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Books on Slovenia
REPUBLICAN REFERENCE
Area (sq.km)
20,273
Population
2,011,473
Capital
Ljubljana
Currency
Tolar
President
Janez Drnovsek
Private sector
% of GDP
40%
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Update No: 099 - (26/07/05)
High hopes for Slovenia dashed?
Slovenian Prime Minister Janez Jansa held talks with Luxembourgish Prime
Minister Jean Claude Juncker on June 8th, According to Jansa, Slovenia is
confident that it would get twice the amount of money in the next European Union
budget as it is currently receiving. The government and the EU affairs committee
also endorsed this standpoint. All this was before the full effects of the
bombshell of the French and Dutch No votes on the EU constitution were felt. All
bets are now off on the 2000-2013 EU budget.
Slovenian officials were quite optimistic about the outcome of the final phase
of negotiations on the budget all the same. The presidency, now in British
hands, will shortly reveal a final proposal; and Jansa expects it will be no
worse than the one that is on the table now, but "unfortunately, it cannot
be expected that it will come close to the European Commission's proposal,"
which Slovenia also accepted.
According to Janasa, the Commission's proposal is better than the compromise
proposals of the Luxembourg presidency as the latter failed to take into full
account the EU commitments regarding the Lisbon Strategy, rural development and
cohesion. He added that the conditions in the EU would not change in way to
become more favourable to the Commission's proposal.
Slovenia said earlier that it hoped to see an agreement on the financial
perspective shortly. It is a crucial time for Slovenia as it has to secure hefty
funding from structural and cohesion funds, otherwise the statistical effect of
subsequent rounds of enlargement will artificially push its GDP higher as
compared to the EU average (this serves as a basis for eligibility
calculations), and certainly curb the takings. If this occurs then Slovenia
would have to go through what would be tough and lengthy negotiations on the
division of the country into statistical regions.
Slovenia aims to exceed EU's GDP average by 2015
The development strategy recently adopted by the Slovenian government is, if
successful, going to make life more difficult here for future Slovene
negotiators. For it aims that Slovenia should exceed the EU's per capita GP by
2015, obviously thereby restricting its eligibility for handouts from Brussels.
The strategy is based on ensuring prosperity to all citizens which sets four
fundamental goals, the Slovene press agency reported. One such goal is economic,
another is to improve the quality of life and the welfare of Slovenian citizens.
The primary goals of the document are sustainable development and the bolstering
of Slovenia's global standing.
In order to surpass the average gross domestic product (GDP) in the EU in 10
years, Slovenia's economy will have to grow by 3 percentage points faster than
the EU. As predicted, 2 per cent growth in the EU15, the Slovenian economy has
to expand at 5 per cent, Slovenian Prime Minister Janez Jansa told the agency.
The work on the blueprint for the strategy was launched by the previous
government. The final copy of the document was drafted by the Institute for
Macroeconomic Development and Analysis (IMAD) and went through an extensive
debate in the government.
Jansa said the document stressed more on sustainable development and is based on
the estimate that Slovenia is at a crossroads where it will have to find a new
development impetus. He is convinced that Slovenian economy's goal to increase
at 5 per cent is ambitious but attainable provided that development-oriented
measures are made. The government is now expected to propose the creation of a
task force to prepare the basis for long-term reforms. According to Jansa, the
government would now negotiate the standpoints on the social agreement on the
strategy. Jansa said the government will maintain that the social agreement
incorporates the goals of the development strategy.
A detailed programme of measures and financial estimates that will accompany the
strategy is scheduled to be adopted by the cabinet by September. The strategy
will also serve as the basis for Slovenia's action plan for the implementation
of the Lisbon Strategy, Jansa said.
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AUTOMOBILES
Protej bids for majority stake in Autocommerce
Protej, the biggest shareholder of Autocommerce, published a public bid to
acquire all of the shares in the car, tourism, IT and finance group Autocommerce,
in which it already owns a 24.99 per cent stake, Slovene Press Agency reported
recently.
However, the company did not disclose the threshold of shares to be purchased in
order to consider its bid successful. Protej is offering 6,100 tolars (25.4
Euro) per share in the bid, which ran out on July 21. Protej would have to pay a
total of over 13 billion tolars (54.2m Euro) if it succeeds in acquiring all
Autocommerce shares that are not floated on the official market. The bid is
considered to be a management buyout, since Protej is owned by Branko Sibanovski,
the director of Autocommerce's brokerage AC BPH, and 26 other top officials at
Autocommere.
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BANKING
NLB enters Russian market, targets bigger business
Slovenia's largest bank, Nova Ljubljanska banka (NLB), recently signed an
agreement for the acquisition of 7.69 per cent of the Moscow-based Promsvyazbank.
This is a portfolio investment confirming existing cooperation and strengthening
future collaboration, NLB said in a statement, New Europe reported.
According to the Slovenian bank, Russia is a growing market and the agreement
would further expand business there. NLB had a successful representation in the
Russian market which is also one of the strategic development markets. Next step
for NLB is to increase its shares in Promsvyazbank to a controlling stake.
Meanwhile, the Kommersant reported that it found out NLB's stake might increase
between 10 per cent and 15 per cent by this September through an option.
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ENERGY
Cabinet OKs construction of Sava hydro plant
The Slovenian cabinet announced at a recent meeting that it had opened doors for
the construction of the third of five hydroelectric power plants on the lower
Sava River. The government affirmed a zoning plan for the Blanca hydro plant,
which is currently the biggest electricity project in the country and also
passed financial and infrastructure programmes for the project.
The zoning plan includes detailed blueprints related to the energy, transport
and municipal details of the project, as well as environmental protection
measures. According to government estimates, the costs of the construction of
Blanca stood at 29m Euro, Environment Ministry State Secretary, Marko Starman,
said, the Slovene Press Agency reported.
Besides confirming the plans for the Blanca plant, the government also invited
state-owned power producer HSE, which is in charge of the lower Sava project to
present the long-term financial plan for the whole project.
The cabinet also called on the economics and environment ministries to come up
with a financial plan for accompanying infrastructure that is to be built as
part of the lower Sava hydro project.
According to Starman, this is necessary in order to secure funds in future
budgets so that one can have a clear scenario about the financing of the
investment plans.
Slovenian media reported earlier that there was a wave of disagreement between
the finance, environment and economics ministries regarding the financing of the
project.
The finance ministry pondered over the idea of giving the project to a foreign
investor instead of HSE and was also averse to approving a loan the HSE had
secured from the European Investment Bank for the project. On the other hand,
the HSE said this decision allowed the company to launch operations related to
the construction of the Blanca Plant.
According to HSE's Bogdan Barbic, the approval of the zoning plan allowed the
company to begin purchasing equipment needed to build the plant. But he assured
that there are no obstacles to launching works on the Blanca plant, adding that
the HSE had already purchased the necessary land. Meanwhile, Sevnica Mayor,
Kristijan Janc, where the plant is to be located, said he was only partly happy
with the steps taken by the government. He called for stronger communication
between the ministries involved in the project as any disagreements in future
would only delay the construction of the plants.
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FOREIGN LOANS
Nova Ljubljanska banka takes out 540m Euro loan
Slovenia's leading bank, Nova Ljubljanska banka (NLB), signed a contract on a
540m Euro loan with a consortium of 13 international banks in London on June
3rd, according to Slovene Press Agency.
NLB would utilise the loan to fund Slovenian companies in a bid to offer them
more diverse financial services under competitive terms, the bank said in a
statement. It added this is the biggest international loan ever taken out by a
Slovenian bank. The bank stated that the deal was agreed on very favourable
terms. The interest rate for the loan, due in five years, is Euribor +0.17%
annually, which are the best terms NLB ever negotiated for such a loan on the
international capital market. The credit was organised by Bayerische Landesbank,
Commerzbank Austria Creditanstalt, Bank of Tokyo-Mitsubishi, calyon, DZ Bank,
HSH Nordbank, ING Bank NV, KBC Bank NV, Mizuho Bank, Lloyds Bank TSB, Raiffeisen
Zentralbank Oesterreich and WestLB.
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MINERALS & METALS
Metal Ravne eyes bigger output
Metal Ravne, a subsidiary of Slovenia's Steel Group, is planning to invest in
production due to its strong operations in recent times, New Europe reported
recently.
This year five million Euro are earmarked for modernisation plans and the rest
of the profit is reserved for next year, when the company plans to build a new
rolling facility that would boost production.
According to Tibor Simonka, chairman of Steel Group, the time has come for the
group to start investing extensively in order to upgrade and modernise its
production facilities. He added that the company was unable to invest during the
period of restructuring, but now the strong operations have encouraged
investment that would lay the foundations for future operations. In the first
quarter of this year, the company made a net profit of 1.15bn tolars (4.8m
Euro), which indicated that it has already exceeded its business plan for the
whole of the year, company officials told the Slovene press agency.
Last year Metal produced 40,000 tonnes of steel, exceeding production plans for
the quarter and the output in the same quarter of last year. According to
general manager, Darko Mikec, the strong operations have persuaded the
management to undertake extensive investment in production. Sales revenues in
this period amounted to 46.4m Euro, an increment of 60% over the first quarter
of 2004. Eighty per cent of the sales were generated on foreign markets,
primarily in the EU and the US.
Mikec stated that Metal had not earned much last year but since the start of
2005 it has operated better than expected so the company has decided to invest.
According to Mikec, the investment into production predicted the upgrade of the
outdated sections rolling facility and the purchase of a flattening and cutting
machine.
Total investment in production and distribution amounts to 59m Euro for the
period 2005-2010. The shareholders of Metal and the management of the Slovenian
steel group have approved the investment strategy.
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TELECOMMUNICATIONS
Telekom Slovenije purchases Avtenta.si
Telekom Slovenije, the fixed-line state telco, acquired 75% of Avtenta.si, a
company specialising in system integration, New Europe reported recently.
The financial terms were not disclosed. The telco recently said that the
decision came as a means to speed up and support the transfer of its users to IP
communication solutions. Telekom acquired the stake from Avtotehna, a group
whose core businesses are IT and car sales.
Avtotehna retains a 25% stake in Avtenta.si, which will keep its name. Libor
Voncina, the Telekom chief executive, said in a press release on May 31st that
the "contribution of Avtenta.si to a faster implementation of our IP
strategy will help us to successfully face the demands of the Slovenian
market."
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