The Commissions believes that the cooling off will substantially decrease investment for
companies. However, booming construction will retain the level of investment in fixed assets.
Construction of buildings will continue strongly until 2008, when the transitional period that
Slovenia got for keeping a lower VAT rate (8.5%) for new flats runs out. The country is also
planning to spend heavily on motorways.
The Commission expects Slovenia's unemployment rate to edge down to 5.8% this year and
5.6% in 2008 (6% in 2006), while the forecast for 2008 for the EU 27 stands at 6.7% and for
the euro area at 6.9%. Such a decrease is the result of the positive impact of stable growth on
the labour market.
The projection for the general government deficit is 1.5% of GDP for this and next year,
which is slightly up from 1.4% in 2006. This means that Slovenia's deficit will be about 0.5
percentage points above the euro area average, which is forecast at 1% of GDP this year.
The annual inflation rate will meanwhile rise from 2.5% in 2006 due to higher oil costs and
the liberalisation of the energy and gas markets, which could add 0.8 percentage points to the
inflation.
The main risk that could jeopardise the forecasts is the uncertainty surrounding the effect of
tax reforms, the Commission warns in the report. The reforms could increase or decrease the
budget revenues, however the debt is expected to stay stable, below 30% of GDP.
Exports Surge 18.3% in March
Slovenian exports surged 18.3% year-on-year in March standing at EUR 1.77bn
Slovenian exports surged 18.3% year-on-year in March standing at EUR 1.77bn. The growth
in exports far outpaced that of imports, narrowing Slovenia's trade gap, the Statistics Office
said on Thursday, 10 May.
According to preliminary figures from the office, Slovenia's trade gap in March stood at EUR
78.3m, down from the EUR 86.6m in February. Imports amounted to EUR 1.84bn in March,
up 12.1% over the same month last year.
Exports to EU member states were worth EUR 1.24bn in the month, up 17.7% year-on-year,
while exports to other markets amounted to EUR 521m, up 20%. Slovenia imported EUR
1.46bn worth of goods from the EU, which is up 8.2% year-on-year, while imports from other
countries rose by 27.8% to EUR 380m.
Second Largest Slovenian Bank to Be Listed by End of 2007
According to Bajuk, 49% of the bank will be floated and is expected to land in the hands of
institutional investors
Nova Kreditna banka Maribor, Slovenia's second largest bank, is to be listed on the Ljubljana
Stock Exchange before the year end, Finance Minister Andrej Bajuk told the press in
Ljubljana on Friday, 11 May. According to Bajuk, 49% of the bank will be floated and is
expected to land in the hands of institutional investors.
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Presenting the plan for the privatisation of the bank, Bajuk added that a banking and insurance
holding will be created around the NKBM in a year and a half. The holding is to include
insurers Zavarovalnica Maribor, Tilia and reinsurer Pozavarovalnica Sava and will be based
in Maribor.
The finance minister also said that the privatisation and creation of the holding needed to take
place at the same time, as the NKBM owned 50% of Zavarovalnica Maribor and the cabinet
wanted the procedure to be transparent.
The remaining 51% of the NKBM will remain on ice for the time being. As the bank is one of
Slovenia's key financial institutions, the state wants to keep a 25% stake plus one share, Bajuk
said.
The sale of the 49% stake will begin at once and should be completed by the end of the year
at the latest. It will be carried out through a public offering, the first case of such a procedure
in Slovenia, he said.
The bank has 2.2 million shares and Bajuk believes that the state could get 2.5 to 3 times the
price of the book value of NKBM, which stood at EUR 97.17 at the end of March, according
to the bank's data.
The financial adviser on the sale will be the US-based Citigroup banking group and a due
diligence of the group is expected to be launched in the coming days.
The NKBM will be listed on the stock market at the same time as the 49% stake is sold,
however, the 51% stake will not be put up for sale.
Te plan also calls for a merger of the three insurers which would then specialise in life
insurance, property insurance and reinsurance.
The government discussed the privatisation programme on Thursday, 10 May, when it
decided that it needed amendments. Government spokesperson Valentin Hajdinjak told the
press that Bajuk would outline the finalised programme in the coming days.
The state currently holds a 90% stake in the NKBM.
4
INTERNATIONAL COOPERATION
Rupel Visits Palestinian Territories
Foreign Minister Dimitrij Rupel continued his tour of the Middle East
Foreign Minister Dimitrij Rupel continued his tour of the Middle East on Monday, 7 May
with his first ever visit to the Palestinian territories. Rupel met in Ramala Minister of
Information Mustafa Barghouti, MP Hannah Ashrawi and civil society representatives, saying
that Slovenia alone lacked the power to change the "difficult situation" there.
Barghouti expressed the hope that the EU would help negotiate a solution to the IsraeliPalestinian dispute that would lead to the formation of two states.
Speaking to the press after the meeting, Barghouti said he hoped Rupel would be able to pass
on to the EU and to Slovenia a clear image of the situation and explain "how urgent an end to
the occupation of the Palestinian territories is".
Rupel told the press that "the situation is not simple, with Slovenia alone not being in the
position to change it". He added however that "the EU had certain means, the power and
possibilities to influence the final result of the conflict".
Rupel moreover explained that his tour was "a part of a learning process", as Slovenia was
interested in entering its EU presidency with as much knowledge as possible.
He added that the talks with Israeli representatives and his meetings with the Palestinians led
him to the conclusion that "there is a light" at the end of the tunnel. "If Slovenia succeeds in
changing things in the EU for the better, we will of course be very satisfied."
Earlier in the day, Rupel met MP Hannah Ashrawi and civil society representatives, who said
that help from abroad would be very welcome in the resolution of the conflict. Ashrawi
highlighted as a good opportunity the recently revived Arab peace initiative.
FM Rupel Meets Palestinian President, Foreign Minister
Slovenian Foreign Minister Dimitrij Rupel heard calls for an end to the blockade of the
Palestinian authorities as he met Palestinian President Mahmoud Abbas and Foreign
Minister Ziad Abu Amr o as part of his tour of the Middle East
Slovenian Foreign Minister Dimitrij Rupel heard calls for an end to the blockade of the
Palestinian authorities as he met Palestinian President Mahmoud Abbas and Foreign Minister
Ziad Abu Amr on Monday, 7 May as part of his tour of the Middle East.
"I don't see a reason why the blockade should continue," Abu Amr told the press after the
meeting. He expressed the hope that EU members would cooperate with the entire Palestinian
government of national unity, not just individual ministries.
Abu Amr said the Palestinian government realised that it had to fulfil the demands of the
international community, but it believed it had already met them.
Only the second EU foreign minister to visit Gaza, Rupel was quizzed by journalists why he
did not met Palestinian Prime Minister Ismail Hania, a member of the Islamic Hamas.
Rupel said he had met Abbas, Abu Amr and Minister of Information Mustafa Barghouti and
added that "what has not happened so far can still happen in the future."
Rupel said he had decided to visit Israel and the Palestinian Territories because Slovenia
wants to be informed by both sides as it assumes the rotating EU presidency in 2008.
Bulgaria and Slovenia Launch Cooperation in Transport
Bulgarian Transport Minister Peter Moutafchiev visited Slovenia
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Bulgarian Transport Minister Peter Moutafchiev visited Slovenia on Tuesday, 8 May in what
his Slovenian counterpart Janez Bozic labelled as the beginning of cooperation between the
countries in transport.
The pair of ministers agreed that the two countries would exchange haulage permits within a
fortnight. The countries will agree future quotas as part of joint commission by June, Minister
Bozic said after the talks.
According to him, the ministers also agreed to form working groups within both ministries to
look for options for cooperation in railway transport. This is expected to involve crafting a
common proposal for the third railway package.
Bozic also said that both countries were keen to launch scheduled flights between both
capitals as soon as possible. With that aim in mind, the ministers agreed to put the head of the
Transport Ministry Aviation Directorate, Franc Zeljko Zupanic, in charge of establishing
contacts between both sides.
Bozic and Moutafchiev also discussed the 10th pan-European transport corridor, connecting
Salzburg and Thessaloniki, which the pair labelled as a priority for both countries. "We expect
the 10th corridor to contribute considerably to the stability of countries in the Western
Balkans," the Bulgarian minister said.
Bozic lobbied with his Bulgarian opposite number for support for Slovenia's bid to host the
seat of the supervisory authority for the Galileo satellite navigation system. Slovenia is one of
ten EU countries vying for the seat.
"Moutafchiev voiced support within his powers, assuring me that mutual interests would be
respected," Bozic said and explained that Bulgaria too was a candidate to host a seat of an EU
institution dealing with maritime affairs.
Bozic explained that the meeting established a good basis to launch talks on some important
projects, while he also pledged Slovenia's assistance to Bulgaria by sharing its experience in
the EU.
In turn, the Bulgarian official said his country could serve Slovenia as a springboard to the
Caucasus, while Slovenia was Bulgaria's link to western Europe.
Bulgarian Minister Calls for Better Ties Between Seaports
Bulgarian Transport Minister Peter Moutafchiev called for more links between the port of
Koper and the Bulgarian port of Varna in order to boost transport ties between the Black Sea
and the Adriatic
Bulgarian Transport Minister Peter Moutafchiev called on Tuesday, 8 May for more links
between the port of Koper and the Bulgarian port of Varna in order to boost transport ties
between the Black Sea and the Adriatic.
Moutafchiev, speaking after meeting the management of port operator Luka Koper, added that
links between the Northern Adriatic and the Black Sea presented an extremely important
cargo route.
Slovenian Transport Minister Janez Bozic, also taking part in the meeting, meanwhile said
that Slovenia sees cooperation niches mainly in railway and air traffic as well as among the
port of Koper and Bulgarian seaports.
Luka Koper chairman Robert Casar said that the talks produced the groundwork for
agreements that would serve to establish new maritime links. Projects would be discussed in
more detail in the coming months.
Moutafchiev met Bozic earlier in the day, agreeing that the two countries would exchange
haulage permits within a fortnight.
6
Arab Peace Initiative in Centre of Rupel's Visit to Egypt
Foreign Minister Dimitrij Rupel met his counterpart Ahmed Aboul Gheit as he paid a working
visit to Egypt
Foreign Minister Dimitrij Rupel met his counterpart Ahmed Aboul Gheit as he paid a working
visit to Egypt on Wednesday, 9 May. While the pair focused on the Arab peace initiative for
the Middle East, Rupel wrapped up his tour of the region by assessing that he had been given
a fairly complete picture of the situation there.
Gheit described the meeting to the Slovenian press as meaningful, saying that he and Rupel
focused on the Israeli-Palestinian conflict. Gheit expressed hope that Israel would accept the
guidelines set in the Arab peace initiative revived in March and that things would starting
moving forward.
Gheit hopes that the Palestinians and Israelis will start negotiations aimed at establishing a
Palestinian state and that Israel would withdraw from the occupied territories.
Rupel added that in order for the Arab peace initiative to succeed "more motivation will also
be needed on the Israeli side".
Gheit said that the pair also discussed Iraq, Darfur and the EU and the Western Balkans. He
said that Rupel had invited him to visit Slovenia and that he would accept the invitation.
Commenting on Iraq, Rupel said that the situation there seemed unsolvable and was getting
increasingly complicated. "We are all afraid that hostilities and problems get carried across
borders, which means that the problem is moving ever closer to the EU. This is also why we
have to deal with it," he stressed.
Earlier in the day, Rupel met Minister without portfolio and Chief of the Egyptian Intelligence
Services, General Omar Suleiman. The pair also concentrated on the situation in the Middle
East.
Suleiman believes that the international community needs to work with the Palestinian
national unity government formed in March.
Rupel meanwhile said that his five-day tour of the Middle West had given him a fairly
complete picture of the situation in the region. According to him, the current state of affairs
however does not give reason to believe that a solution is any closer than it has been in the
past.
He added that the knowledge acquired during the tour would be very helpful to Slovenia
during its stint as EU president in the first half of 2008.
Rupel's tour of the region took him to Israel, the Palestinian territories, Saudi Arabia and
Egypt. In Riyadh, Saudi Arabia, he attended the 17th meeting of the EU's foreign ministers
and the countries of the Gulf Cooperation Council (GCC).
Agriculture Minister Visits Serbia
Jarc attended an international conference on bioenergy in agriculture
Agriculture Minister Iztok Jarc started his first visit to Serbia on Friday, 11 May in a bid to
boost cooperation between the two countries in agriculture, rural development and food
industry, the Agriculture Ministry said in a press release.
Jarc attended an international conference on bioenergy in agriculture.
Jarc said at the conference that the EU plans for increasing the share of renewable energy
sources in energy consumption were ambitious and that they presented an opportunity for
Southeastern Europe, including Slovenian agriculture.
Many EU members will have to import raw material and biofuels from Southeastern Europe
in order to meet the requirements of the European energy policy, said Jarc.
European directive on the promotion of the use of biofuels and other renewable fuels for
transport determines that the share of biofuels in transport should reach 5.75% by 2010, and
20% by 2020.
7
Slovenian agriculture can play an important role in the segment, primarily with biofuel based
on rapeseed oil and the production of bioethanol, said Jarc.
Slovenia and China Mark 15 Years of Diplomatic Ties
The People's Republic of China recognised Slovenia in April 1992, while the countries
established diplomatic ties on 12 May 1992
The Chinese Embassy in Ljubljana held on Friday, 11 May a reception marking the 15th
anniversary of the establishment of diplomatic ties between China and Slovenia. New Chinese
Ambassador to Slovenia Zhi Zhaolin said on the occasion that the two countries had
established strong foundations for cooperation and friendly relations.
According to Zhi, there are no open issues between the countries, so there are no obstacles for
further strengthening of bilateral relations. He added that China was looking forward to the
visit by Prime Minister Janez Jansa in the second half of the year.
Zhi, who took up office in April, praised Slovenia's achievements since its independence.
Slovenia has achieved great advances in economy, social stability and standard of life, also
being active in the preservation of international and regional peace, said Zhi.
President of the parliamentary Foreign Policy Committee Jozef Jerovsek meanwhile said that
China considered Slovenia to be a reliable friend which supported the one-China policy.
China is the biggest Slovenian partner in Asia, as the number of Slovenian companies in
China is on the increase, said Jerovsek, adding that the countries also cooperate in culture,
science, education and tourism.
The reception, held in a Ljubljana hotel, was attended by numerous politicians, diplomats and
business executives, including Foreign Minister Dimitrij Rupel with his spouse, and the
President of the National Council Janez Susnik.
The People's Republic of China recognised Slovenia in April 1992, while the countries
established diplomatic ties on 12 May 1992.
Minister Agrees on Cooperation with Serbian Province
Agriculture Minister Iztok Jarc agreed that the Slovenian Agriculture and Forestry Chamber
and the provincial government of the Serbian province of Vojvodina would draft a plan to
cooperate in livestock breeding, selection, cooperatives and EU issue
Agriculture Minister Iztok Jarc agreed on Friday, 11 May that the Slovenian Agriculture and
Forestry Chamber and the provincial government of the Serbian province of Vojvodina would
draft a plan to cooperate in livestock breeding, selection, cooperatives and EU issues.
Jarc told STA the agriculture sectors in Slovenia and Vojvodina were complementary after
meeting Bojan Pajtic, the head of the Vojvodina regional council in the regional capital of
Novi Sad.
The interlocutors agreed that the Slovenian embassy would organise a seminar for interested
Serbian companies.
"First we would organise a general seminar on legislation and other conditions, with meetings
among interested companies to follow," said Jarc who was acquainted with the privatisation
of agricultural companies in the autonomous northern Serbian province.
Before the meeting, Jarc attended an international conference on bioenergy in SE Europe,
where he spoke about EU policies in renewable energy and Slovenian activities in this area.
The minister's visit to Serbia coincided with Slovenia's presentation at Novi Sad International
Agriculture Fair.
8
EUROPEAN UNION
Slovenia Receives First Warning over Discriminatory Taxation
The European Commission rebuked Slovenia and eight other EU members over their rules
under which dividend and interest payments to foreign pension funds may be taxed more
heavily than dividend and interest payments to domestic pension fund
The European Commission rebuked Slovenia and eight other EU members on Monday, 7
May over their rules under which dividend and interest payments to foreign pension funds
may be taxed more heavily than dividend and interest payments to domestic pension funds.
The Commission doubts whether such higher taxation is compatible with the European
Community Treaty and with the European Economic Area Agreement, as it may restrict the
free movement of capital.
The member states involved, which also include the Czech Republic, Denmark, Spain,
Lithuania, the Netherlands, Poland, Portugal, and Sweden, are asked to reply to the letter of
formal notice within two months.
"The European pension industry has complained about higher taxation of pension funds if
they exercise their rights under the EC Treaty to invest across the border," EU Taxation and
Customs Commissioner Laszlo Kovacs said in a press release.
"The Commission is taking these complaints seriously and has decided to start formal
enquiries," Kovacs added.
A letter of formal notice is the first step of the infringement procedure of Article 226 of the
EC Treaty.
Lisbon Goals Link Between Slovenian, Portuguese EU Presidency
A common task of Portugal's and Slovenia's successive presidencies of the EU will be to draft
and adopt new Lisbon Strategy guidelines for the 2008-2010 period
A common task of Portugal's and Slovenia's successive presidencies of the EU will be to draft
and adopt new Lisbon Strategy guidelines for the 2008-2010 period, so the cooperation
between the countries is very important, Minister of Labour, the Family and Social Affairs
Marjeta Cotman and her Portuguese counterpart Jose Vieira da Silva agreed in Ljubljana on
Monday, 7 May.
Implementation of the Lisbon Strategy is one of the priorities of Slovenia's EU presidency in
the first half of 2008, said Cotman, adding that the current Lisbon Strategy would come to a
close during the presidency and that foundations for the next three-year period would be
adopted.
Preparations for the review of the Lisbon Strategy will start during Portugal's stint as the EU
president in the second half of 2007, so the cooperation between the countries is very
important, said da Silva.
The ministers also discussed other priorities of their countries, with Cotman pointing out
employment of young people, demography and equal opportunities as Slovenia's priorities.
Portugal's priorities meanwhile include directives on working hours, supplementary pension
insurance, and flexicurity on the labour market.
The EU is in the process of drafting a common definition of flexicurity, which will be
presented in June, Cotman explained.
Official: Slovenia Has Not Taken a Position on EU-Wide Tax
The country will make a decision after receiving a report from the working group in the
autumn
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Slovenia has not yet taken a position on the EU-wide tax, Mojmir Mrak, the head of the
Slovenian working group for EU budgetary reform said on Monday, 7 May. The country will
make a decision after receiving a report from the working group in the autumn, Mrak said at
the close of a conference on the EU budget reform.
According to Mrak, a professor at the Faculty of Economics, the budget reform will not play a
major role during Slovenia's stint as EU president in the first half of 2008, as a public debate
on the issue would not be concluded by then.
The December 2005 agreement of EU heads of state and government tasked the European
Commission to present its reform proposal by the end of 2009. Mrak said the debate on the
tax would continue for the next few years.
The European Commission itself is not completely unanimous on plans for setting up a single
EU tax authority which would lead to a common tax base for European companies.
Moreover, countries with low taxes, such as Ireland and the UK, oppose the move, while
Germany and France support it.
Another topic broached at the conference by 60 participants from 12 EU members, was the
Common Agricultural Policy (CAP).
According to Mrak, CAP has been changing for quite some time but the EU newcomers want
it to stay as it is.
The issue will also be on the agenda of the Slovenian EU presidency, as the Commission is
expected to publish an overview of the CAP in March 2008, he said.
Janez Lenarcic, state secretary for European affairs, meanwhile said that the 2007-2013
budget was the best possible compromise. But since member states were focusing too much
on what they would get from it, any far-reaching reforms were made impossible.
Government Responds to EU's Warning Over Health Insurance
The government confirmed a draft response to an official warning from the European
Commission regarding health insurance legislation
The government confirmed on Thursday, 10 May a draft response to an official warning from
the European Commission regarding health insurance legislation, when the Commission said
that the government interfered in voluntary additional health insurance schemes, the Health
Ministry said in a press release.
According to the warning issued in late March, certain provisions of the health care and health
insurance act are not in line with European directives for non-life insurance.
The Commission does not agree with the initial response from the government, which says
that health insurance in Slovenia presents a partial or full alternative to obligatory insurance.
The Commission believes that additional insurance is only a supplement and therefore cannot
be considered as part of obligatory insurance, the release says.
The Health Ministry presented in the response specific features of the Slovenian system of
obligatory and additional insurance, their mutual dependence, and their role in providing
social security.
Additional health insurance in Slovenia is voluntary, while the law defines it as a public
interest. Together with obligatory health insurance, it constitutes the social security system,
the response says.
Without such additional financial source, the public expenditure for health, which is among
the highest in Europe, would be considerably higher, the government says.
Additional insurance does not give any additional rights to insured persons, it is aimed at
funding medical services which are not fully covered with obligatory insurance.
The response also quotes legal cases in support of the government's position, including a
comparable case, when the Commission found out that Irish health insurance regulation which
is similar to Slovenian was not contrary to European directives.
10
Slovenia to Contribute to EU Energy Supply Warning Scheme
Attending a meeting of the EU Network of Energy Security Correspondents (NESCO) Franc
Zlahtic of the Economy Ministry told STA that Slovenia's role in collecting data across the EU
and pointing out possible energy crisis situations would be foremost in keeping an eye on the
gas end electricity transfer network
Attending a meeting of the EU Network of Energy Security Correspondents (NESCO) on
Thursday, 10 May, Franc Zlahtic of the Economy Ministry told STA that Slovenia's role in
collecting data across the EU and pointing out possible energy crisis situations would be
foremost in keeping an eye on the gas end electricity transfer network.
Zlahtic said that he and Robert Kokalj of the Foreign Ministry had been named members of
NESCO. Thus, the two ministries will cooperate in the early warning scheme for possible
problems in the area of energy supply, he explained.
Zlahtic highlighted three key objectives of the NESCO network; the monitoring of energy
supply across the EU, determining "cases of uncertainty", and finally introducing possible
measures on the ground.
The network brings together all EU members, the European Commission, its delegations, and
the EU Council Secretariat.
Slovenian EU Presidency Tops Health Commissioner's Meeting
The Slovenian EU presidency in the first half of 2008 dominated meeting between European
Health and Consumer Protection Commissioner Markos Kyprianou and his host, Health
Minister Andrej Brucan
The Slovenian EU presidency in the first half of 2008 dominated the meeting between
European Health and Consumer Protection Commissioner Markos Kyprianou and his host,
Health Minister Andrej Brucan on Friday, 11 May.
Talking to the press after the meeting, Kyprianou said that a lot would be going on then in the
health area and welcomed Slovenia's intention to focus on fighting cancer.
Brucan meanwhile explained that more attention should be paid to prophylaxis and early
diagnosis of cancer. Slovenia also supports the efforts to cut the use of alcohol and smoking
and to promote a healthy diet, Brucan said, adding that by the summer the parliament was
expected to pass an anti-tobacco act.
Kyprianou presented the Commission's health priorities, including cross-border health care
service, combat against smoking, a reduction in consumption of alcohol, e-health care and
healthy dieting. He believes that this strategy should also be on the agenda during the
Slovenian presidency.
It was important that the European Court of Justice recognised the right to cross-border health
care, so the Commission should ensure that this right was exercised, he added.
Kyprianou and Brucan agreed that it would be hard to reach a consensus between the
members on the subject, especially on the issue of financing, as the prices of health care
services vary greatly among them.
Cross-border health care also topped Kyprianou's meeting with Parliament Speaker France
Cukjati. The pair discussed the resolution on the cross-border health care services that the
European Parliament passed on 15 March.
They agreed that this issue should be resolved as soon as possible, the parliament said after
the meeting.
Kyprianou presented to Cukjati documents such as the EU health care strategy, which will
probably be on the agenda during the Slovenian presidency, and an initiative for tobacco
smoke-free Europe. He also touched upon donating and transplanting of organs and the issue
of prices of medicine.
11
Kyprianou added that the Commission strove for good cooperation with national parliaments
and that cooperation with the Slovenian Parliament was especially important in the light of
the coming EU presidency.
On Thursday Kyprianou met Agriculture Minister Iztok Jarc. The pair discussed the system of
food safety in Slovenia, the country's preparations for the EU presidency and some topical
issues, including swine fever, the Agriculture Ministry said.
Jarc said Slovenia was aware that the planned agenda in the fields of animal health, plant
protection products and safe food was very extensive. During the presidency the Agriculture
Ministry will focus on themes that will have already been tackled by the German and
Portuguese presidencies.
The main issues will include wellbeing of animals, animal by-products, strategy of animal
health care, regulating the use of hormones and procedure of registering plant protection
products.
Jansa: Slovenia Supports Efforts of SE Europe
Attending the meeting of the South-East European Cooperation Process (SEECP) is a sign of
further Slovenian support for the Southeastern Europe, especially in the light of the Slovenian
EU presidency in the first half of 2008
Attending the meeting of the South-East European Cooperation Process (SEECP) is a sign of
further Slovenian support for the Southeastern Europe, especially in the light of the Slovenian
EU presidency in the first half of 2008, Prime Minister Janez Jansa said on Friday, 11 May.
On the sidelines of the meeting on Zagreb, to which Jansa was invited as a representative of a
donor country, Jansa met Macedonian President Branko Crvenkovski.
Croatian Prime Minister Ivo Sanader told the participants in the two-day meeting on
strengthening regional cooperation that SEECP had only one goal: lasting stability of the
region within the EU and NATO.
The participants, representatives of SEECP members, the EU and donor countries, also
touched on the future of Kosovo and Serbia.
PM Says Situation Favours June Breakthrough in EU Crisis
Prime Minister Janez Jansa believes that political and economic situation is favourable for
solving the EU's crisis. Slovenia wants the breakthrough to come this June as that would
make its six months at the helm of the EU in the first half of 2008 much easier
Prime Minister Janez Jansa believes that political and economic situation is favourable for
solving the EU's crisis. Slovenia wants the breakthrough to come this June as that would make
its six months at the helm of the EU in the first half of 2008 much easier, the prime minister
said in Sintra on Saturday, 12 May.
Jansa, who is attending an informal meeting of the European Commission, Parliament and the
heads of the EU presiding trio, added that if the deal on the EU constitutional treaty was not
reached, Slovenia would face tough work during its spell and the circumstances would be less
optimistic and favourable for solving other issues.
Slovenia also wants a deal on a new basic document of the 27-member bloc because "we are a
part of Europe, which is in urgent need of a solution", Jansa added.
According to the prime minister, the situation looks favourable and the mood is upbeat,
especially because of economic growth and election results in France. He believes that the
June summit could result in a breakthrough in talks on the new document.
He said the contents and not the framework is what mattered in drafting the new document.
"The situation is substantially better than a year ago, which does not mean that we are
unanimous, but rather that our differences and the areas which require more efforts have been
pinpointed," Jansa explained.
12
The basic dilemma is whether the constitutional treaty, rejected by the French and the Dutch
at 2005 referenda, should be scaled down into a kind of mini agreement in order to boost the
process of ratification or whether talks on some of its provisions should begin anew.
Slovenia, which has already ratified the treaty, wants to keep the document largely unchanged
and firmly opposes a relaunch of a debate on the relations between institutions, the weighting
of the votes and the way of making decisions.
The initiator of the meeting, Commission President Jose Manuel Barroso, said that
brainstorming meetings such as this would become traditional and that the next one would be
held during Slovenia's stint.
The meeting was time well spent, added Barroso and said that the next and all subsequent
meetings would take place in Sintra.
The first such informal meeting was also attended by Portuguese Prime Minister Jose
Socrates, German Chancellor Angela Merkel and EU Parliament President Hans-Gert
Poettering.
13
LEGISLATION
Government Amends Investment Funds Act
Bajuk told the press that the amendments were needed to achieve compliance with an EU
directive on investment funds and that the act was one of the three key pieces of legislation
needed to normalise the Slovenian financial market
Government filed in parliament on Friday, 11 May amendments to the investment funds and
management companies act, which aim above all to simplify their operations and that of their
regulatory body, the Securities Market Agency, according to Finance Minister Andrej Bajuk.
Bajuk told the press that the amendments were needed to achieve compliance with an EU
directive on investment funds and that the act was one of the three key pieces of legislation
needed to normalise the Slovenian financial market.
The finance minister highlighted as the most important changes to the old act the introduction
of an additional option to transform investment funds - through the merger of mutual funds -,
and a simplification of the operations of management companies through the establishment of
an framework body.
The current act allows for only two forms of investment fund transformation; the liquidation
of the fund and the transfer of management to another management company.
Slovenia had 14 management companies at the end of 2006, one of them managing an
investment fund, eight of them mutual funds, and five covering both investment and mutual
funds. Seven investment funds were active in Slovenia at the end of 2006.
14
STATISTICS/FORECASTS
Commission too Pessimistic about Slovenian Growth, Minister Says
Finance Minister Andrej Bajuk has labelled as too pessimistic the European Commission's
projection that Slovenia's economy would expand by 4.3% in 2007
Finance Minister Andrej Bajuk has labelled as too pessimistic the European Commission's
projection that Slovenia's economy would expand by 4.3% in 2007. The Commission got it
wrong and the number will stand at 4.7% at least, Bajuk said in Brussels on Tuesday, 8 May.
The Commission's projection, published as part of the Spring Forecast on Monday, 7 May,
"will be proved wrong", Bajuk said after meeting his EU counterparts at the Economic and
Financial Affairs Council.
Bajuk believes that the Commission did not research the situation in recent months well
enough. "Time will show that the situation is better" than the models show.
Furthermore, the Commission leaned too much on the autumn forecast by the Institute of
Macroeconomic Analysis and Development (IMAD), a government think-tank, which Bajuk
labelled as too conservative.
Bajuk also said data did not point to a slowdown, as it just gets more upbeat every month.
Stocks are decreasing and orders are on the rise, he said.
Additionally, data is not showing a substantial drop in investment overall while investment in
construction are expected to expand.
Slovenia Loses One Spot on IMD Global Competitiveness Rankings
Slovenia lost one spot to finish 40th on the competitiveness rankings of the International
Institute for Management Development in 2007
Slovenia lost one spot to finish 40th on the competitiveness rankings of the International
Institute for Management Development in 2007. However, it managed to reduce the relative
gap to the leader, the US.
Slovenia was overtaken by Lithuania, the country which was included in the rankings for the
first time this year, bringing the number of countries in the survey to 55.
Presenting the results on Wednesday, 9 May, Peter Stanovnik of the Ljubljana-based Institute
for Economic Research, said that Slovenia's problems lie in the lack of foreign direct
investment and excessive state ownership of companies.
"Privatisation should be sped up. This does not only entail the withdrawal of the state from
companies but also a reduction of its influence in regulation," said Stanovnik.
Government efficiency, business efficiency and infrastructure development remained on par
with the results from last year, added Art Kovacic of the institute.
The global competitiveness leader, the US, is followed by Singapore and Hong Kong.
Estonia, ranked 22, is the best-placed EU newcomer from the 2004 enlargement. Countries
from that group that also surpassed Slovenia were Lithuania, the Czech Republic, Slovakia
and Hungary.
Stanovnik and Kovacic also presented a global competitiveness report for 2006 and 2007,
published by the World Economic Forum (WEF). Slovenia is ranked 33rd, similar as in
2005/2006 in the report that focuses on long-term development policies and strategies.
The most competitive country, according to WEF criteria, is Switzerland, followed by
Finland, Sweden, Denmark and Singapore. The US is 6th, while Hong Kong was ranked 11th.
Broken down by segments of the WEF report, Slovenia failed to make any steps forward in
market efficiency. The low score for this indicator is the result of the small size of Slovenia's
economy and lack of progress on the labour market, said Kovacic.
15
Slovenia meanwhile managed to improve its higher education and training system and in
economic growth.
Industrial Output Up 15.4% in March
According to the indicator that also takes into account the difference in the number of
working days, industrial output rose by 11.5% in the month
Slovenian industrial output rose 15.4% in March over February, while it expanded by 9.3% on
a yearly basis, the National Statistics Office said on Thursday, 10 May. According to the
indicator that also takes into account the difference in the number of working days, industrial
output rose by 11.5% in the month.
Compared with March last year, output expanded the most in mining (39.7%) and in the
manufacturing sector (10.1%), while it dropped by 13.1% in electricity, gas and water supply
industries.
The most substantial increase in terms of products was meanwhile achieved by capital
industries (13.7% y/y), production of intermediate goods expanded by 10.1% and that of
consumer goods by 5.7%.
Moreover, stocks increased by 1.6% at the monthly level and by 6.5% over February 2006.
Economy Institute Confident of Continued Strong Growth
An economic think tank said that Slovenia's economy would expand by 4.7% this year
An economic think tank said on Thursday, 10 May that Slovenia's economy would expand by
4.7% this year, contradicting the recently downgraded forecasts by the European
Commission. The government Institute of Macroeconomic Analysis and Development
(IMAD) said its data was based on upbeat reports from the first four months of this year.
IMAD's Bostjan Vasle told the press that each institution used different methods for making
its projections. The difference between the Commission's assessment (4.3% in 2007) and
IMAD's is in the forecast for foreign trade.
"The difference most likely arose because we have more contacts with Slovenian companies.
We believe that the Commission did not take into account the effects that exports of a new car
to the EU will have," said Vasle in reference to the launch of the new generation Renault
Twingo manufactured by Renault-owned Slovenian car maker Revoz.
Data for the first four months shows that the recent rise of the value added tax (VAT) rate in
Germany had only a limited impact on Slovenian exports to its key trade partner and would
not present a hindrance to growth, Vasle said.
While the hike did slow down consumption in Germany, it did not impact industrial output.
This had a favourable effect on Slovenian output as well, which expanded by 10.6% in the
first three months of 2007, Vasle said as he presented April's issue of the Economic Mirror
report.
According to Vasle, long-term inflation trends remain stable and employment indicators are
upbeat, as a high growth in employment was recorded in export-dependent companies.
16
FINANCE
Economist Calls for More Effective Curbing of Public Deficit
Slovenia should use the ongoing period of economic growth for a more ambitious public
finance policy and for a more effective curbing of its public deficit, according to Mojmir Mrak
of the Ljubljana Faculty of Economic
Slovenia should use the ongoing period of economic growth for a more ambitious public
finance policy and for a more effective curbing of its public deficit, according to Mojmir
Mrak of the Ljubljana Faculty of Economics.
Mrak, an expert on international finance, said for the daily Dnevnik on Monday, 7 May that
international institutions like the IMF and the European Commission had unfortunately began
to point this out only in recent months.
"The reasoning that this is not possible because of investments into the railway system does
not seem particularly convincing," Mrak said.
While Mrak also believes the current public finance situation to be good, he does not agree
with the prevailing official assessment that Slovenia's public finance risks only lie in the
distant future and are related but to the ageing population.
Such risks can materialise sooner, especially in combination with a slowdown in Europe's
economy, Mrak believes.
According to him, the government reform programme is being implemented extremely
unevenly with certain areas clearly legging behind. Among the latter, Mrak highlighted the
state's withdrawal from the economy. With the EU presidency and general election in sight,
he expects little progress in this regard.
Survey: Slovenian Banks Behind in Customer Service
Slovenian banks placed only ahead of Bulgaria in a survey concerning the level of customer
services in banks, which was conducted in March in eight Central European countries by the
International Service Check company
Slovenian banks placed only ahead of Bulgaria in a survey concerning the level of customer
services in banks, which was conducted in March in eight Central European countries by the
International Service Check company.
Hungary was the top rated country with 88.9 points, followed by Romania, Serbia, the Czech
Republic and Croatia, while the 74.5 points given to Slovenia were only enough to surpass
Bulgaria, International Service Check has said in a press release.
The survey was carried out in 86 banks in 32 cities in the eight countries. It involved a total of
282 control visits, 24 out of which were in Slovenia. Under scrutiny were "appearance", the
level of "service (help and advice)", and "customer care".
Among the eight banks visited in Slovenia, the best overall results were achieved by Bank
Austria Creditanstalt Ljubljana, Raifeissen Krekova banka and Nova Kreditna banka Maribor
(NKBM).
According to International Service Check, the performance of banks in Slovenia is the poorest
in the field of customer care.
New Petrol Prices
Petrol prices are adjusted every two weeks to oil prices and the exchange rate of the US
dollar
Prices of all types of petrol went up on Tuesday, 8 May. Regular is being 3.6 cents more
expensive at EUR 1.097 while premium costs EUR 1.105, also 3.6 cents more.
17
Diesel meanwhile went up by 0.2 cents to EUR 0.961, whereas the price of heating oil
increased by 0.4 cents to EUR 0.603.
The hike put the price of premium close to the all-time high of EUR 1.113, the price recorded
in September 2005.
The cost of a litre of regular unleaded meanwhile reached a new record, after already breaking
one in April.
Fuel has been becoming steadily more expensive in Slovenia, with regular unleaded adding
12.98% since the beginning of the year and diesel up 2.45%.
France Krizanic, the head of the Economic Institute at the Ljubljana Faculty of Law, told STA
that petrol prices usually drop between August and January, then remain stable for three
months and experience a quick rise between April and July or August.
Such seasonal price changes are the result of very high storage costs and uneven consumption,
Krizanic said.
Petrol prices are adjusted every two weeks to oil prices and the exchange rate of the US
dollar.
Zavarovalnica Maribor to Enter Croatian Market By Year-End
The supervisors of Zavarovalnica Maribor discussed the foreign markets strategy of
Slovenia's third-largest insurer, which includes as one of the first steps planned before the
end of the year the opening of two subsidiaries in Croatia
The supervisors of Zavarovalnica Maribor discussed on Tuesday, 8 May the foreign markets
strategy of Slovenia's third-largest insurer, which includes as one of the first steps planned
before the end of the year the opening of two subsidiaries in Croatia, the company said in a
press release.
According to the insurer, the two offices in Croatia will provide property and other kinds of
insurance.
"Zavarovalnica Maribor will be making direct investment in Croatia. We expect to obtain all
the necessary permits by the end of the year," the company's CEO Drago Cotar said. He added
that the value of the investment and the ownership structure could not be discussed at this
point.
Zavarovalnica Maribor reached its targets for 2006, collecting EUR 210m in insurance
premiums, 11.6% more than in 2005, while the net profit amounted to EUR 5.5m.
It collected EUR 154m in property insurance premiums in 2006, which is 9% more than the
previous year, and EUR 56.3m in life insurance premiums, 21% more than in 2005.
Participants Say Financial Market Act to Hit Free Market
The 24th conference began with a presentation of pension reforms and the capital markets in
Austria and Finland and Slovenia
The bill on the market in financial instruments is designed to improve transparency and the
trust of investors, but it will also increase the costs for companies on the free market, the
participants of a stock market conference agreed in the seaside resort of Portoroz on
Thursday, 10 May.
According to Andrej Sketa of the Ljubljana Stock Exchange, the operator of the Ljubljana
stock market the bill would bring similar obligations regarding reports to the companies on
the free market as to those that are listed on the official market.
The bill, drafted by the government last November, should enter into force at the beginning of
this year, according to EU directives.
Bozo Jasovic, a member of the board of governors at the central bank Banka Slovenije,
meanwhile talked about the challenges of the Slovenian financial markets after the euro
changeover.
18
According to Jasovic, Slovenia offers scores of opportunities for companies that deal with
investment into companies and with supplementary retirement and life insurance.
He believes that Slovenians would lower the amount they save in banks and increase their
investments into mutual funds, life insurance schemes and bonds.
Piotr Dzieciolowski, an analyst with the UK-based CA-IB financial firm, meanwhile said that
the Slovenian market with its EUR 15bn market capitalisation is one of the largest in SE
Europe but one of the smaller in Central Europe.
Dzieciolowski added that the Slovenian market suffers from a lack of liquidity, however,
added that the situation should improve after the second wave of privatisation is completed
and some of the largest financial companies in the country enter the market.
The 24th conference began with a presentation of pension reforms and the capital markets in
Austria and Finland and Slovenia.
Economists Support Floating of NKBM
Several Slovenian economists assessed for STA the decision to list Slovenia's second largest
bank Nova Kreditna banka Maribor (NKBM) on the Ljubljana Stock Exchange as a welcome
development
Several Slovenian economists assessed for STA the decision to list Slovenia's second largest
bank Nova Kreditna banka Maribor (NKBM) on the Ljubljana Stock Exchange as a welcome
development. The move was announced on Friday, 11 May by Finance Minister Andrej
Bajuk.
Bogomir Kovac of the Ljubljana Economics Faculty and the director of the Institute of
Macroeconomic Analysis and Development (IMAD) Janez Sustersic agree that this will
reveal the true value of the bank, whereas independent financial analyst Matej Tomazin
believes that this is also good news for the LJSE.
Kovac said that dividing the privatisation into two phases, the first being the listing of the
bank, seemed like a good idea.
Economist Saso Polanec meanwhile believes that the move will improve the transparency of
the bank's operations and increase the accountability of the management board.
Tomazin, who also sees the floating of NKBM as adding colour to the LJSE, is less content
with the decision to only include institutional investors and individuals. According to him,
this will deprive the bank of the know-how that could be obtained through a strategic foreign
partner.
The economists showed less enthusiasm for the news that a banking and insurance holding
would be created around the NKBM.
Kovac labelled the decision as the "weakest element of the entire privatisation story", arguing
that the central driving force behind formation of the holding was not business interests, but
rather state-ownership motives.
Polanec believes that it "is more than clear that it is a decision that will foremost benefit
specific interest groups instead of serving the purpose of maximising state profit by selling to
the highest bidder".
Ljubljana Stock Exchange
Chemistry-through-tourism conglomerate Sava was the engine behind last week's growth on
the Ljubljana Stock Exchange that saw the main market SBI 20 index adding 72.47 points
(0.82%) to 8,902.41
Chemistry-through-tourism conglomerate Sava was the engine behind last week's growth on
the Ljubljana Stock Exchange that saw the main market SBI 20 index adding 72.47 points
(0.82%) to 8,902.41. The SBI TOP index of the ten largest blue chips added 2.98 points
(0.15%) to 1,921.43.
19
The Kranj-based Sava was the main winner last week, adding 19.2% to EUR 365.33 on a
turnover of EUR 1.25m in regular deals and EUR 3.02m in block trade. The company's
management said after trading closed on Friday, 11 May that it was unaware of the reasons
for the strong gains.
Telco Telekom Slovenije was the biggest magnet for investors, clocking up deals worth EUR
4.32m, but shedding 2.13% to EUR 410.63.
Pharma company Krka also had a losing week, shedding 1.96% to EUR 862.91 on turnover of
EUR 3.3m and an additional EUR 2.2m in block trade.
Meanwhile, port operator Luka Koper added 6.37% to EUR 89.36, while food, energy and
tourism holding Istrabenz shed 4.47% to EUR 79.58m.
Brokers concluded deals worth a moderate EUR 28.2m with additional EUR 9.7m coming in
block trade.
Investment firms had a mixed week, which saw the PIX investment fund index add 13.39
points (0.22%) to 6,048.64. Meanwhile, the BIO bond index remained virtually flat at 117.21.
In other news, Finance Minister Andrej Bajuk said that the NKBM, Slovenia's second largest
bank, would be floated on the LJSE before the end of the year.
Independent financial analyst Matej Tomazin believes that the announced floatation is good
news for the stock market which is short of new items.
20
BRANCH INFORMATION
Slovenia Mulling Settlement over Excessive Farm Subsidies
Agriculture Minister Iztok Jarc announced that Slovenia was considering reaching a
settlement with the European Commission as it faces the prospect of having to reimburse the
EU a share of the farm subsidies for 2004 and 2005 due to excessive payments
Agriculture Minister Iztok Jarc announced on Monday, 7 May that Slovenia was considering
reaching a settlement with the European Commission as it faces the prospect of having to
reimburse the EU a share of the farm subsidies for 2004 and 2005 due to excessive payments.
The move comes after a European Commission audit found that the Agency for Agricultural
Markets and Rural Development occasionally paid farmers subsidies for more land than they
actually had. The agency said in April that Slovenia would have to return some EUR 1.4m.
Minister Jarc said in Brussels that the mistakes had not been made intentionally, it was a case
of teething problems and lack of experience.
Moreover, Slovenia is the only new member state to implement the Common Agriculture
Policy in its full complexity, Jarc said, adding that he does not expect "absolution" from the
EU but "understanding" for unintentional mistakes.
If Slovenia opts for settlement a decision can be expected in a few months, according to Jarc,
who noted that Austria for example opted for such proceeding five times but it succeeded only
once.
The agency believes that there were two reasons for the mistakes: the field inspectors were
not rigorous enough and they used classical measuring instead of satellite technology; and the
4% tolerance limit was taken too laxly.
EUR 734.5m Motorway Construction Plan Gets Unanimous Support
The 2007 motorway construction plan envisages the opening of 17.7 kilometres of new
motorways and 2.3 kilometres of connecting roads, while construction will begin on 14.8
kilometres of motorways
Parliament confirmed on Monday, 7 May the EUR 734.5m plan of motorway construction in
2007 in the vote that saw 64 MPs voting in favour and none against.
The 2007 motorway construction plan envisages the opening of 17.7 kilometres of new
motorways and 2.3 kilometres of connecting roads, while construction will begin on 14.8
kilometres of motorways.
The total length of sections under construction will stand at over 100 kilometres, Transport
Minister Janez Bozic said as he presented the plan.
Construction will be financed with budgetary and EU funds, motorway tolls, loans from
foreign financial institutions and other sources, he said.
The opposition Liberal Democrats (LDS) pledged their support for the plan and labelled it
ambitious. However, LDS MP Milan Petek pointed to the mounting debt taken on by the
motorway company, DARS, and expressed doubts in its sustainability.
Support for the document was also voiced by the opposition Social Democrats (SD) and the
National Party (SNS), which however expressed concern over the late passage of the plan.
Similar concerns were voiced by the group of unaffiliated MPs.
The coalition parties also support the plan, however the stressed that the ambitious
programme must not neglect other state roads.
21
Tourism Council to Encourage New Air Routes
Slovenia can become a regional centre and starting-point for flights to Central, East and
South-East Europe
Slovenia cannot compete with big airports abroad. However, it can become a regional centre
and starting-point for flights to Central, East and South-East Europe, the members of the
Slovenian Tourism Council agreed at their meeting on Tuesday, 8 May.
The council decided to set up a working body within the Slovenian Tourist Board, which will
determine key markets for Slovenia and be responsible for the risks connected with a possible
introduction of new air routes.
Members of the council estimate big markets of the European Union, the US, Japan and
Russia hold great potential for Slovenia.
Slovenian airports should be specialised. Business flights should remain a priority for the
Ljubljana Airport, the Portoroz Airport would be a destination for sport planes, and the
Maribor Airport should be intended for low-cost carriers, the council said.
Chairman of the Slovenian flag carrier Adria Airways, Tadej Tufek, said the company is
considering extending air traffic onto Maribor Airport. Adria Airways is ready to introduce
new routes; however, tourist companies, which would profit from the new routes, should take
on some of the risk as well.
Representatives of tourist companies, mainly of health resorts, agreed with Tufek, since it is
believed tourist arriving to Slovenia by air would become of greater importance in the future.
Slovenia to Get Additional EUR 12m for Sugar Reform
The European Commission proposed changes to the sugar sector restructuring scheme
The European Commission proposed on Monday, 7 May changes to the sugar sector
restructuring scheme. A Commission spokesman told STA that in line with the changes
Slovenian sugar beet growers would get an additional EUR 12m for the 2007/2008 season.
The changes are designed to make the restructuring scheme more attractive, since much fewer
producers have renounced their quota during the first two years of the scheme than
anticipated, the Commission said in a press release.
According to the changes, growers who renounce their quota will get an additional payment
which will also be paid retroactively to avoid penalising those who have already given up
their quotas.
Slovenian beet growers lost their quotas when the decision on the closure of Slovenia's only
sugar plant was made in the beginning of 2006.
Agriculture Minister Iztok Jarc said that this was important news, which however still had to
be studied and checked.
Slovenia has already been allocated EUR 38.9m from the restructuring fund that was
established in line with the reform.
The money is to be divided among farmers, who are to get EUR 3.9m, and employees, who
will get EUR 8.255m in severance pay.
The remainder of the money is to be used for closure works on the sugar plant in the
northeastern town of Ormoz.
Slovenia Needs to Double its Irrigated Farmland
The increasing frequency of droughts and warnings of climate change are causing a rise in
the need for irrigation systems in Slovenia. According to the Agriculture Ministry, some
15,000 hectares of land are irrigated in Slovenia, while the country would need twice the
amount
22
The increasing frequency of droughts and warnings of climate change are causing a rise in the
need for irrigation systems in Slovenia. According to the Agriculture Ministry, some 15,000
hectares of land are irrigated in Slovenia, while the country would need twice the amount.
According to the ministry, the biggest need for irrigation is present in the flat north-eastern
part of the country, in the regions of Pomurje and Podravje, as well as in the south-eastern
region of Dolenjsko and the coastal south-western region of Primorsko.
Irrigation allows farmers to respond to unforeseen climate change with minimal
consequences, the Agriculture and Forestry Chamber told STA.
According to the chamber, even though Slovenia is criss-crossed by streams and rivers,
drought is a major threat, as most of the water suitable for irrigation disappears quickly during
dry spells.
According to the ministry, the largest irrigation system in Slovenia, Vogrscek, is located in
the western Gorisko region. The Vogrscek irrigation system spans 1,200 hectares and is used
by fruit growers and farmers.
It was built between 1990 and 2000 and uses around two million cubic metres of water per
year, the head of the Kmetijstvo Vipava agriculture company told STA. Maintenance and
operation of the system costs between EUR 105,000 and 125,000 a year, Herman Usaj said.
Setting up such a system requires favourable land configuration and a suitable water source.
The ministry labelled as the biggest obstacle the permits by the Environmental Agency and
agreements with municipalities regarding spatial plans.
The agency has issued 77 permits for irrigation, while 437 applications are pending, including
for using water for other purposes. According to agency representatives, the institution has to
get expert opinions and perform analyses prior to issuing the permit.
The country does not have a long tradition in irrigation, as official records suggest the first
such systems were established in 1978. Moreover, much of the farmland in Slovenia is
fragmented or positioned in remote hilly areas, making it very costly to install irrigation
systems.
23
COMPANIES
Microsoft Slovenija Gets New General Manager
Matej Potokar has been appointed the new general manager of Microsoft Slovenia, the
Slovenian subsidiary of the US software company
Matej Potokar has been appointed the new general manager of Microsoft Slovenia, the
Slovenian subsidiary of the US software company. He succeeds Jaka Stele, who will be put in
charge of a group of Microsoft subsidiaries in Central and Eastern Europe.
Potokar was previously the head of a group for services in Central and Eastern Europe, the
company said in a press release on Monday, 7 May, adding that the reshuffle would simplify
the organisational structure in the region.
Stele will be put in charge of a group which includes Bulgaria, Croatia, Estonia, Kazakhstan,
Latvia, Lithuania, Montenegro, Serbia, Slovakia and Slovenia.
Slovenian Company to Build Galvanizing Plant in Vojvodina
The Celje-based company Maksim has won a public tender for the purchase of 5.6 hectares of
industrial land in Indjija, in the Serbian province of Vojvodina, where it intends to build a
hot-dip galvanizing plant
The Celje-based company Maksim has won a public tender for the purchase of 5.6 hectares of
industrial land in Indjija, in the Serbian province of Vojvodina, where it intends to build a hotdip galvanizing plant.
The investment is worth EUR 15m and the factory will employ some 50 people, Maksim
director Maks Bastl told STA on Wednesday, 9 May.
The hot-dip galvanization plant is a challenging project and construction is expected to take a
year and a half, Bastl said.
Maksim already has three subsidiaries in Serbia, Metal, Metal-Cinkara and Metal-Nova,
which are located in Cuprija, south of Belgrade, and produce pylons for overhead power lines
and containers.
Maksim posted sales of EUR 19m last year, with the Serbian subsidiaries contributing EUR
4m. The company expects revenues to grow by 10% this year.
Serbian Flag Carrier to Launch Belgrade-Portoroz-Rome Route
Serbian flag carrier JAT will launch on 23 June weekly flights between the Serbian capital of
Belgrade, the Slovenian coastal resort of Portoroz and the Italian capital of Rome
Serbian flag carrier JAT will launch on 23 June weekly flights between the Serbian capital of
Belgrade, the Slovenian coastal resort of Portoroz and the Italian capital of Rome, the
Slovenian Tourist Board (STO) said on Wednesday, 9 May.
The Portoroz-Rome link will be operated as a scheduled route, with return tickets at EUR 200,
a favourable price, according to the STO.
The board is also expecting an ad campaign to be launched in Rome to boost the occupancy
rate.
The route is being managed by Slovenian tour operator Kompas and supported by all major
tour operators from Portoroz.
STO director Dimitrij Piciga expressed his belief that the route would not be the only new air
link between Slovenia and foreign countries to be launched this year.
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Power Utility HSE Posts 2006 Net Profit of EUR 77.6m
Slovenia's largest power utility, HSE, posted a net profit of EUR 77.6m for 2006, up 29% over
the year before, by producing 16,318 GWh of electricity, 11% more than in 2005
Slovenia's largest power utility, HSE, posted a net profit of EUR 77.6m for 2006, up 29%
over the year before, by producing 16,318 GWh of electricity, 11% more than in 2005.
HSE's performance was successful in 2006 and the goals have been met or even surpassed,
the company said in a press release on Wednesday, 9 May after the supervisory board
confirmed the financial report.
The holding is the biggest power producer in Slovenia, operating hydro plants on the Drava
and Soca, the Sostanj and Trbovlje coal-fired power plants and the Velenje coal mine.
It has also started expanding abroad, as it is in final talks on the acquisition of a coal-fired
power plant in Ruse, Bulgaria.
MBO Bid Launched at Plastics and Steel Fittings Maker
Senior employees of the plastics and steel fittings maker Kovinoplastika Loz have launched a
takeover bid for the company
Senior employees of the plastics and steel fittings maker Kovinoplastika Loz have launched a
takeover bid for the company. The management buyout is being carried out through a
nominee company, which is offering EUR 16.6 per share in cash.
The nominee company is seeking to buy all 79.85% of the shares it does not yet own in a deal
that would be worth roughly EUR 37.5m. The bid published on Thursday, 10 May in business
daily Finance runs until 7 June, although it can be extended.
The company said it would consider the bid successful if it obtained at least a 29.95% stake,
raising its share to over 50%.
The nominee company has already filed a bid to buy a 26.34% state stake in Kovinoplastika
Loz put up for sale recently by the state-run Pension Management Fund and Restitution Fund.
Kovinoplastika Loz is by far the biggest company in the southwestern Notranjsko region,
employing 1,165 workers and generating sales of SIT 19.4bn (EUR 81m) in 2005. The
company operates branch offices in Poland, the Czech Republic, Romania, Germany, Croatia,
Bosnia-Herzegovina, Austria and Serbia-Montenegro.
Shares of Kovinplastika Loz are not listed.
Apparel CEO Leaving Mura after Five Years
In his five years at Mura, Meh managed to cut the losses of what will soon be the only clothes
maker to keep its production in Slovenia from EUR 12m in 2001 to EUR 624,000 last year
Borut Meh, the chairman of textile group Mura, has decided to leave the biggest company in
the north-eastern region of Pomurje after serving as its crisis manager for five years, dailies
Delo and Dnevnik report on Saturday, 12 May.
Meh, whose five-year term runs out on 15 August, did not want to disclose the reasons for his
departure, saying that he would say more at a news conference, scheduled for Monday, 14
May.
He did say however that he was not leaving for another job and is most certainly not getting
employment at household appliance manufacturer Gorenje, located in his home town of
Velenje.
In his five years at Mura, Meh managed to cut the losses of what will soon be the only clothes
maker to keep its production in Slovenia from EUR 12m in 2001 to EUR 624,000 last year.
He did so also by lowering wages and cutting the workforce by some 1,500 in the five years.
Mura's largest owner is the state-run SOD fund (12.2%), followed by brokerage Gorenjska
borzna druzba (11.8%), investment firms NFD Holding (6.9%), Vipa Holding (6.7%) and
Zvon dva Holding (6.5%) and Mura (5,7%).
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It is as yet unknown who will replace Meh at Mura's helm.
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FAIRS, CONGRESSES
Internautica Boat Fair Raises Anchor
This-year's Internautica showcased some 150 boats and featured around 1,000 companies
dealing with nautical equipment
The 12th Internautica, the biggest boat show in Slovenia, opened at the Portoroz Marina on
Tuesday, 8 May. This-year's Internautica, under way through 13 May, showcased some 150
boats and featured around 1,000 companies dealing with nautical equipment.
According to Jurij Korenc of Studio 37, the organiser of the event, the fair features the
majority of the world's leading nautical equipment manufacturers, the products on display
ranging from small canoes to super-yachts.
At the opening, Portoroz Marina director Boris Zupanc meanwhile pointed out that the fair
will satisfy the more nostalgic visitors, as Internautica traditionally coincides with an
Oldtimer meeting of owners of ageing boats.
Transport Minister Janez Bozic pointed out the significance of Internautica for Slovenian
nautical tourism, which is an important commercial activity.
According to Bozic, the Transport Ministry will support the development of nautical tourism
and make efforts in providing sea transport safety.
However, nautical equipment industry has to be followed with adequate measures in order to
reduce its negative impact on the environment and coastal areas, added Bozic.
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SLOVENIA IN BRIEF
Rupel Stresses UN's Key Role in Fighting Terrorism
Foreign Minister Dimitrij Rupel told foreign ministers from the EU and the Gulf states on
Tuesday, 8 May that the United Nations was playing a key role in fighting terrorism and that
the EU is highly committed to implementing all the UN's conventions and protocols on the
issue.
Environment Minister Ends Gas Terminal Speculations
Environment and Spatial Planning Minister Janez Podobnik has put an end to speculations on
a possible construction of a liquid natural gas terminal in the Port of Koper. The ministry can
unequivocally state that such a facility would be unacceptable, Podobnik said in Ljubljana on
Tuesday, 8 May.
Government Appoints Peter Jesovnik Acting Head of Investment Agency
Government appointed on Thursday, 10 May Peter Jesovnik the acting head of the Public
Agency for Entrepreneurship and Foreign Investment. The appointment comes after former
director Franc Hoffmann resigned on April 25 citing personal reasons. Jesovnik, currently a
deputy director in the Government Office for European Affairs, was appointed to the post
until a new director is elected or for a maximum of six months.
Government Adopts Bill on Privatisation of Trade Union Property
The government adopted on Thursday, 10 May a bill on the privatisation of real estate in
social ownership used by the predecessor of today's trade unions. Public Administration
Minister Gregor Virant told the press that this was the last case of socially-owned real estate
in Slovenia.
Labour Committee Confirms Motion on Foreign Labour
The parliamentary Committee on Labour, the Family, Social Policy and the Disabled
confirmed on Friday, 11 May amendments to the legislation dealing with foreign labour
which are designed to reduce administrative barriers in acquiring working permits. The
motion brings the current act in line with the European legislation. It introduces stricter
conditions for self-employment of foreign workers, but are to make it easier for foreign
researchers and students to enter the market.
Minister Calls for Social Protection of Immigrants in EU
Slovenia set up safe houses and a social care system for asylum seekers, while it has all but
equalled their social rights with those of its citizens, Interior Minister Dragutin Mate said on
Friday, 11 May and called on other countries to do the same in order to reduce tensions.
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