FREE GEOPOLITICAL NEWSLETTER

slovenia  

For current reports go to EASY FINDER

SLOVENIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 26,284 21,108 18,800 63
         
GNI per capita
 US $ 11,830 9,810 9,760 51
Ranking is given out of 208 nations - (data from the World Bank)

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% 



 
Update No: 105 - (30/01/06)

The meritocrats of the Alpine redoubts
The Slovenes feel themselves to be, if not the aristocrats, certainly the meritocrats, of the former socialist nations. They are by far the best off of them. They have the best location, right in the heart of Europe. They are supremely well educated by international standards, multilingual, multidisciplinary, indeed multidirectional all round, versed in the skills of the internet and the modern world and free of prejudices against new ideas.
They have been a little vexed of late that remote Estonia has stolen a march on them by initiating the flat tax, a bold idea put forward by the US entrepreneur and thinker, Stephen Forbes. It was too bold even for the Germans to contemplate at their last election. Angela Merkel perhaps failed to achieve an outright majority because she had an aide vociferously advocating the flat tax.
The Slovenes have bitten the bullet. They are giving the matter serious consideration.


Strategic Council Recommends Flat Tax Rate of 20%
A body advising the government on economic matters has made an official recommendation that Slovenia adopt a flat tax rate of 20%.
Meeting in Ljubljana, the Strategic Council for Economic Development concluded that Slovenia can afford the flat tax rate in terms of welfare and budget capacities. 
According to Joze P. Damijan, a member of the Council, the body decided to recommend a flat tax rate after it reviewed results of a preliminary feasibility study. He said a 20% rate is the most optimal. 
The Council believes the flat tax rate should be introduced after Slovenia adopts the euro, expectedly at the beginning of 2007, in order to avoid major economic shocks that could derail the adoption process, Damijan said.
Prime Minister Janez Jansa attended the meeting of the Council. According to Damijan, Jansa supports in principle the idea of a flat tax rate. 
"The government will have to decide whether to accept our proposal or not. It should be aware that the tax reform would require that other reforms be undertaken: social security payments, health care, etc," said Damijan. 
The study shows that the state stands to lose around SIT 200bn (EUR 834m) in income tax and payroll tax as a consequences of the lower tax rate, Damijan said. However, some of this can be made up with greater tax revenues from VAT, while the state will also save on taxes it has to pay for public sector employees. 
According to head of the Council Mico Mrkaic, the flat tax rate would prove conducive for economic growth. "I hope that this proposal will secure wide public backing," he said. 
Moreover, Damijan said that the Council would recommend to the group studying the feasibility of a flat tax rate to continue its work so that a final report on the matter could be presented in two to three months.

Jansa Believes Pace of EU Presidency Preparations Is Adequate
Slovenia is to have the presidency of the EU in 2008. PM Janez Jansa believes that if compared with other states which were to take on the EU presidency for the first time, the pace of Slovenia's preparations for the task is adequate, he told a traditional meeting of Slovenian diplomats on Wednesday, 4th January. 
He stressed that alongside the implementation of economic and social reforms, the preparations for EU presidency are the government's top priority, as he addressed the meeting focusing on EU presidency preparations. 
Jansa added that Slovenia is already working together with Portugal and Germany as the two countries preceding it at the helm of the EU, as well as with other EU members which could help with experience. 
FM Dimitrij Rupel, on the other hand, stressed that the country's successful OSCE chairmanship was a good test of state and international credibility and capability ahead of EU presidency. 
Rupel moreover said that the experience gained during the OSCE chairmanship was a solid basis for leading the EU. Preparing the contents of Slovenia's EU presidency will be one of the priority tasks of the Foreign Ministry, he added. 
According to Rupel, the Western Balkans and neighbourhood policy are the most likely issues on which Slovenia would focus as EU chair-in-office. Slovenia also intends to give priority to the role of the EU as global player, inter-civilisational dialogue, energy and regions. 
In their respective addresses, both Jansa and Rupel touched also on current foreign policy issues, which are also on the agenda of the two-day meeting of diplomats. 
According to the prime minister, there was no essential progress regarding Slovenia's relations with Croatia in 2005, although Ljubljana did show its readies for a fresh start with Zagreb. 
After a promising start in the first half of 2005, Croatia took an "unreasonable" step by entering bilateral talks with Italy on the division of the continental shelf in the Adriatic, Jansa said. 
"This act was fatal," Jansa stressed. He however believes that Croatia's EU accession talks have opened a new field for settling the relations with Zagreb. 
Meanwhile, Rupel stressed that Croatia should understand that its negative policy toward Slovenia influences public opinion, and this could also affect Slovenia's decisions in Brussels. 
He is convinced that the two countries should agree on and respect certain common principles. Slovenia will continue to support Croatia's EU and NATO accessions, Rupel said, adding that he expected Croatia to act in line with EU and NATO standards. 
The foreign minister also pointed to the need for "the country to speak with one voice" in foreign policy, which is defined by the government and parliament. Moreover, diplomats are obliged to represent Slovenia's official foreign policy. 
Furthermore, Rupel believes the diplomats should bring Slovenia's official standpoints closer to the public, especially in the countries with which Slovenia still has some unresolved issues.
 

« Top

CREDIT RATINGS

S&P's raises Turkey's Dogus Holding A.S. to BB- 


Standard & Poor's Ratings raised its long-term counterparty credit rating on Turkey-based conglomerate Dogus Holding A.S. to BB- from B, and removed it from Credit Watch, where it had been placed with positive implications on September 6th 2005 Emmanuel Volland, Standard & Poor's credit analyst said, "The upgrade reflects the strong positive impact on Dogus' leverage and liquidity from two recent asset disposals," New Europe reported.
Firstly the sale of a 78.1 per cent stake in food retailer Tansas to Koc Holding A.S. for US$229 million in November 2005 and secondly the sale of 25.5 per cent in ordinary shares and 49.2 per cent in founders' shares of its banking arm, Turkiye Garanti Bankasi A.S. to General Electric Co. for US$1.8 billion from in December 2005. The group is likely to have a cash position of about US$1.25 billion at year-end 2005, with unadjusted gross debt of about US$500 million at the holding-company level and Dogus Corporate, compared with US$ one billion at December 31, 2004. 
S&P's expects debt to continue to decline, as the Dogus's large cash pile will enable the group to repay some outstanding debt. 
The group's tender for the Turkish automotive inspection and national lottery concession business is unlikely to harm liquidity as Dogus plans to finance these potential acquisitions through special-purpose vehicles. Volland said, "Management's business strategy for the group's remaining operating subsidiaries, future dividend policy, and use of disposal proceeds will be key considerations for the future direction of the ratings." 

« Top

FOOD & DRINK

Droga Kolinska CEO talks about company's plans for 2006
 

Slovenia's largest food company plans a breakthrough to new foreign markets, strengthen its production network and increase its market share in Southeastern Europe, Slovenia News reported.
"One of our priorities are markets in former Yugoslavia, where we will make an effort to achieve a 10% to 15% market share," Droga Kolinska CEO, Robert Ferko Ferko, said. 
Although many of the company's products are already well known in SE Europe, Droga Kolinska intends to focus on marketing its coffee brand, Barcaffe, more, Ferko continued. 
Therefore, Droga Kolinska plans several partnerships with regional companies. It has already purchased a majority share in the Serbian coffee giant, Grand Prom, and is cooperating with Serbia's Soko Stark. 
Moreover, Droga Kolinska plans to achieve a 50% market share on the coffee market in Macedonia, Ferko added. 
The company sees the Slovenian market as important, however, it also believes it is too small, Ferko also said. 
The food company is already present in 50 countries, including Austria, Switzerland, Germany and Sweden. It would like to strengthen its position on the Russian market. 
In 2005, Droga Kolinska exported 1,200 tonnes of products to Western Europe, and it would like to increase this figure to 1,800 tonnes in 2006, Ferko said. 
One of the company's strategic plans is also a breakthrough to Arab markets. For this purpose, Droga Kolinska has already received a Halal certificate which ensures that the product is made in line with the Islamic laws, Ferko noted. 
Droga Kolinska moreover plans to enter the Turkish market, as around three to four million emigrants from the countries of former Yugoslavia live in Istanbul and its vicinity, they are already familiar with the company's products. 
Ferko also touched on the layoff plans by the company, saying that 285 workers will be made redundant, with around 150 given the pink slip in 2005, after the company was created with the merger of Droga and Kolinska in May. 
Ferko also said that Droga Kolinska plans to have 960 employees by the end of 2006, which is 110 less than at the end of 2005. 
In the past year, the company generated a total of SIT 37bn (EUR 154.44m) and the entire group SIT 47bn (EUR 196.18m) of revenues. Ferko expects the company to increase its revenues to SIT 44bn (EUR 183.66m), and the group to SIT 82bn (EUR 342.27m). 
In 2006, the company's net profit is to amount to SIT 1.9bn (EUR 7.93m), while it plans SIT 10bn (EUR 41.74m) in investments. According to Ferko, Droga Kolinska annually invests around SIT 1bn (EUR 4.17m) in purchasing and modernising mechanical equipment.

« Top

FOREIGN INVESTMENTS

Hofer to invest 100m Euro in Slovenia in 2005


Hofer Slovenija, the Slovenian arm of the Aldi Sued discount chain group, plans to invest over 100m Euro in Slovenia by the end of 2005, a quarter of all direct foreign investments in the county last year, the company said.
Hofer Slovenija added that investments in Slovenia will reach 300m Euro over the next few years, Slovene Press Agency STA reported. 
The company also plans to employ 3,000 people in the long run. While some 500 employees already work for Hofer, their number will treble by the end of next year, predicts the company, which opened its first outlet in Slovenia on December 7th. Hofer Slovenija plans to reach half of its revenues through sales of domestic products, with the company's mid-term plans anticipating annual sales to the amount of 100m Euro. Hofer plans to open 10 more shops in Slovenia in the near future, and will expand its network in the future to cover the entire country. The Alsi Sued group already has shops in Germany, Austria, the UK, Ireland, the US and Australia and plans to launch its operations in Switzerland soon. 

Egypt-Turkey sign free trade agreement 

Egypt and Turkey concluded a free trade agreement on December 28th in Cairo in a bilateral arrangement that both sides said was a step towards a Mediterranean-wide free trade zone by 2010. Egyptian President, Hosny Mubarak, and his Turkish counterpart Ahmet Necdet Sezer witnessed the signing of the agreement on the second day of Sezer's two-day visit to Cairo, the Egyptian official news agency MENA reported. 
The arrangement is to come into effect after ratification by the signatories' parliaments. Minister of Foreign Trade and Industry, Rachid Mohammed Rachid, and Turkish State Minister, Kursad Tuzman, who signed on December 28th on behalf of their countries, told a press conference that Egyptian manufactured goods would enjoy duty free entry into Turkey as soon as the agreement goes into effect. Turkish goods would see duties gradually reduced in four phases over 16 years. Each state is to grant the agricultural products of the other favourable entry conditions.

« Top

FOREIGN LOANS

EBRD grants 7m Euro loan to Slovenian SKB Leasing
 

The European Bank for Reconstruction and Development (EBRD) provided a loan of up to seven million Euro to SKB Leasing of Slovenia for the financing of leases to farms and rural small enterprises in rural areas, New Europe reported.
The loans, which come under the rural leasing sub-window of the EU/EBRD SME Finance Facility, will be complemented with grants from the European Commission for training and management improvements and with performance fees. The new loan builds on SKB Leasing's successful track record, after an earlier 10 million Euro loan for SME financing, signed in September 2004, which had been over 90 per cent distributed to final customers by December 2005.
As access to finance remains difficult for small enterprises in central and eastern Europe, leasing is one of the few available sources to support the development of this vital economic segment. SKB Leasing intends to expand its business to a rural market niche which, so far, has been out of reach of leasing companies.
SKB Leasing's ownership consolidation in 2003 and subsequent restructuring brought the company back to profitability in 2004 and boosted new business volume. SKB Leasing has become the fourth biggest leasing company in Slovenia with the forecasted turnover of 80 million Euro in 2005. SKB bank, the owner of SKB Leasing, has recently increased the company's capital by 15 million Euro. The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of entrepreneurs by facilitating their access to financing.
The Bank will make available funding of 1.1 billion Euro, of which 880 million Euro has been committed to signed projects to date. The EC has been contributing 156.75 million Euro in grant financing and for technical assistance since the launch of the programme in 1999.

« Top

 

« Back

 


 
Published by 
Newnations (a not-for-profit company)
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com