Slovenia Business Week no 36, November 13, 2006
HEADLINES
Slovenian Inventors Awarded at International Innovation Fair
Slovenian inventors were successful at the IENA 2006 international fair "Ideas, Inventions,
New Products", as they received three gold, two silvers and one bronze medal
Slovenian inventors were successful at the IENA 2006 international fair "Ideas, Inventions,
New Products", as they received three gold, two silvers and one bronze medal, an association
of inventors has said.
Gold medals were presented to Ivan Zrimsek and Sergej Vesenin for the scanner for early
detection of breast cancer, and Valentin Zupan for a new generation of accordions. Zrimsek
and Vesenin also received one of the three main awards at the fair.
Silver medals were bestowed on Albin Smrke for multi-sensor technology for automatic
regulation of energy, and Nina Vojvoda for her multi-functional chair. Marijan Mlekuz
received a bronze for his wineglass.
The company Remax received another gold medal for their water fitness programme Retefit.
At the fair, which took place between 2 and 5 November in Nuremberg, Germany, 560
inventors from 32 countries presented 692 innovations, the association Active Slovenian
Inventors said in a press release.
Macroeconomic Indicators the Best so Far, PM Says
The PM is convinced that the indicators are reason enough for even greater optimism
regarding the impeding 1 January 2007 euro changeover
The relations between key macroeconomic indicators have never been so good in Slovenia,
PM Janez Jansa told the press on Wednesday, 8 November, after the European Commission
projected that Slovenia's gross domestic product (GDP) growth will reach 4.8% in 2006,
while the inflation rate is to stand at 2.5%.
The PM is convinced that the indicators are reason enough for even greater optimism
regarding the impeding 1 January 2007 euro changeover.
"Slovenia will become a part of the interior circle of the EU's developed countries, which will
in itself boost its reputation and improve opportunities for the Slovenian economy," Jansa
added.
According to Jansa, while business conditions will not radically change in the short term, the
stability of public finances will improve and business operations will be simplified.
As a new, simpler and friendlier tax system will also enter into force on 1 January, labour
costs will be gradually reduced, he said. Parliament passed the government package of tax
laws earlier in the month.
The gradual reduction is necessary because loss of budget revenues will have to be
compensated somehow after what Jansa termed "the most radical reduction in labour costs so
far".
Jansa moreover believes that the business environment will become much friendlier in the
coming year, increasing the possibilities for achieving even better economic results.
Slovenia is also reducing its budget deficit, not by reducing the scope of social and other
rights, but through cost cutting by the state, the PM explained.
GDP Growth Robust but Heading for a Slowdown
The latest data suggest that the pace of GDP growth is as brisk as it was at the beginning of
the year, however the Institute for Macroeconomic Analysis and Development (IMAD)
believes the pace will slow down somewhat early next year, in particular due to the VAT hike
in Germany
The latest data suggest that the pace of GDP growth is as brisk as it was at the beginning of
the year, however the Institute for Macroeconomic Analysis and Development (IMAD)
believes the pace will slow down somewhat early next year, in particular due to the VAT hike
in Germany.
Due to the value added tax increase in Germany investors and consumers are pushing back
spending before the expected price increase, which has boosted exports orders in Slovenia,
IMAD director Janez Sustersic told the press on Thursday, 9 November as he presented
Autumn Report 2006, the in-depth analysis of the think-tank's September economic forecast
that the government confirmed on 9 November.
The strong export growth is one of the reasons why the economy is on track to expand by
4.7% this year with inflation at 2.7%, which IMAD forecast in September. What is more, oil
prices dropped soon after the September forecast, so inflation is indeed lower than projected,
Sustersic said.
In 2006 growth is projected to slow down to 4.3%, but this is still higher than IMAD expected
earlier this year. Sustersic said that the impact of the international environment, which was
crucial this year, will be lower, but tax laws will kick in and boost domestic spending.
According to Sustersic, the lower income tax rates will contribute 0.3 percentage points to
private consumption, which is still within the framework of macroeconomic sustainability and
poses no risk to the overheating of the economy.
On the other hand, the effects of the new corporate tax act, which will gradually cut the rate
from 25% to 20% in 2010, will not have an impact on investment spending in 2007 as the
general investment relief has been phased out. It is expected that the impact will be felt in
2008, Sustersic said.
Another positive factor will be the ongoing phasing out of the payroll tax, which will be
abolished in 2009. The labour market will meanwhile receive a boost in the form of greater
work activity as a result of lower taxes.
The main factor of risk in 2007 is pressure on consumer prices following the introduction of
the euro on 1 January, and the full liberalisation of the electricity market in July. However,
IMAD believes that the risks are small so they were not taken into account in the forecast for
2007.
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INTERNATIONAL COOPERATION
Cukjati Visits Canadian Parliament
Speaker of Parliament France Cukjati continued his official trip to Canada with a visit to the
Canadian Parliament where he met his counterpart Peter Milliken and Parliamentary
Secretary to the Minister of Foreign Affairs Peter Van Loan
Speaker of Parliament France Cukjati continued his official trip to Canada on Monday, 6
November with a visit to the Canadian Parliament where he met his counterpart Peter
Milliken and Parliamentary Secretary to the Minister of Foreign Affairs Peter Van Loan.
According to sources close to the Slovenian delegation, Cukjati and Van Loan established that
the two countries shared a number of views concerning international issues and that they
would like to deepen their cooperation.
The pair also touched on the participation of Canada and Slovenia in peace-keeping missions
in the Balkans, with Cukjati praising Canada's role in the region.
While Van Loan congratulated Slovenia upon its upcoming stint as EU president, Cukjati also
broached the subject of Slovenia's endeavours to join the OECD, arguing that it met all
membership requirements.
Van Loan said that he was Slovenia's ally in this regard and that he was pushing for the
Canadian government to take a position on an expansion of the 30-member OECD.
The Slovenian parliamentary speaker also inquired why Prime Minister Stephen Harper
cancelled his attendance at the 27 November EU-Canada summit in Tampere, Finland, with
Van Loan explaining that the minority government situation in Canada often required the
presence of the PM at home.
Cukjati was moreover assured that Canada in no way underestimated the relations with the
EU and also that Harper would attend the NATO summit in Riga on 28 and 29 November.
The talks with Milliken dealt with very much the same issues. Cukjati took the opportunity to
thank his opposite number for Canada's support to the Slovenian-run International Trust Fund
for Demining and Mine Victims Assistance.
Cukjati also pointed to the need to create mechanisms that would enable Canada and the EU
to demonstrate their positions concerning international issues, which they share to a very large
extent.
Cukjati, who is also accompanied by the chair of the Slovenia-Canada friendship committee
Marko Pavliha, the chair of the foreign policy committee Jozef Jerovsek and the deputy chair
of the commission for Slovenians abroad Miro Petek, will continue his visit on Tuesday, 7
November by meeting Lorno Milna, the chair of the Canada-Europe Parliamentary
Association among others.
The Slovenian delegation will wrap up its five-day trip in Toronto on Wednesday, 8
November by meeting officials from the City of Mississauga, which hosts the Slovenian
Consulate led by Honorary Consul General Joze Slobodnik.
Drnovsek Receives Credentials of Three New Ambassadors
President Janez Drnovsek has received credentials from three new ambassadors, namely
Argentina's Eugenio Maria Curia, Australia's Peter Shannon and Georgia's Nikoloz
Nikolizhvili
President Janez Drnovsek has received credentials from three new ambassadors, namely
Argentina's Eugenio Maria Curia, Australia's Peter Shannon and Georgia's Nikoloz
Nikolizhvili.
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All three will be non-resident ambassadors: Curia and Shannon will be stationed in Vienna,
while Nikolizhvili will cover Slovenia from Bratislava, the president's office said on Tuesday,
7 November.
Drnovsek and Curia agreed that relations between Slovenia and Argentina were good and that
Slovenians in Argentina established an important tie between the two countries.
Shannon meanwhile emphasised the active role of the Slovenian community in multicultural
Australia, while Drnovsek described relations between Slovenia and Australia as good,
friendly and developed in all areas.
Nikolozishvili acquainted Drnovsek with the political situation in Georgia and stressed the
importance process of joining the EU and NATO for his country.
Nikolozishvili and Drnovsek also discussed the importance of good relations with
neighbouring countries.
The three new ambassadors handed the copies of their credentials to Foreign Minister Dimitrij
Rupel.
Speaker Cukjati Continues Visit to Canada
The hosts were interested in Slovenia's taking over the euro on 1 January 2007 and its EU
presidency in the first half of 2008
Parliament Speaker France Cukjati continued his official trip to Canada on Tuesday, 7
November with another visit to the Canadian Parliament where he met Lorna Milne, the chair
of the Canada-Europe Parliamentary Association, Kevin Sorenson, Chair of the Standing
Committee on Foreign Affairs and International Development, and Senate President Noel
Kinsella.
According to sources close to the Slovenian delegation, Cukjati discussed with his hosts very
much the same issues as he did on Monday, 6 November. The hosts were interested in
Slovenia's taking over the euro on 1 January 2007 and its EU presidency in the first half of
2008.
Cukjati told his hosts that Slovenia appreciates Canada's contribution to peace-keeping
missions, especially in the Balkans. They agreed that Slovenia's and Canada's views on
international issues are similar.
They also discussed the Human Security Network, a human rights organisation established by
Canada and Norway and currently presided over by Slovenia.
Milne and Cukjati touched on the subject of migrations. Answering Milne's question, whether
Slovenia is worried about the increase in migrations now that it is a member of the EU,
Cukjati explained that Slovenia has a very low birth rate and has accepted immigrants from
the former Yugoslav republics before. Milne explained that Canada is in a similar situation.
Discussing the European constitutional treaty, Cukjati told Milne that this will be one of the
main issues during Slovenia's EU presidency.
Meanwhile, Kinsella and Cukjati discussed the possibility of developing cooperation between
Canadian ports and port Koper.
Talking to Sorenson, Cukjati again brought up the question of Slovenia's joining the
Organisation for Economic Co-operation and Development (OECD) and Sorenson assured
him that OECD members are discussing Slovenia's petition to join the organisation.
Rupel Receives New French Ambassador
The pair took the opportunity to highlight the very good relations between the two countries
Foreign Minister Dimitrij Rupel received on Friday, 10 November the credentials of Chantal
de Ghaisne de Bourmont, the incoming French ambassador. The pair took the opportunity to
highlight the very good relations between the two countries.
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According to a press release by the Foreign Ministry, Rupel stressed that France is an
important partner for Slovenia in many areas; it notably ranks fourth in the list of Slovenia's
economic partners.
The pair agreed that there are still numerous opportunities for improving cooperation, one of
the most important being Slovenia's preparations for its stint as EU president that will precede
France's.
De Ghaisne de Bourmont even highlighted the strengthening of dialogue in the context of the
two country's EU presidencies as one of the most important elements of her activities in
Slovenia.
Meanwhile, France and Slovenia are already cooperating intensively in the field of education.
De Ghaisne de Bourmont is taking over from Dominique Gazuy, who was France's
Ambassador to Slovenia from October 2003.
PM Jansa Begins Visit to Saudi Arabia
Prime Minister Janez Jansa arrived in the Saudi capital, Riyadh, on 11 November for the
start of a five-day tour that will also take him to neighbouring Kuwait
Prime Minister Janez Jansa arrived in the Saudi capital, Riyadh, on Saturday, 11 November
for the start of a five-day tour that will also take him to neighbouring Kuwait.
The first ever visit by a top Slovenian official to Saudi Arabia is aimed at bolstering political
and business ties between the countries.
Jansa is accompanied by Economy Minister Andrej Vizjak, Foreign Minister Dimitrij Rupel,
Defence Minister Karl Erjavec and Health Minister Andrej Brucan, who are scheduled to hold
bilateral meetings with their Saudi counterparts.
Moreover, a large business delegation, consisting of 60 Slovenian executives, is also
travelling with the prime minister.
While there has been no Slovenian investment in Saudi Arabia, Saudi foreign direct
investment (FDI) in Slovenia has totalled a mere EUR 600,000.
However, the Slovenian investment balance sheet is set to improve, as Jansa is due to open a
production facility of Slovenian electrical installations products and services company ETI
and electronic meters maker Iskraemeco and their Saudi partner MEMF.
Slovenian trade with Kuwait meanwhile stood at EUR 3m in 2005, with Slovenian exports
accounting for 98% of that amount.
Slovenia and Saudi Arabia Sign Cooperation Agreement
Slovenia and Saudi Arabia signed a general cooperation agreement and a memorandum of
understanding between their foreign ministries in Riyadh part of Prime Minister Janez
Jansa's three-day visit to the kingdom
Slovenia and Saudi Arabia signed a general cooperation agreement and a memorandum of
understanding between their foreign ministries in Riyadh on Saturday, 11 November, as part
of Prime Minister Janez Jansa's three-day visit to the kingdom. The development has been
labelled a milestone for Slovenian foreign policy in the Middle East by Slovenian FM
Dimitrij Rupel.
The general cooperation agreement was signed by Slovenian Economy Minister Andrej
Vizjak and Saudi Minister of State for Foreign Affairs Nizar Madani. Madani and Rupel
signed the memorandum on cooperation between the Saudi and Slovenian foreign ministries.
According to Vizjak, the document on general cooperation forms the basis for building closer
ties between Slovenia and Saudi Arabia. Rupel stressed that the two countries had not
developed relations so far, which is why today's development is of great importance.
Building closer ties with Saudi Arabia, an important regional player, is imperative also from
the viewpoint of Slovenia's stint as EU president in the first half of 2008, Rupel suggested.
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Sitting on the biggest reserves of crude oil in the world, Saudi Arabia is an energy
powerhouse. According to Rupel, relations with the country are important as Slovenia makes
energy stability a priority of its EU presidency.
Vizjak told the Slovenian press that along with the general cooperation agreement, a SaudiSlovenian business conference and the opening of a plant built by two Slovenian companies
with their Saudi partner were a good basis for further economic cooperation.
Vizjak took the opportunity to invite Madani to Slovenia. He also issued a call to Saudi
business officials to invest in Slovenia, adding that the biggest opportunities lie in the
development of logistics hubs.
Vizjak and Madani also discussed the launch of a shipping route between Slovenia's port of
Koper and ports in Saudi Arabia, which would give Slovenia access to Middle Eastern
markets, including Iraq. The Iraqi market is expected to blossom once the security situation
there stabilises, Madani is said to have told Vizjak.
Moreover, the shipping route could also present a gateway for Slovenian products to other
Asian markets, including India, Vizjak said.
The signing of the two agreements took place after a round of official talks between the
Slovenian and Saudi delegations on Saturday, 11 November.
The first ever visit by a top Slovenian official to Saudi Arabia is aimed at bolstering political
and business ties between the countries.
Trade between Slovenia and Saudi Arabia amounted to EUR 14.1m in 2005, with Slovenian
exports totalling EUR 13.9m.
While there has been no Slovenian investment in Saudia Arabia until now, Saudi foreign
direct investment (FDI) in Slovenia has totalled a mere EUR 600,000.
PM Jansa Calls on Saudi Businessmen to Invest in Slovenia
Slovenian Prime Minister Janez Jansa called on Saudi businessmen to increase their
investments into Slovenia, as he addressed the participants of a Saudi-Slovenian business
conference in Riyadh
Slovenian Prime Minister Janez Jansa called on Saudi businessmen to increase their
investments into Slovenia, as he addressed the participants of a Saudi-Slovenian business
conference in Riyadh on Sunday, 12 November.
Jansa mainly stressed investments into finance and banking, telecommunications, trade,
tourism and information technology, while also labelling Slovenia as a starting point for Saudi
investments into other EU states and the Balkans.
There are great possibilities for improving economic cooperation between the two countries,
the prime minister added at the conference, attended by over 100 Slovenian and Saudi
businessmen and organised as part of his visit to the kingdom.
Jansa pointed to developed infrastructure, closeness to almost all more important markets and
Slovenian experience with markets of the former Yugoslavia as the country's main attributes.
Saudi Minister of Commerce and Industry Hashim Al Yamani meanwhile called on Saudi and
Slovenian businessmen to search for opportunities to complement each other, adding that both
Slovenia and Saudi Arabia hold a strategic geographic position in their respective regions.
Al Yamani moreover believes that Jansa's visit will allow direct trade between the two
countries, while Slovenian products now come to Saudi Arabia through intermediaries.
He also invited Slovenian companies to take part in Saudi infrastructure projects, for which
the government intends to allocate US$ 624bn in the next 15 years, and called for establishing
a direct shipping link between Saudi ports and the port of Koper.
In the morning, Jansa also met Riyadh Governor Salman Al Saud. He is expected to meet
Saudi King Abdallah Al Saud later in the day.
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On Saturday, 11 November, Slovenia and Saudi Arabia signed a general cooperation
agreement and a memorandum of understanding between their foreign ministries.
PM Jansa, Saudi King Discuss Bilateral Cooperation
Slovenian Prime Minister Janez Jansa said that Saudi Arabia promised to cooperate with the
EU in energy security, after holding talks with Saudi King Abdallah bin Abd al-Aziz Al Saud
in Riyadh
Slovenian Prime Minister Janez Jansa said that Saudi Arabia promised to cooperate with the
EU in energy security, after holding talks with Saudi King Abdallah bin Abd al-Aziz Al Saud
in Riyadh on Sunday, 12 November.
The Slovenian side was assured that Saudi Arabia would cooperate with the EU on issues of
energy security and inter-cultural dialogue during Slovenia's stint as EU chair in the first half
of 2008, Jansa added.
"The king stressed the importance of personal contacts between Slovenian and Saudi
representatives for strengthening economic and political cooperation", Jansa said after the
meeting.
"The Slovenian side presented Slovenia and its economy and expressed its readiness to open a
business and diplomatic mission in Saudi Arabia," he said.
Slovenia and Saudi Arabia have not known a lot about each other so far, so the visit of the
government and business delegation is a turning point and a foundation for strengthening
political and economic contacts, he added.
According to Jansa, the general cooperation agreement and a memorandum of understanding
between the two countries' foreign ministries, signed on Saturday, 11 November, present a
basis for potential other agreements, such as on investment protection.
Jansa is to wrap-up his visit to Saudi Arabia on Monday, 13 November and travel on to
Kuwait.
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EUROPEAN UNION
New EU Airport Security Measures Pose No Problems at Brnik
The Ljubljana airport, located at Brnik, suffered no delays after the European Commission
regulations on liquids allowed on airplanes entered into force across the EU on 6 November
The Ljubljana airport, located at Brnik, suffered no delays after the European Commission
regulations on liquids allowed on airplanes entered into force across the EU on Monday, 6
November.
According to Brigita Zorec, spokesperson for the airport operator Aerodrom Ljubljana,
business at Brnik is going on as usual, as the majority of the passengers are well informed
about the new regulations.
The morning rush hour went off without glitches or major delays, and the airport expects the
same to happen in the afternoon peak, Zorec told STA.
She explained that it seems that the airport operator was "quite effective in informing the
passengers". The airport also prepared plastic bags for passengers to transfer their liquids.
The new rules allow passengers to carry liquids in containers no larger than 100 milliliters in
their hand luggage, packed in transparent one-litre bags.
They came in response to recently uncovered plot to use liquid explosives on board flights
from the UK to the US.
The limitations apply to all liquids, including hair and shower gels, foams, lotions, toothpaste,
drinks, soups and syrups.
European Commission Says Slovenian Workers Among the Least Mobile
Slovenia's labour force is among the least geographically mobile in the EU, as only 2.2% of
Slovenians said that they wanted to work abroad in the next five years
Slovenia's labour force is among the least geographically mobile in the EU, as only 2.2% of
Slovenians said that they wanted to work abroad in the next five years. The number
meanwhile stands at 7% in Poland, Lithuania, Latvia and Estonia, according to data released
by the European Commission on Monday, 6 November.
The number, while remaining the same as before Slovenia joined the EU, is also lower than in
the majority of the EU-15. The Commission thus said that Slovenians do not threaten labour
markets in other EU states.
Geographic mobility of the labour force is an important component for facing today's
challenges of the labour market in the expanded EU, however, less than 2% of workers lives
outside their states of origin, the yearly report on unemployment across the bloc also reveals.
The report also says Slovenia's participation rate stood a 66% in 2005, up 0.7 percentage
points over 2004 and 3.2 percentage points over 2000.
The EU-25 has also seen a 0.5 percentage points increase in the overall employment rate,
which stood at 63.8% in 2005. The EU's unemployment rate meanwhile fell to 8.7% in 2005,
0.4 percentage points less than in 2004.
Slovenia's employment rate for women stood at 61.3% in 2005, 0.8 percentage points more
than in 2004. This puts Slovenia closer to Denmark and Sweden's rate of over 70% than to
Malta's 34%.
The employment rate among the elderly stood at 30.7%, up 1.7 percentage points. The
working week overall averaged 40.1 hours.
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Labour Minister Regrets Failed Working Time Directive Talks
EU labour ministers failed to endorse a compromise deal on working hours in the EU, which
had been put forward by the Finnish EU presidency
EU labour ministers failed to endorse a compromise deal on working hours in the EU, which
had been put forward by the Finnish EU presidency. Slovenia expressed its support for the
Finnish deal, but with "minor additions", Labour Minister Janez Drobnic told STA after the
meeting on Tuesday, 7 November.
The core of the dispute lay in the opt-out from the EU's 48-hour maximum working week,
with Drobnic adding that the opt-out is necessary and Slovenia was searching for a
constructive solution and even gave some proposals which made it to the final version of the
document.
Five members of the EU-25 meanwhile wanted to set a definite date for the end of the opt-out.
According to Drobnic, the consequences of the failed talks mean that the old regulations
remain in place, despite being much less friendly to safety and health at work than the Finnish
proposal.
Regarding the announced measures by the European Commission against 23 EU member
states, including Slovenia, which violate the existing working time legislation, Drobnic said
that Slovenia will do its best to act in line with the legislation.
Retaining the opt-out is not only important from the vantage point of safety and health at
work, but also for health services. "As stressed by my German colleague, Germany could not
have carried out the World Cup if it was not for the opt-out," Drobnic noted.
Opt-out is mainly backed by the UK, while the opposing camp consists of France, Italy,
Spain, Greece and Cyprus, which used the blocking minority to prevent the passage of the
working time directive. The five countries want the opt-out to be abolished in approximately
ten years' time.
Bajuk Downplays EU Projections of Financial Sustainability
Based on the projections, Slovenia was placed among the group of high-risk countries, even
though its deficit and debt are currently among the lowest in the EU, while in the mid-term
they are expected to improve, Bajuk said at the sidelines of a meeting of EU finance ministers
in Brussels
Finance Minister Andrej Bajuk has labelled the European Commission projections regarding
the long-term financial sustainability of the country's public finances as just that - projections.
"The report does not include forecasts, but projections. Projections of what could happen if
states do not take adequate measures," Bajuk said on Tuesday, 7 November.
Based on the projections, Slovenia was placed among the group of high-risk countries, even
though its deficit and debt are currently among the lowest in the EU, while in the mid-term
they are expected to improve, Bajuk said at the sidelines of a meeting of EU finance ministers
in Brussels.
Threats to the sustainability of public finance due to the ageing population are not faced by
any country at the moment, and the situation will remain like that until 2020. Long-term
projections for the period after 2020 would be better used as a warning and a call for
measures, not as a fact, Bajuk explained.
The European Commission placed Slovenia as one of six countries most vulnerable to face
problems with the sustainability of public finances in its report published on 12 October.
It moreover said that the country was among the three EU members that are expected to face
the most serious consequences of ageing on the budget because of the growing spending on
pensions. The Commission therefore called on Slovenia to urgently enact changes to the
pension system.
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Bajuk warned after the meeting that the projections point to what could happen if nothing gets
done and in such a case, Slovenia faces problems after 2020.
The EU finance ministers meanwhile failed to agree on two tax issues, namely raising the
excise duty on alcohol and lower tax rates on electronic newspapers, none of them crucial for
Slovenia, Bajuk added.
Expert Group Confirms Joint EU Presidency Plan
The working group tasked with Slovenia's preparation for its stint at the helm of the EU
confirmed a joint 18-month presidency plan drafted by Germany, Portugal and Slovenia in
cooperation with the General Secretariat of the EU Council
The working group tasked with Slovenia's preparation for its stint at the helm of the EU
confirmed on Wednesday, 8 November a joint 18-month presidency plan drafted by Germany,
Portugal and Slovenia in cooperation with the General Secretariat of the EU Council.
The group, headed by Prime Minister Janez Jansa, was notified that the expenses for
Slovenia's stint as EU president in the first half of 2008 would remain unchanged at SIT
13.7bn (EUR 57.21m), according to a press release by the PM's Office.
The programme is expected to be adopted by the government in the second half of November,
whereupon it will be presented to deputies at a joint session of the EU affairs and foreign
policy committees.
The EU is expected to confirm the programme at the December session of the EU General
Affairs and External Relations Council.
The members of the group also discussed the calendar of events with third countries, with the
final extent of Slovenia's obligations to be unveiled in 2007.
The group moreover confirmed half-yearly results on the progress of the preparations of the
subgroups, the logistics centre, Slovenia's permanent representation at the EU and individual
ministry for the country's stint, and adopted the operational three-month working plan for the
subgroups.
The government established the group in January 2005. It includes Foreign Minister Dimitrij
Rupel, Finance Minister Andrej Bajuk, Public Administration Minister Gregor Virant and the
head of the Government Office for European Affairs (SVEZ) Janez Lenarcic.
Galileo Supervisory Authority Pleased with Government Commitment
The Supervisory Authority of the European satellite navigation system Galileo has witnessed
the dedication of the Slovenian government regarding the country's bid to host the body
The Supervisory Authority of the European satellite navigation system Galileo has witnessed
the dedication of the Slovenian government regarding the country's bid to host the body,
Pedro Pedreira, executive director of the authority said in Ljubljana on Wednesday, 8
November.
After holding talks with Slovenian Transport Minister Janez Bozic and Higher Education,
Science and Technology Minister Jure Zupan, Pedreira added that he saw that the government
was aware of the long-term effects of the use of satellite navigation, especially the Galileo
project, for the public.
According to him, the EU Transport Council is expected to decide on the country to host the
supervisory body at its December session. Slovenia's chances are difficult to assess, he noted
and pointed out that he was impressed by Slovenia's presentation of its bid in Brussels on
Monday, 6 November.
Zupan meanwhile said that Slovenia saw not only direct benefits of the system, for example in
transport, but also understood it as "an infrastructure throughout Europe, as a new industry
that will allow the development of a host of new services, products and procedures".
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He pointed to the benefits of using Galileo in seafaring, energy transfers, information
technology, agriculture and the environment.
Slovenia wishes to serve as an example in the EU and wants to show as an equal and
advanced partner how this new technology can create new jobs and advance industry and
research in Europe, Zupan said.
Bozic meanwhile said that the country invited Pedreira in order to let him see for himself how
serious Slovenia's bid was.
Pedreira, Zupan and Bozic also agreed that fears of privacy invasion must be addressed if the
public is to accept the system.
According to plans, Galileo will become operational in 2011, with 30 satellites expected to be
used by the system.
The Galileo supervisory authority manages and monitors the use of EU funds allocated for
European satellite navigation programmes.
Galileo is the first European space programme that is financed and managed by the European
Union in cooperation with the European space Agency.
Slovenia Continues to Support EU Prospects of Balkan Countries
Slovenia supports continued enlargement of the EU as the enlargement policy and the
prospects of joining the 25-nation bloc have proved an effective instrument for the promotion
of reforms
Slovenia supports continued enlargement of the EU as the enlargement policy and the
prospects of joining the 25-nation bloc have proved an effective instrument for the promotion
of reforms, the Government Office for European Affairs (SVEZ) said on Wednesday, 8
November in response to the release of the Union's enlargement strategy.
The government office welcomed the position of the European Commission that the
enlargement strategy would continue to be focused on strengthening the EU's commitment to
the countries that have embarked on the path to joining the EU.
The quality of the enlargement process is the key to the Union's successful functioning, SVEZ
said. Slovenia shares the Commission's view that the candidates must meet all criteria for
accession, whereas the bloc must place greater emphasis on informing the people on the
benefits of enlargement.
Enlargement and the strengthening of the EU's institutions must proceed hand-in-hand, SVEZ
said, adding that Slovenia voiced clear support for institutional reforms with the ratification of
the constitutional treaty.
Foreign Ministry Hails EU Progress Reports
Slovenia's Foreign Ministry has hailed the EU enlargement strategy and progress reports
released by the European Commission, saying they represent a "balanced and considered
account of the state of affairs" in the countries progressing towards EU membership
Slovenia's Foreign Ministry has hailed the EU enlargement strategy and progress reports
released by the European Commission on Wednesday, 8 November, saying they represent a
"balanced and considered account of the state of affairs" in the countries progressing towards
EU membership.
Referring to the progress reports for Croatia, Turkey and Western Balkan countries, the
ministry said the European Commission clearly highlighted the achievements as well as
problems that the acceding countries would have to tackle in the future.
The ministry sees the EU accession process as a contribution to all-round political and
economic progress. As an instrument to implement the necessary reforms, the EU accession
process is mainly in the interest of the countries progressing towards the bloc, the ministry
said in a press release distributed late on Wednesday, 8 November.
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Slovenia shares the Commission's opinion that further enlargement must go hand in had with
the Union's consolidation. The ministry notes that Slovenia has made its position clear by
ratifying the constitutional treaty and by affirming itself as an advocate of further
enlargement.
The ministry hails the clear commitment to enlargement to the Western Balkans as expressed
in progress reports, wishing that the countries in the region would make speedy progress on
their respective European paths.
Slovenia will continue to provide these countries with the necessary assistance and support,
the ministry's press release reads, adding it is "in Slovenia's strategic interest for the European
spirit, stability and progress to get fully established in the area between Slovenia and Greece".
Minister Announces Changes to Working Time Provisions
Even though the EU's labour ministers have failed to reach agreement on the working time
directive, Slovenia is moving ahead with bringing its legislation in line with the 2004 ruling of
the Court of the European Communities
Even though the EU's labour ministers have failed to reach agreement on the working time
directive, Slovenia is moving ahead with bringing its legislation in line with the 2004 ruling
of the Court of the European Communities, Labour Minister Janez Drobnic revealed on
Friday, 10 November.
The court said in 2004 that inactive work (for example being on-call) should be treated as
regular work, which 23 member states fail to comply with. Unlike in other countries, where
doctors are the main problem, the biggest changes in Slovenia will be implemented for police
officers, soldiers and firefighters, Drobnic explained.
The failure to reach agreement on the working time directive, which redefines exemptions
from the 48-hour week, means that the EU will consider the court ruling more consistently.
"We are firmly committed to inserting this provision in national legislation," Drobnic said.
According to Drobnic, the member states which insisted on the general opt-out from the 48hour week blocked agreement and in effect reduced the social security of the workers.
At the labour ministers' meeting in Brussels on Tuesday, 7 November Slovenia supported the
Finnish proposal for the preservation of the general opt-out but its abolition over the long
term.
The reason why the opt-out should be preserved is due to a shortage of staff in industries with
a lot of standby duty, said Drobnic, who believes the opt-out should be preserved only in
industries where it is needed.
The Finnish proposal was blocked by five member states (France, Italy, Spain, Greece and
Cyprus) which demanded a precise date for the elimination of the opt-out.
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STATISTICS/FORECASTS
EU Projects 4.8% Growth, 2.5% Inflation for Slovenia in 2006
The Commission's autumn forecast upgraded Slovenia's economic growth by 0.5 percentage
points compared to its May projections
The European Commission has projected Slovenian gross domestic product (GDP) growth to
reach 4.8% in 2006, while the inflation rate is to stand at 2.5%.
The Commission's autumn forecast, released on Monday, 6 November, upgraded Slovenia's
economic growth by 0.5 percentage points compared to its May projections. The inflation rate
projection was upped by 0.1 percentage point.
For 2007, the Commission expects Slovenian economic growth to slow down to 4.2%, and
rise again to 4.5% in 2008. The country's inflation is projected to stand at 2.5% in 2007 and to
increase marginally to 2.6% in 2008.
The Commission forecasts EU-25 economic growth to stand at 2.8% in 2006 with the
inflation rate at 2.3%.
Foreign Trade Boosted in September
Slovenia exported EUR 1.48bn worth of goods in September
Slovenia exported EUR 1.48bn worth of goods in September, up 10.4% year-on-year. Imports
increased by 9.1% to EUR 1.59bn, according to the preliminary report released by the
National Statistics Office on Thursday, 9 November.
The trade gap was down almost one third on August, to EUR 107.1m, while the export-import
ratio went up to 93.2% from 88% in August.
Exports in the first three quarters of this year amounted to EUR 12.23bn, up 15.6% over the
same period last year. At the same time imports increased by 15.4% to EUR 13.12bn. The
trade gap stood at EUR 890.1m and the export-import ratio was 93.2%.
During this time imports from the EU increased by 13.1% to EUR 10.47bn, while imports
from other countries surged by 25.9% to EUR 2.64bn. Exports destined for EU member states
went up by 16.6% to EUR 8.39bn. The rest EUR 3.83bn (up 13.5%) was exported to other
markets.
Factory Gate Prices Up 2.7% Y/Y
Factory gate prices rose by a marginal 0.1% in October over September
Factory gate prices rose by a marginal 0.1% in October over September, while they added
2.7% year-on-year, according to the National Statistics Office. The increase since the
beginning of the year was 2.2%.
The year-on-year increase was mainly due to a 3.1% price rise in the manufacturing sector.
Prices in electricity, gas and water supply were up 1.1%, followed by a 0.8% increase in
mining and quarrying and 0.4% in agriculture, game and forestry.
A 1.7% price rise in mining and quarrying meanwhile contributed most to the monthly
increase in factory-gate prices. The manufacturing sector marked its prices up 0.6%, while
prices in agriculture, game and forestry stayed put. A 2.6 drop in prices was recorded in the
electricity, gas and water supply.
The only group of products that was dearer in October than September was consumer goods
(0.9%). The prices in this group added 4% at the annual level.
13
EU Survey: 46% of Slovenians Believe They Are Overweight
The EU-wide survey centred on health, food and eating habits of Europeans, showing that
57% of Slovenians believe that they are in good health, approximately the same number as in
the rest of the EU
While 38% of Europeans believe that they are overweight, the percentage of Slovenians
sharing this belief stands at 46%, according to the results of a Eurobarometer survey,
presented in Brussels on Thursday, 9 November.
The EU-wide survey centred on health, food and eating habits of Europeans, showing that
57% of Slovenians believe that they are in good health, approximately the same number as in
the rest of the EU.
According to the survey, the average European is 169.9 centimetres tall and weighs 72.2
kilograms. The data also shows 55% of Europeans believing that their weight is just right.
One in five respondents also said that he was on a slimming diet in the last 12 months, with
the largest percentage coming from Malta (32%), followed by Cyprus and Finland (both at
31%). Meanwhile, 25% of Slovenians admitted that they wanted to loose weight through a
dietary change in the last year.
Eating habits were meanwhile changed by 22% of Europeans in the last year, with the largest
percentage (55%) saying that they will eat more fruit and vegetables. 53% of respondents said
that they will cut down on fat, while 43%, respectively, said that will drink more water and
consume less sweets.
According to the results, fat is the least desired dietary category among the Danes and
Slovenians (68%). 49% of Slovenians also opted to eat less sweets, while 22% said they
would consume less alcohol in order to improve their health.
The survey also touched on physical activities during work, with 46% of Europeans saying
that their jobs do not include such activities.
A total of 42% of Slovenians performed no physical activities at work in the last week, 21%
performed some and 16% did a lot of physical work.
Meanwhile, a total of 21% of Europeans said that they undertook sports activities in the last
seven days. The percentage for Slovenians stands at 34%.
Industrial Output Expands by 7.5% in September
Slovenia's industrial output increased by 7.5% year-on-year in September, while it expanded
23% over the previous month
Slovenia's industrial output increased by 7.5% year-on-year in September, while it expanded
23% over the previous month. According to a report from the National Statistics Office on
Friday, 10 November, the output in the first three quarters of the year exceeded by 7% the
output in the same period last year.
The annual growth in Slovenia's industry was mainly due to the 9.9% increase in the output in
mining and quarrying. The manufacturing sector increased its production by 7.5% and the
electricity, water and gas supply by 3.5%.
The output of capital goods went up by 17.9% and that of raw materials by 7.2%. The volume
in the category of intermediate goods expanded by 6.8%.
Internet Use in Slovenia on Par with EU Average
Nearly half of Slovenians use the Internet at least once a week, which is on par with the
average in the EU, a European survey has found
Nearly half of Slovenians use the Internet at least once a week, which is on par with the
average in the EU, a European survey has found.
According a report from the European statistics office, Eurostat, 47% of Slovenians were
found to have been using the Internet on a weekly basis in the first quarter of 2006.
14
The percentage of regular Internet users in Slovenia was highest among the 16 to 24 yearolds, as 81% of them said they went online at least once a week. The percentage is above the
EU average of 73%.
The Eurostat report ranks Slovenia slightly above the European average of households and
companies having an Internet connection. The report shows that 54% of Slovenian households
have an Internet connection, whereas the EU average is 52%.
The survey found that 96% of Slovenian companies are connected to the web, which is also 2
percentage points above the EU average.
Slovenia also placed above the EU average in terms of households with broadband Internet
access: with 34% of households having broadband, it beat the EU average by 2 percentage
points.
At the same time 75% of Slovenian companies had a broadband Internet connection, which is
equal to the EU average.
The highest share of individuals using the Internet was reported in Sweden (80%), Denmark
(78%) and the Netherlands (76%), which also lead the EU in terms of households with a
broadband Internet connection.
The lowest share of households having a broadband Internet connection was reported in
Greece (4%), Slovakia (11%) and Cyprus (12%), countries with the lowest percentage of
Internet users.
Slovenia's Economic Situation is Excellent, Expert Says
Respected economist France Krizanic believes that Slovenia's economic growth will remain
for the rest of the decade two to three percentage points above the growth in its main trade
partners in western Europe
Respected economist France Krizanic believes that Slovenia's economic growth will remain
for the rest of the decade two to three percentage points above the growth in its main trade
partners in western Europe.
That is unless Slovenia makes really big mistakes or is witness to a serious conflict between
the social partners - the government, employers and trade unions, he said in an interview for
Sobotna priloga, a supplement of the daily Delo on Saturday, 11 November.
However, Krizanic believes that makers of economic policy heed the wishes of the unions and
employers to such an extent that a conflict is unlikely.
Prime Minister Janez Jansa's claim that key macroeconomic indicators have never been so
good in Slovenia are undoubtedly true if recent history is considered, said Krizanic, who is the
chair of the Economics Institute at the Ljubljana Faculty of Law.
Moreover, Krizanic believes that the euro changeover in Slovenia on 1 January 2007 will be
one of the most professional in any country so far. Unless something unpredictable happens
with the information systems of Slovenia's banks, the switch should be smooth and rapid, he
said.
Krizanic, who recently became one of Jansa's economic advisers, believes that the main shortterm risk for macroeconomic policy is that with strong economic growth, the economy may
overheat and certain costs would start to increase. In this case competitiveness might drop,
Krizanic stressed.
The robust economic growth means Slovenia can also expect to have somewhat higher
inflation, Krizanic explained. However, if the inflation rate is only a few points higher than
that of Slovenia's trade partners', there should be no problems, he added.
Conference: Slovenian Statistical Standards EU Comparable
Top European statisticians have estimated that Slovenian statistical practices are completely
compatible with EU standards
15
Top European statisticians have estimated that Slovenian statistical practices are completely
compatible with EU standards. The assessment was made as the 2006 Statistics Days opened
in the NE town of Radenci of Monday, 6 November, bringing together 200 participants, 23 of
them from abroad.
Addressing the conference, the Chief Statistician of the OECD Enrico Giovannini said that
Slovenia was extremely active in the field of statistical measurements and that its data was
comparable and reliable.
Director General Statistics at the European Central Bank Steven Keuning confirmed this
view, noting that Slovenia already adopted EU-comparable statistical methods when
preparing for the euro changeover. He moreover touched on the responsibilities of national
statistical offices in the eurozone.
Janez Sustersic, the head of the government Institute for Macroeconomic Analysis and
Development (IMAD), meanwhile pointed out that the demand for statistical data in Slovenia
was rapidly growing, especially when it came to measuring the effectiveness of the state.
The meeting, which is to discuss through Wednesday, 8 November the importance of
cooperation between national statistical offices in the EU, was also addressed by Public
Administration Minister Gregor Virant, who highlighted the use of statistical data as a means
of improving public administration.
Virant said that Slovenia was one of the first countries in Europe to systematically tackle
redundant red tape in public administration and managed to "simplify more than 100
administrative procedures this way".
The Director of the National Statistics Office Irena Krizman described statistics-related
cooperation at European and world level as a great opportunity for development.
The conference, themed "Measuring the Development Role and Efficiency of the Public
Sector and Policies", saw participants present their views on the role of the state in
development, the efficiency of the health sector and the Lisbon Strategy among other things.
16
FINANCE
PM: Court Upholds Slovenia's Claims in LB Savers' Case
Slovenia's prime minister believes that the decision of the European Court of Human Rights
to throw out the case of three Croatian savers of the defunct Slovenian bank LB against
Slovenia is confirmation of the country's arguments in the case
Slovenia's prime minister believes that the decision of the European Court of Human Rights
to throw out the case of three Croatian savers of the defunct Slovenian bank LB against
Slovenia is confirmation of the country's arguments in the case.
In a press release on Monday, 6 November, Prime Minister Janez Jansa's office said it was
hopeful "the decision of the court in Strasbourg would contribute to a more speedy resolution
of the issue of LB savers".
The office added it would comment on the decision in more detail after it received the ruling
and had a chance to study it in full.
Slovenia has claimed throughout that the issue of guarantees for foreign currency deposits
dating back to the former Yugoslavia should be resolved as part of negotiations on succession
to the former Yugoslavia, the office wrote.
It added that Slovenia had adopted the territorial principle in line with which it paid out
foreign currency savings of all holders of accounts in banks on the Slovenian territory. "We
expect Croatia to act in the same manner."
Moreover, the press release said Slovenia now expected the issue to return to the negotiating
table as part of succession talks.
The territorial principle of vouching for foreign currency savings has been confirmed by all
successors to the former Yugoslavia bar Croatia. All the successors but Croatia also agreed to
resume stalled talks on the LB debt as part of succession talks.
The office went on to say that it hoped that this issue as well as all others that burden
Slovenian-Croatian relations could be resolved as soon as possible so that the countries could
focus on a common European future.
Court Throws Out Case of Croatian Savers, Slovenia Pleased
The European Court of Human Rights has decided to throw out a case brought by three
Croatian savers of the defunct Slovenian bank LB against Slovenia, a ruling that was greeted
in Slovenia as a landmark in the long-running dispute with Croatia that has burdened
bilateral relations since the break-up of Yugoslavia 15 years ago
The European Court of Human Rights has decided to throw out a case brought by three
Croatian savers of the defunct Slovenian bank LB against Slovenia, a ruling that was greeted
in Slovenia as a landmark in the long-running dispute with Croatia that has burdened bilateral
relations since the break-up of Yugoslavia 15 years ago.
In its ruling published on Monday, 6 November, the court said there was no grounds for
examining the case any longer after two of the claimants had been reimbursed their savings,
while the third was found to have failed to exhaust all legal means in Croatia.
Moreover, the court found no violations of human rights, which is why it was no longer
required "at present to continue the examination of the applications".
The three plaintiffs claimed that their human rights - chiefly the right of the "peaceful
enjoyment of property", as set down in Article 1 of Protocol 1 to the European Convention on
Human Rights - had been violated by Slovenia in not guaranteeing for the deposits.
Slovenia looked to have been handed a setback when the court's chamber ruled unanimously
on 8 April 2004 that the case was admissible despite its arguments that Croatian savers had
not exhausted all legal means at home.
17
However, the latest decision has been welcomed as confirmation of the country's arguments in
the case that the plaintiffs had failed to exhaust all legal means at home and that the LB's debt
to Croatian savers was a succession issue.
Foreign Minister Dimitrij Rupel said that the decision will enable Slovenia and Croatia to
focus on the resolution of other issues, whereas the issue of Croatian account holders will be
resolved in the framework of succession to the former Yugoslavia.
According to him, Croatia should now allow LB to collect its claims in Croatia and use the
money to pay all account holders.
Meanwhile, Slovenia's high representative for succession Miha Pogacnik said that the verdict
might motivate Croatia to turn to the Basel-based Bank for International Settlements (BIS),
which is also envisaged in the agreement that all successors to the former Yugoslavia have
ratified.
Pogacnik voiced the hope that the resolution of this issue would proceed as soon as possible
in Basel. It is time that Slovenia and Croatia start to apply the succession agreement that they
both signed and ratified, he stressed.
Slovenia's State Attorney General Lucijan Bembic pointed out that the court endorsed
Slovenia's arguments. Even though the court did not say whether the savers' human rights had
been violated, it made it clear that Croatian savers can claim their money from property that
LB still has in Croatia, Bembic said.
Slovenia thus stands by the claim that Croatia should have vouched for the foreign currency
deposits of its citizens according to what it calls the "territorial principle". This principle, adds
Slovenia, was used in the cases of all other banks in the former Yugoslavia that went bust
after Yugoslavia's unravelling.
Croatia on the other hand dismissed the suggestion that this was a succession issue and
maintained that the state of Slovenia was responsible for vouching for the bank's debt to
Croatian savers.
The territorial principle of vouching for foreign currency savings has been confirmed by all
successors to the former Yugoslavia bar Croatia. All the successors but Croatia also agreed to
resume stalled talks on the LB debt as part of succession talks.
Whereas the responses to the judgment in Slovenia were upbeat, the lawyer of two of the
three savers, Milivoj Zugic, told STA he would lodge a complaint. "The decision was
procedural - Slovenia did not win and neither did we," he told STA.
Zugic noted that the court had not decided on the merits of the claim, it only used the
opportunity to make a procedural decision. "Slovenia got a time out," he added.
Government Adopts Amended 2008 Budget Bill
The cabinet adopted the amended 2008 budget bill on 6 November, agreeing to the changes
recently adopted by the parliament's finance and monetary policy committee
The cabinet adopted the amended 2008 budget bill on Monday, 6 November, agreeing to the
changes recently adopted by the parliament's finance and monetary policy committee, and
rejecting the changes put forth by the opposition parties.
The changes do not increase budget revenues or expenditures, but do reallocate some of the
money for the budget items of the defence, transport and labour ministries, Finance Minister
Andrej Bajuk told the press after the session.
The 2008 budget projects EUR 8.1bn in revenues and EUR 8.4bn in expenditures. The
reallocations meanwhile amount to EUR 11.88m, Bajuk added.
In line with the changes, the national road infrastructure will get EUR 7.29m more, EUR 3.7m
will go for improvements in retirement homes, while a social assistance centre in the town of
Ruse is to get EUR 836,330.
18
Social transfers to individuals and households will meanwhile be reduced by EUR 3.75m, due
to larger involvement of aid recipients in active employment policy programmes and better
supervision.
The 2008 budget bill also includes a reduction in investment transfers to legal and private
persons by EUR 6.68m.
The government also left the possibility for increasing the value added tax (VAT) rate in
2008, but Bajuk said that "we do not expect to have to implement it".
NKBM Moves to Acquire Asset Management Firm Infond ID 1
Nova Kreditna banka maribor (NKBM), Slovenia's second largest bank, announced it would
be publishing a takeover bid for the Maribor-based asset management firm Infond ID 1
Nova Kreditna banka Maribor (NKBM), Slovenia's second largest bank, announced on
Friday, 10 November it would be publishing a takeover bid for the Maribor-based asset
management firm Infond ID 1.
The move comes after almost 20% of Infond ID 1 changed hands on the Ljubljana Stock
Exchange (LJSE) on 9 November in a deal worth SIT 1.16bn (EUR 4.8m).
Infond ID 1 had SIT 8.3bn (EUR 34.6m) in assets under management at the end of June,
according to the company's semi-annual report.
Central Bank Chief Warns Banks to Watch out for Risks
Mitja Gaspari, the governor of Slovenia's central bank, has issued another warning to banks
to keep an eye on risk in the face of soaring volumes of loans to households
Mitja Gaspari, the governor of Slovenia's central bank, has issued another warning to banks to
keep an eye on risk in the face of soaring volumes of loans to households. "Credit growth
raises the issue of the quality of customers, as excessive optimism today can lead to excessive
pessimism in the future," Gaspari told the Days of Slovenian Bankers on Friday, 10
November.
According to him, economic trends are currently good and projections show that no major
changes are expected in the future. The same goes for banks' profits, which have constantly
increased over the past few years.
However, loans to non-banking customers have been soaring. Growth rates are high, so they
could pose a threat to the banking sector if the banks are lenient in the assessment of the
quality of their customers, Gaspari said.
According to him, the banks will see performance fluctuations in the future, with interest rate
risk and not credit risk posing the biggest threats for them.
Gaspari also advised bank customers to be cautions in taking loans denominated in foreign
currency other than the euro, the fastest growing segment of the banking sector.
This caution follows a series of warnings against the fast-growing volume of loans in Swiss
francs that Gaspari has served over the course of this year.
EU Recommends Slovenia Take Measures to Prevent Price Hikes
The European Commission has commended Slovenia's practical preparations for the
adoption of the euro, however it also issued the recommendation that further measures be
taken to ensure price stability
The European Commission has commended Slovenia's practical preparations for the adoption
of the euro, however it also issued the recommendation that further measures be taken to
ensure price stability.
Slovenia appears to be fairly well prepared for the euro on 1 January but would gain from
adopting further measures to strengthen consumers' confidence that prices will remain stable
19
during the changeover, says the fourth report on the practical preparations for the enlargement
of the eurozone, which was published on Friday, 10 November.
The Commission says Slovenia has made further progress since the last report of June 2006,
notably on the cash changeover: further details on the supply of euros to banks and retailers
before euro day have been satisfactorily provided, while the conversion of cash dispensers has
now been planned in detail.
Credit institutions have also agreed to open 42 branches throughout the country on 1 and 2
January to facilitate the exchange of tolars into euros.
"But the Commission would welcome measures to reassure consumers that the conversion
rate will be respected and the changeover period will not be used to increase prices
abusively," says the report.
Such measures could include fair-pricing agreements between retailers and consumers, for
example a code of conduct signed by representative organisations of both parties.
Amelia Torres, spokeswoman for Economic and Monetary Affairs Commissioner Joaquim
Almunia, said in Brussels that the Commission had no information on such agreements.
The concern of Slovenian consumers about potential price hikes had already been highlighted
in the previous report. The September survey of Eurobarometer shows that about 66% of
Slovenians are worried about unwarranted price increases.
According to the Gallup Poll of September, Slovenians are also the most avid supporters of
the euro in the EU 2004 newcomers. Some 72% are pleased or very pleased with the adoption
of the euro, compared to 55% in the next keenest country, Slovakia.
Ljubljana Stock Exchange
The SBI 20 benchmark index closed the week 33.91 points (0.58%) lower at 5,880.15
The SBI 20 benchmark index closed the week 33.91 points (0.58%) lower at 5,880.15 in a
slow week for the biggest blue chips on the Ljubljana Stock Exchange.
Analysts say that a lack of directional leads caused investors to shy away from the market in
recent days. They believe the action should get livelier as more companies report threequarterly results.
In the absence of brisk trading, it was left up to block trading to ensure that volumes were
respectable. A total of SIT 8.9bn (EUR 37.1m) worth of shares changed hands last week, of
which 53% came in block deals.
Abanka Vipa broker Marko Jovic says that the lacklustre action was most evident in trading
with the two biggest names, pharma company Krka and energy group Petrol.
The busiest share last week was that of beverage group Pivovarna Lasko, which was involved
in a number of block deals as part of which around 7% of Lasko was acquired by investment
firm Center nalozbe. The share lost 0.89% to SIT 8,845 (EUR 36.91).
Regular deals with Krka totalled SIT 490m (EUR 2.04m), while brokers closed another SIT
503m (EUR 2.1m) in block deals in an unusually quiet week for the share, which edged
0.53% higher to SIT 185,886 (EUR 775.69).
Meanwhile, shares of Petrol lost 1.22% to SIT 114,001 (EUR 475.71) on turnover of SIT
382m (EUR 1.6m), of which only 35% was in regular deals.
The SBI TOP index of the six biggest shares closed the week at 1,398.97, a drop of 3.07
points (0.22%) on last week.
After gaining 11% in the last month, shares of airport operator Aerodrom Ljubljana slid over
1% to SIT 11,925 (EUR 49.76) in spite of the unveiling of nine-month results that show the
company to have met its annual profit target.
Investors responded positively to forecast-beating results at food company Zito, sending the
share 4% higher to SIT 39,000 (EUR 162.74).
20
Meanwhile, investor fears over ownership plans at the Istrabenz conglomerate following
reports of a covert management buyout sent the share plunging nearly 2% to SIT 9,111 (EUR
38.01) last week.
Popular investment funds fared no better than the blue chips, dragging the PIX investment
fund index 26.5 points (0.54%) lower to 4,886.18.
The BIO bond index added 0.29 points (0.24%) to 119.64.
Foreign Exchange
Mean exchange rate of the Bank of Slovenia
Euro (EUR) - SIT 239.61 (-0.01)
US dollar (USD) - SIT 186.06 (-1.49)
Swiss franc (CHF) - SIT 150.38 (-0.15)
British pound (GBP) - SIT 356.41 (-1.67)
21
REGIONAL INFORMATION
Osrednjeslovensko Region Remains on Top in Slovenia
The central Osrednjeslovensko statistical region remains the most developed Slovenian
statistical region, as it has accounted for a third of the country's GDP in 2004, according to
the data released by the national Statistical Office
The central Osrednjeslovensko statistical region remains the most developed Slovenian
statistical region, as it has accounted for a third of the country's GDP in 2004, according to the
data released by the national Statistical Office.
The gross domestic product (GDP) of the region, which includes the capital of Ljubljana,
amounted to SIT 2,224.5bn (EUR 9.313bn) in 2004, more than eight regions with the lowest
GDP put together, the data also shows.
The Osrednjeslovensko region and the NE Podravsko region, which includes Slovenia's
second largest city of Maribor, together accounted for 49% of the Slovenian GDP, which
amounted to SIT 6,271.8bn (EUR 26.257bn) in 2004.
Of the twelve statistical regions in the country, the least developed is the northeasternmost
region of Prekmurje, with a GDP per person of EUR 9,072.
This is more than half than the figure for Osrednjeslovensko, which stands at EUR 18,786.
Slovenia's average GDP per person amounted to EUR 13,146 in 2004.
22
BRANCH INFORMATION
BSE Infection in Slovenian Cow Officially Confirmed
The Austrian national laboratory confirmed that a cow from Slovenia which was slaughtered
in Austria's Graz in late October had mad cow disease
The Austrian national laboratory confirmed that a cow from Slovenia which was slaughtered
in Austria's Graz in late October had mad cow disease, the Slovenian Veterinary
Administration (VURS) said in a press released on Monday, 6 November.
The Austrian authorities already notified VURS of the infection with bovine spongiform
encephalopathy (BSE) on Saturday, 11 November, immediately after the first tests.
VURS also received the official lab results, which finally confirmed the infection, the press
release further reads.
The cow was born on 23 January 2000 at a farm south-east of Maribor (NE), in the area
supervised by the Murska Sobota veterinary authority.
The farm in question, which holds 54 heads of cattle and specialises in dairy farming, was
visited by a VURS vet on Sunday, 12 November.
After closing the farm and determining the cow's family ties, it was established that four other
animals will have to be culled.
This is the seventh confirmed BSE case in Slovenia. The cow is the sixth one born in Slovenia
to have been found to have the disease.
Panel: Telecommunications Market Needs Efficient Regulation
The main challenge in the telecommunications sector is to provide for efficient regulation in a
bid to guarantee competition and subsequently greater investment and innovation in the field
The main challenge in the telecommunications sector is to provide for efficient regulation in a
bid to guarantee competition and subsequently greater investment and innovation in the field,
participants of a panel have said.
Independent telecommunications consultant Miran Kramberger pointed to the importance of
the telecommunications sector for the global economy at a panel held on Tuesday, 7
November as part of the 7th international telecommunications conference in the coastal town
of Portoroz.
If a country wants to develop the telecommunications market it has to promote
competitiveness in the sector, thereby boosting investments and innovation, Kramberger
added.
Heinrich Otruba, a telecommunications expert working for the European Commission, said
that regulation of the telecommunications market was more efficient in countries where the
state had sold its share in telecommunication companies.
Vladimir Makuc of Amis, a small Slovenian telecommunications company, said that in
Slovenia, regulation was still not effective enough. He believes there is no real competition in
the fixed line market.
Despite initial expectations that a few big operators would control the global
telecommunications market, it has become clear that regional and state operators play an
important role in some countries, Kramberger presented his view of globalisation in the
telecommunications sector.
Although allowing for further consolidation in the sector, Makuc stressed that there were
differences among customers in different countries, which made local operators best at
understanding the habits of the consumers.
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Slovenia's New Tourist Slogan: I Feel Slovenia
"I Feel Slovenia" (with "love" bold) is the new tourist slogan that a special government
commission has selected for Slovenia along with a new logo that combines Mount Triglav,
linden leaf and heart
"I Feel Slovenia" (with "love" bold) is the new tourist slogan that a special government
commission has selected for Slovenia along with a new logo that combines Mount Triglav,
linden leaf and heart.
The slogan is the work of the agency Nuit, which got the idea from the Donna Summer song
"I Feel love".
Slovenia has thus been highlighted as the only country in the world with the word love in its
name, Gregor Krajc, the head of the Government PR and Media Office, told the press on
Friday, 10 November.
The slogan, the work of the design studio Luks, is 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.
According to Krajc, most of the proposed logos featured Mount Triglav and the linden leaf in
some form.
Boris Balant of the studio Luks said that Triglav and the linden leaf have been the most
enduring symbols of Slovenian culture throughout history.
"We added the heart as a symbol of love to say that we are entering a period of kindness and
cooperation," he said.
At the request of the European Commission, the slogan has also been designed in various
other colour combination.
The commission in charge of the slogan, which chose among 250 proposals, featured four
cabinet members, a designed, an ethnographer and two businessmen.
When the public call for bids for the slogan was published in July, designers cried foul,
claiming that the competition was amateurish and arbitrary.
Fundacija Brumen, an association of graphic designers, was especially bothered by the fact
that the slogan and logo were being selected separately.
They also claimed that the prize money (SIT 700,000/EUR 2,921) was insufficient to attract
top designers.
Slovenia's previous tourist logo was a set of flowers, but even that was replaced with the
Slovenian flag in a spot that was aired on CNN.
Conference: Renewable Energy for a More Competitive EU
Renewable energy sources have the potential of making Europe less dependent on energy
imports, curb energy prices and provide development opportunities for rural areas, the
speakers at an international conference agreed
Renewable energy sources have the potential of making Europe less dependent on energy
imports, curb energy prices and provide development opportunities for rural areas, the
speakers at an international conference agreed in Ljubljana on Friday, 10 November.
As one of the keynote speakers at the two day event, which is to see participants highlighting
development prospects for Slovenia and SE Europe in terms of renewable energy sources,
Economy Minister Andrej Vizjak stressed the extreme importance of energy in economic
competitiveness.
Vizjak pointed to the fact that at present the EU covers more than 50% of its energy needs
through imports, with Slovenia exceeding the union's average with 53%.
According to him, Europe still has plenty of development potential. Its sustainable strategies
must however also incorporate public-private partnerships and contributions from all circles
of the society.
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Also highlighting the importance of cooperation on all levels was European Science and
Research Commissioner Janez Potocnik who moreover invited countries, which are not EU
members, to also get involved in energy-related research projects.
He furthermore noted that current energy sources have substantial impact on the environment
and do not present a longterm solution.
Environment Minister Janez Podobnik meanwhile pointed to the positive effects of biofuels
on the environment, whereas State Secretary at the Agriculture Ministry Gvido Mravljak
spoke about the positive impact that the introduction of biofuels and biomass has on rural
areas and the sector of agriculture.
His view was echoed by Institute for European Affairs (INEA) chairman Juergen Gramke,
who believes that bioenergy is the right way toward making population in rural areas less
dependent on subsidies.
Gramke also explained that a new INEA institute for SE Europe was launched in November
in Ljubljana. The institute is tasked with observing the political and economic development of
the countries in the region.
The conference entitled "Development Prospects for Central and SE Europe: Renewable
Energy Sources" sees the participation of 90 experts from 17 countries. It is sponsored by
Prime Minister Janez Jansa and organised by INEA and the Agriculture Ministry.
25
COMPANIES
Slovenian, Montenegrin Postal Companies Forge Closer Ties
The national postal companies of Slovenia and Montenegro have signed a memorandum of
understanding, which is seen as a basis for long-term strategic cooperation that could see
Posta Slovenije participate in the privatisation of Posta Crne Gore
The national postal companies of Slovenia and Montenegro have signed a memorandum of
understanding, which is seen as a basis for long-term strategic cooperation that could see
Posta Slovenije participate in the privatisation of Posta Crne Gore.
Ales Hauc, the general manager of state-owned Posta Slovenije, told the press after the
signing on Thursday, 9 November that his company's goal was by no means to mount a
hostile takeover of any postal company in the former Yugoslavia.
However, if the stakeholders in Montenegro show interest in long-term partnership, Posta
Slovenije might file a bid in an international tender, he said.
"It all depends on the privatisation intentions of the Montenegrin government. When the call
for bids is issued, we will see based on our cooperation whether we will be interested in
taking part," Hauc said.
According to him, Posta Slovenije is also interested in cooperating with other postal operators
in the former Yugoslavia. He said efforts would be made to strengthen ties with the
Macedonian post.
Vojko Grdinic, the chairman of Posta Crne Gore, meanwhile said that the memorandum of
understanding was just a higher form of cooperation between the two companies.
"This is not the start of privatisation, as this is a complex process which our government will
determine and which will certainly be carried out through an international tender," he said.
Grdinic said his personal view was that such cooperation can speed up their privatisation
efforts, and it does give those who are already cooperating with the company a certain
advantage.
The Slovenian postal company has recently signed a similar agreement with the Croatian
postal operator Hrvatska posta. At that time Hauc did not rule out the possibility of future
capital tie-ups between the two companies.
Posta Slovenije posted a profit of SIT 4.8bn (EUR 19.95m) in the first half of 2006, up 54%
year-on-year. Sales rose 13% to SIT 27.5bn (EUR 114.32m) in the same period.
The Posta Slovenije management has been pushing to have the company privatised even
though it is not on the government's list of property for sale.
Hauc has said he is in favour of a step-by-step privatisation of up to 49% of the company, in
which a strategic partner would acquire 24% in the first two years through a capital injection.
Ljubljana Airport Posts Increase in Traffic, Revenues
The Ljubljana international airport saw a 6% annual rise in traffic in the first nine months of
the year
The Ljubljana international airport saw a 6% annual rise in traffic in the first nine months of
the year. This pushed operating revenues up 9% to SIT 5.23bn (EUR 21.8m), and net profit
up 17% to SIT 1.82bn (EUR 7.6m), according to the company operating the airport.
A press release from Aerodrom Ljubljana on Monday, 6 November says passenger numbers
were up 10% to 1,051,433, while freight transport increased by 23% to 10,035 tonnes.
Slovenia's flag carrier Adria Airways posted a 9% increase in traffic. The company's
passenger numbers were up 13% to 749,482. The figure represents some 75% in the total
number of passengers at Brnik airport.
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The Slovenian airline operated 92% of its flights on regular routes, carrying 83% of its
passengers. Charter flights accounted for 8% of the overall traffic operated by the airline and
for 17% of its passengers.
Budget carrier Easyjet carried 68,171 passengers on its flights between Brnik and London,
which is down 3% over the first nine months of last year.
The press release says further that Aerodrom Ljubljana increased its revenues on the domestic
market by 9% to 73%. Revenues generated abroad increased by 17%. Airport services
accounted for 51% of operating revenues.
Financial revenues amounted to SIT 360m (EUR 1.5m or 90% of the annual target), a decline
of 10% that the company puts down to its intensive investment activity and low returns made
on capital markets.
In the first nine months of the year, the company invested SIT 1.42bn (EUR 5.9m) of its own
funds in the construction of infrastructure and commercial facilities and the purchase of
equipment.
The most important investment is the construction of the first phase of a new passenger
terminal in a bid to allow for the Schengen regime division of traffic. Separate entries for
Schengen-bound and other traffic should be in place by 30 June 2007.
Holding Istrabenz Wants to Consolidate by 2011
The food, energy and tourism holding Istrabenz has adopted a strategic plan for the 20072011 period which stresses as a priority a consolidation of the tourism and food divisions
The food, energy and tourism holding Istrabenz has adopted a strategic plan for the 20072011 period which stresses as a priority a consolidation of the tourism and food divisions.
Although new investments in tourism are not excluded either, money will be channelled
primarily in the energy division, CEO Igor Bavcar told the press in Koper on Monday, 6
November.
Janko Kosmina, the chair of the supervisory board of the Koper-based holding, pointed to the
food division as the one where the company's goals were not met in the past four years.
As a consequence, Istrabenz's food products portfolio will be reduced in order to focus on the
most popular brands.
Bavcar added that despite the absence of desired results, Istrabenz is not mulling the sale of its
tourism division and the Droga Kolinska food company.
According to him, the company's priority will be investment in energy, mainly in BosniaHerzegovina's energy infrastructure.
Under the plan, the company projects an average 5% annual growth of assets, a 10% average
annual growth of dividends and an increase of its debt-to-assets ratio to 60%. The ratio was
below 50% so far, Bavcar added.
The company will make some investments in tourism as well, most notably in Marina Koper,
Bavcar explained.
The holding's CEO moreover expects the company to consolidate its ownership by 2011, and
believes that the state-run KAD and SOD funds will by then sell their stakes in Istrabenz.
The four-year strategic plan was approved by the supervisory board on 27 October. The
supervisors also agreed to reduce the company's management board from four to two
members, effective as of May 2007, when the management's term runs out.
Railroads to Get Nearly EUR 9bn in Investments by 2020
Slovenia plans to allocate EUR 8.89bn for modernising its railroad network between 2008
and 2020 in what will be the most expensive of the projects in the 2007-2023 resolution of
national development programmes
27
Slovenia plans to allocate EUR 8.89bn for modernising its railroad network between 2008 and
2020 in what will be the most expensive of the projects in the 2007-2023 resolution of
national development programmes, Transport Minister Janez Bozic has said.
The amount moreover presents over two thirds of the EUR 12.2bn that Slovenia intends to
invest in the four transport projects in the resolution, Bozic told the press in Ljubljana on
Tuesday, 7 November.
Out of the EUR 8.89bn, EUR 4.27bn will be provided through public-private partnerships,
with the same amount coming from the state budget and EUR 350m from EU funds, he
added.
The majority of the total sum will go for the transport infrastructure on the fifth transEuropean transport corridor (EUR 7.41bn) and the remaining EUR 1.48bn for projects on the
tenth corridor.
The investment in railroad infrastructure is designed mainly to increase the allowed maximum
weight of trains and increase the speeds on the main routes to 160 kilometres an hour.
The money will also go for electrification of the Pragersko-Hodos route (NE) and the building
of a dual-rail tracks along both corridors, Bozic explained.
The maximum speeds will be increased to 160 kilometres per hour on the link between Koper
and the transport hub of Divaca and the Italian seaport of Trieste and Divaca, he added.
Also upgraded will be the links between Ljubljana and the transport hub of Zidani most (E)
and between Zidani most and the hub of Pragersko (NE) as well as between Zidani most and
the Dobova (SE) rail border crossing with Croatia.
Koper Port Gets Radiation Sensors
The equipment was donated to the Slovenian Customs Administration by the US and is meant
to increase security in the world
The entrance and exit to Slovenia's sole seaport of Koper have been equipped with radiation
sensors, allowing vehicles to be scanned for radioactive materials. The equipment was
donated to the Slovenian Customs Administration by the US and was unveiled on Tuesday, 7
November.
The equipment is meant to increase security in the world, US Ambassador to Slovenia
Thomas B. Robertson told the press in Koper.
The sensors in the port of Koper will enable Slovenian customs officials and security bodies
to detect and prevent smuggling of radioactive materials.
The equipment also detects materials, which radiate a non-harmful dose of radiation, mainly
ceramic tiles, granite slabs and iron ore.
Tracy P. Mustin of the US Department of Energy meanwhile pointed out that it is extremely
important to prevent radioactive materials ending in the hands of terrorist, after the attacks in
London, Madrid and New York.
Franc Kosir, director general of Slovenia's Customs Administration, said that the investment
in Koper was worth SIT 70m (EUR 293,000).
The same detectors will also be installed on the Obrezje border crossing between Slovenia
and Croatia, with the SIT 71m (EUR 297,000) equipment to become operational in
December, Kosir added.
The US also paid for training the personnel, who operate the devices.
Doors Opened to the Establishment of New Chambers of Commerce
Groups of companies will be able to form new chambers of commerce in accordance with the
changes to the articles of association of the Chamber of Commerce and Industry (CCIS)
which were confirmed by the CCIS management board
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Groups of companies will be able to form new chambers of commerce in accordance with the
changes to the articles of association of the Chamber of Commerce and Industry (CCIS)
which were confirmed by the CCIS management board on Tuesday, 7 November.
The new articles of association are in accordance with the new act on chambers of commerce
which ends mandatory membership of the CCIS. The path to new chambers will be open after
the expiry of one year following the entry into force of the new articles of association.
After one year, the CCIS will be transformed into a chamber comprising associations and
local chambers that will be either economically independent or even independent legal
persons, the CCIS said in a press release.
The board also set the conditions for companies that want to leave the reformed CCIS. Until
2008 companies are free to leave at any point. After 2008, they will have to submit a written
request by October, whereupon they are free to leave on 1 January next year.
Moreover, CCIS president Jozko Cuk was urged to resign from his post. The management
board "suggested that he resign...and that the proposal be put to the CCIS assembly," which
will be in session on 22 November, the press release adds.
Viator & Vektor Managers Embark on MBO
Two small companies affiliated with the chairman of logistics group Viator & Vektor have
announced they would publish a takeover bid for the group
Two small companies affiliated with the chairman of logistics group Viator & Vektor have
announced they would publish a takeover bid for the group, in what is yet another in a series
of management buyouts in the ranks of Slovenia's largest companies.
The companies Vektor and Petin, which have been co-founded by Viator & Vektor chief
executive Zdenko Pavcek, are offering SIT 35,000 (EUR 146.05) per share in a tentative offer
published on Wednesday, 8 November, which values the company at about SIT 6.7bn (EUR
28.2m).
According to media report, the current price on the grey market (the company is not listed) is
about SIT 23,000 (EUR 96) per share. Whereas Petin holds 20% of Viator & Vektor, Vektor
owns no shares as yet.
According to the business daily Finance, the takeover bid is being orchestrated by Pavcek,
who has been joined by 44 managers at the group. The company confirmed in late October
that an MBO was being mulled.
Finance has said that the group would have to secure at least 10 million euros if it is to make
the 75% threshold that it is expected to set.
In addition to Petin, the biggest shareholders of Viator & Vektor include asset management
firms Infond Holding (24.8%), Zlata Moneta 2 (19.6%) and Proholding (13%).
The group posted sales of SIT 44.6bn (EUR 186.1m) last year and an operating profit of SIT
1bn (EUR 4.2m).
Gorenje Supervisors Endorse Capital Injection Proposal
The supervisory board of home appliance maker Gorenje has endorsed the management's
proposal for a capital injection, calling for the company's share capital to be increased by
50% in the next five years
The supervisory board of home appliance maker Gorenje has endorsed the management's
proposal for a capital injection, calling for the company's share capital to be increased by 50%
in the next five years.
The supervisors, meeting on Wednesday, 8 November in Velenje, where the company is
based, shared the management's view that the planned 50% increase in business operations by
2010 calls for a corresponding growth of the share capital.
The plans will have to be confirmed at a shareholders meeting, scheduled for 12 December.
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Gorenje CEO Franjo Bobinac said in mid-September that the company planned to reach EUR
1.5bn in revenues by 2010 and become one of the five largest producers of household
appliances in Europe. The company employs some 8,000 workers in Slovenia and additional
2,000 abroad.
Casino Operator Hit on Track for a Successful Year
Slovenian casino operator Hit plans a profit of SIT 3.5bn (EUR 14.6m) this year, one billion
tolars (EUR 4.2m) more if the favourable trends continue
Slovenian casino operator Hit plans a profit of SIT 3.5bn (EUR 14.6m) this year, one billion
tolars (EUR 4.2m) more if the favourable trends continue. The reason why profit will be half
that of last year is the huge investment cycle, Hit chairman Niko Trost told the weekly
Demokracija.
According to Trost, the Park casino at Nova Gorica is operating at half capacity, while
business is also hindered at nearby Perla, where the construction of a new hotel is nearing
completion.
Another big project is the casino and entertainment centre at Sentilj on the border with
Austria, whose construction will however be slowed down due to high financial risks.
Trost said EUR 40m would be spent on the project in the initial phase instead of the initially
planned EUR 75m.
Hit is also engaged in joint venture talks with US casino giant Harrah's Entertainment on the
construction of a mega casino and entertainment centre in the Nova Gorica region.
The two partners presented an analysis of the project to the government, as they expect lower
gaming tax and a relaxation of restrictions on casino ownership.
The partners expected legislation that would allow at least 50:50 ownership, said Trost, but he
was quick to point out that Hit must have the "dominant capital and management influence" in
the new company.
According to Trost, Hit's strategy is to remain the leading player in gaming and entertainment
in the region.
The company already has ventures in Bosnia-Herzegovina, Montenegro and Macedonia; it
sees new challenges in Belgrade and it is being invited to Albania, Romania, Bulgaria and
Slovakia, Trost said.
Zito Beats Profit Targets in January-September Period
Bread and pastry maker Zito posted a profit of SIT 788.3m (EUR 3.3m) in the first nine
months of 2006
Bread and pastry maker Zito posted a profit of SIT 788.3m (EUR 3.3m) in the first nine
months of 2006, 2% above plans and SIT 742.7m (EUR 3.1m) over the same period last year,
the company said on Thursday, 9 November.
In the January-September period, the Ljubljana-based Zito generated sales revenues to the
tune of SIT 19.8bn (EUR 82.68m), down 1% on the same period last year.
The largest share of the sales were generated by bakery, confectionery and milling
programmes, which represent a total of 82% of the group's revenues.
While the sales of milling products and frozen food increased, the sales of bakery products
remained level and the sales of confectionery fell, Zito added.
The group's sales in Slovenia remained on the same level in the first nine months of 2006 in
comparison to last year, while exports increased.
The only fall in Zito's exports was recorded in Croatia, yet the group remains upbeat about
sales in SE Europe until the end of the year.
30
EBRD Confirms Interest in Gorenje Capital Injection
The European Bank for Reconstruction and Development (EBRD) has expressed an interest
in taking part in the planned capital injection at home appliance group Gorenje
The European Bank for Reconstruction and Development (EBRD) has expressed an interest
in taking part in the planned capital injection at home appliance group Gorenje.
The head of the EBRD office in Slovenia Francois Lecavalier told STA on Thursday, 9
November that the bank backed Gorenje's plans for a capital supply of 50% in the next five
years. He added that the EBRD was interested in taking part in the project.
According to Lecavalier, talks with Gorenje are ongoing, but no deadline has been set for
their closure.
Meanwhile, Gorenje spokesperson Ursula Menih Dokl confirmed for STA that the
management was considering taking part in the second phase of the planned capital supply.
Lecavalier said he expected Gorenje to consolidate its standing as the leader in the region and
open new opportunities for growth with the fresh capital.
Business daily Finance wrote on Thursday, 9 November that the two-stage supply of fresh
capital would likely comprise of a 15% first phase and 35% second phase.
In the second stage, Gorenje employees are expected to be invited to take part, Finance wrote,
adding that they are expected to get a discount price for the shares. The claim about the
discount was denied by Gorenje chairman Franjo Bobinac in a press release on Thursday, 9
November.
Moreover, the paper quotes unofficial sources in adding that the capital injection may also
constitute an exchange of shares with a possible acquisition target or a public offering on a
foreign stock exchange.
The plans for the capital injection have already been approved by the company's supervisory
board. The supervisors shared on Wednesday, 8 November the management's view that the
planned 50% increase in business operations by 2010 calls for a corresponding growth of the
share capital.
The plans will have to be confirmed at a shareholders meeting, scheduled for 12 December.
Bobinac said in mid-September that the company planned to reach EUR 1.5bn in revenues by
2010 and become one of the five largest producers of household appliances in Europe. The
company employs some 8,000 workers in Slovenia and 2,000 abroad.
Gorenje to Increase Share Capital
The management of Gorenje has proposed the share capital of the home appliance group be
increased by 50% or by up to SIT 6.1bn (EUR 25.51m)
The management of Gorenje has proposed the share capital of the home appliance group be
increased by 50% or by up to SIT 6.1bn (EUR 25.51m). This follows from a convocation of a
shareholders' meeting on Friday, 10 November due on 12 December at the company's
headquarters in Velenje.
Under the proposal, the company is to issue 6,100,000 new no-par value shares, which could
also be bought by the employees of Gorenje and associated companies.
The management, with the consent of the supervisory board, has the option to fully or
partially cancel out pre-emptive right of existing shareholders to the new shares.
The shareholders' rights and the conditions regarding the new issue will be determined by the
management, which needs the supervisors' stamp of approval.
The shareholders' meeting is meanwhile expected to authorise the supervisory board to revise
the company's statutes to align them to the new facts arising from the capital expansion.
The management and the supervisory board propose the shareholders' meeting endorse the
proposal on the introduction of no-par value shares. This means that the share capital of SIT
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12.2bn (EUR 51.02), which is divided among 12,200,000 ordinary registered shares, would be
replaced by no-par value shares.
On Thursday, 9 November, the European Bank for Reconstruction and Development (EBRD)
expressed an interest in taking part in the planned capital injection. The head of the EBRD
office in Slovenia Francois Lecavalier told STA the bank was in talks with Gorenje.
Meanwhile, Gorenje spokesperson Ursula Menih Dokl confirmed for STA that the
management was considering taking part in the second phase of the planned capital supply.
Bobinac said in mid-September that the company planned to reach EUR 1.5bn in revenues by
2010 and become one of the five largest producers of household appliances in Europe. The
company employs some 8,000 workers in Slovenia and 2,000 abroad.
Vizjak Says Price Not Only Factor in Privatisation
According to him, the state must act responsibly in handling its investment portfolio
Economy Minister Andrej Vizjak is convinced that price cannot be the only factor considered
by the state in deciding to whom to sell its shares in companies. According to him, the state
must act responsibly in handling its investment portfolio.
Speaking at a round table held as part of the meeting of financial experts in the coastal town
of Portoroz on Friday, 10 November, Vizjak said that selling state shares at the highest price
should not be the only goal for the government.
He said that a variety of factors all had to be considered in ensuring that the state was acting
in a responsible manner in withdrawing from the economy. He also reiterated that the
government was determined to carry out the privatisation.
Vizjak pointed to the privatisation of telco Telekom Slovenije, which was launched with the
placement of the company's shares on the Ljubljana Stock Exchange (LJSE). With this the
state is searching for a partner and not a controlling company, he said.
His comments came at a round table on the withdrawal of the state from the economy, the
final act at the meeting staged by the LJSE and business daily Finance.
At the same event, economist Joze P. Damijan praised the progress made in privatising
Telekom. According to him, listing the company was the right move.
Damijan, who had a short stint as the reforms minister in the current government but quit after
reportedly disagreeing with other ministers over privatisation plans, said the sale of state
stakes in the Slovenian Steel Group and power producers were also steps in the right
direction.
Meanwhile, Vizjak announced that offers had come in for the steel group from abroad after
the state published recently the call to bids. He would not go into details, however, as the
deadline for bids has still not passed.
However, Damijan believes that the government has been too slow in privatising financial
companies. In response, Vizjak said that he was confident Zavarovalnica Triglav, Slovenia's
largest insurer, would be listed on the LJSE in the next year or two.
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FAIRS, CONGRESSES
Ljubljana Furniture Fair Opens Its Doors
At the opening event awards were conferred on the best of the 297 exhibitors from 23
countries
The 17th Ljubljana furniture fair, entitled "Revolution? Judge by Yourself", opened at the
Ljubljana fairgrounds on Monday, 6 November. At the opening event awards were conferred
on the best of the 297 exhibitors from 23 countries.
For the first time the Top Ten awards were bestowed on domestic manufacturers of furniture
and other interior equipment.
Furniture industry is an important part of Slovenia's economy, Economy Ministry State
Secretary Andrijana Starina Kosem said at the opening, adding that this is also demonstrated
by the tradition, development and modernisation of the Ljubljana furniture fair.
The fair closed on Sunday, 12 November, 12 November.
33
SLOVENIA IN BRIEF
Slovenia Improves Its CPI Corruption Index Position
The latest survey on public sector corruption puts Slovenia 28th on the Corruption
Perceptions Index (CPI), up three spots over 2005. The index, published by NGO
Transparency International, ranks Slovenia together with Malta and Uruguay. Slovenia scored
6.4 points, compared to 6.1 points it was given last year. Finland, Iceland and New Zealand
top the scale of 163 countries, all scoring 9.6, while Haiti trails the list with 1.8 points. The
survey pointed to a strong correlation between corruption and poverty. The Corruption
Perceptions Index is a composite index that draws on multiple expert opinion surveys that poll
perceptions of public sector corruption in countries. It scores countries on a scale from ten to
zero, the latter indicating a high level of corruption in a country.
Slovenian Students Win Grand Prize in Synthetic Biology
A team of students from the University of Ljubljana won the Grand Prize at the international
competition Genetically Engineered Machine, which was held at the Massachusetts Institute
of Technology (MIT), the National Institute of Chemistry said on Tuesday, 7 November.
Government Appoints Ster New State Secretary at Foreign Ministry
The government appointed on Thursday, 9 November Andrej Ster the new state secretary at
the Foreign Ministry. Ster, who replaces Bozo Cerar, had been serving as the head of the
directorate for international law at the ministry. The government moved to replace Cerar after
he was appointed Slovenia's new ambassador to NATO in October, the Government PR and
Media Office said after the cabinet session.
Drnovsek and Mesic Meet in Zagreb
Slovenian President Janez Drnovsek met his Croatian counterpart Stipe Mesic in Zagreb on
Thursday, 9 November.
Theatre, Radio, Film and TV Academy Celebrating 60 Years
The Academy of Theatre, Radio, Film and Television (AGRFT) is celebrating its 60th
anniversary this year. The beginnings of the academy, from which 531 students have
graduated so far, go back to 1945, when an academy for performing arts was created by a
decree of the then government.
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