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SLOVENIA


 

 

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)

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Update No: 117 - (22/02/07)

It is a happy land that has no history, or contemporary history at least. Slovenia certainly has a history, but by comparison with its strife-torn former members of the Yugoslav Federation it is lucky. Only 79 people were killed in its secession from that doomed entity. 
This is 79 too many for sure (and doubtless many maimed as well), but it is better than the quarter of a million killed in Bosnia, not to speak of Serbia and Croatia.
In so far as it has disputes they are at least about peaceful domestic matters, such as control of the economy. 

Slovene president, PM, in dispute over new Central Bank governor
Slovenia's President Janez Drnovsek refused on February 12th to withdraw his candidate for the new Central Bank governor, despite fierce opposition to the appointment from the ruling party. The row between Drnovsek and Prime Minister Janez Jansa could trigger a crisis, since the term of the current governor, Mitja Gaspari, expires March 31.
The dispute threatens to damage the image of Slovenia, which adopted the euro on Jan.1 and won plaudits for its smooth transition to the single currency. Its Central Bank governor is automatically a member of the European Central Bank.
Drnovsek's candidate - vice governor Andrej Rant - is unlikely to get support in parliament, which is to vote on him soon. Jansa's Slovene Democratic Party controls the majority in the chamber.
The procedure of appointing and voting for a new bank governor usually takes weeks and could last until after Gaspari's term is over.
In Slovenia, the president appoints a new governor, but his choice must be approved by parliament. It has already rejected Drnovsek's recommendation for Gaspari to get a second mandate.
Jansa had accused Gaspari of forecasting potential future financial troubles for Slovenia in his internal bank reports - a view Jansa claimed was not backed up by any other analysis. But critics claimed Jansa's centre-right party was against Gaspari because he is close to Drnovsek's former ruling party, the centre-left Liberal Democrats, now in opposition.

But Slovenia has a future
Slovenia has arrived. It is to have the presidency of the EU in 2008. PM Janez Jansa believes that, if one compares it with other states which were to take on 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 recently. 
He stressed that alongside the implementation of economic and social reforms, the preparations for the 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 the experience.
What is to be the theme of its presidency?

The Athens-Ljubljana axis
Slovenia and Greece are at the other ends of the Balkans. But they have something very important in common - they are the two established members of the EU. 
True - Bulgaria and Romania have just joined. But they are neophytes, deeply under suspicion, in probation almost. The Slovenes and Greeks are at a comparable stage of development, with curiously enough about the same per capita GDP. 
They share something more important in common - they are the natural gateways to the Balkan region. 
To join hands in integrating the Western Balkans into Europe, that is the noble goal of the new axis between them. 

The triumphal tour 
Greek Prime Minister Costas Karamanlis is mustard keen on this idea. He went on a tour of the region in mid-January.
On January 15th he stressed that Slovenia serves as an example for all the countries aspiring to join the Union and wishing to "share with us the benefits of European integration." Addressing an event in Ljubljana celebrating Slovenia's entrance into the euro-zone, Karamanlis, noted that Slovenia's case is an "example that clearly demonstrates that our Union is open to all those that adopt its rules and fulfil all the conditions and criteria (for membership)."
Karamanlis arrived in the Slovenian capital on January 14th -- following his official visit to neighbouring Croatia -- to attend celebratory events commemorating the country's highly prized entrance into the euro-zone, as the one-time former Yugoslav republic on Jan. 1, 2007 became the 13th member-state to introduce the single European currency.
Karamanlis joined European Commission President Jose Manuel Barroso, German Chancellor Angela Merkel -- whose country currently holds the EU presidency -- and European Central Bank President Jean-Claude Trichet, among others, at a reception hosted by Slovenian Premier Janez Jansa. Slovenia's euro-zone membership also coincided with the 15th anniversary of the country's independence.
"This development (Slovenia's euro-zone entry) sends a message that continuing European integration is more attractive than ever. It is a very significant message in the current junction vis-a-vis the blueprint for the European edifice, whereas it is also a positive message of confidence in the European economy and currency," he said in his address.
The Greek PM also stressed that Slovenia serves as an example for all the countries aspiring to join the Union and wishing to "share with us the benefits of European integration".
Karamanlis, in fact, indirectly touched on neighbouring Turkey's increasingly complicated EU course, as he noted that Slovenia's case is an "example that clearly demonstrates that our Union is open to all those that adopt its rules and fulfil all the conditions and criteria (for membership)."
Finally, Karamanlis congratulated the Slovenian people and leadership over the country's historic membership in the euro-zone, reminding that Athens vigorously backed the country's accession as the 13th euro-zone member. The country of two million introduced the euro on Jan. 1, becoming the first of the 10 countries to join the bloc two years ago that satisfied economic criteria needed to join the eurozone. 

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Strategic Council Recommends Flat Tax Rate of 20%
The big thing has happened. 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.

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AUTOMOBILES

Electronic maker opens factory in Russia


Iskra Avtoelektrika, the Sempeter pri Gorici-based maker of electronic components for the car industry, recently opened a new factory in Rzhev, Russia, according to news website reporter.gr. 
The Pramo Iskra venture company has a share capital of US$200,000 and will manufacture starters for cars, mainly for the Russian market, Iskra Avtoelektrika was cited as saying. Pramo Iskra, which will initially employ 60 workers, is part of Iskra Avtoelektrika's efforts to increase its presence on the Russian market, it was reported. The company plans to hold a 20 per cent market share by the end of this year. The factory's annual output will max out at 250,000 starters, with sales revenues projected at US$ five million in 2007. According to the news website, the company expects to gradually increase production and projects sales revenues of US$ eight million in 2009.

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BANKING

Abanka Vipa Bank ranks third by assets

Slovenia's Abanka Vipa Bank ranked third by assets made a successful international road show - netting 120 million Euro from various European investors - the bank said in Ljubljana, according to website reporter.gr. 
The money, invested mainly by British (39 per cent), Italian (15 per cent) and Swiss (ten per cent) investors, will enable Abanka to issue bonds for the financing of a loan, the bank said. The transaction was to be completed in January. This is the first international issue of bonds for the bank and the first Slovenian international bonds issue following the January 1st, Euro changeover, the press release said. Abanka Vipa posted profit after tax of 20 million Euro for 2005, an increase of 17 per cent year-on-year, it was reported.

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ENERGY

Nafta Lendava to build Biodiesel refinery in Slovenia

Oil refinery Nafta Lendava and its Austrian partner CMB Maschinenbau & Handels announced they would build the biggest biodiesel refinery in Slovenia and one of the biggest refineries of the kind in Europe, according to news website reporter.gr. 
The 22.2 million Euro refinery will open at the beginning of 2008, and its annual production of 60,000 tonnes of biodiesel will amount to 88 per cent of the total production in Slovenia, and one per cent of the total EU production, it was reported. The presentation of the project in Lendava was attended by Slovenian Economy Minister, Andrej Vizjak, and Environment Minister, Janez Podobnik. Vizjak was cited by the news website as saying that energy was the key foundation for the economy, especially in the EU. The bloc relies on imports for 50 per cent of its energy needs and for 82 per cent of its oil needs, a figure which will reach 93 per cent by 2030. According to Vizjak, the problem could be solved with projects which reduce Europe's dependence on imported energy. The European Commission had already adopted provisions aimed at increasing the use of renewable sources from seven percent to 20 per cent by 2020, he added. The directors of Nafta Lendava subsidiary Nafta Biodizel and the Austrian partner were cited as saying the project would reduce Slovenia's dependence on imported mineral fuels and increase the use of alternative energy sources. The refinery will create 23 new and 50 indirect jobs, while the laboratory for testing other oils for potential biodiesel production will have an education centre, it was reported. About 60,000 tonnes of vegetable oil and 6,000 tonnes of methanol will be refined in the yearly biodiesel production, which will be 7.5 times higher than the total production in Slovenia in 2005.

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FOOD & DRINK

Merger talks re-launched between dairies

Loss-making dairies Pomurske mlekarne and Mlekarna Celeia have re-launched talks about a possible tie-up. Both are facing losses, they need to modernise production and doubling of capacity would not make sense; they realise that only streamlining can improve results, Pomurske Mlekarne Chairman, Ivan Rotdajc, was cited as saying. His statement came after business daily Finance reported that the dairies are being prodded towards a merger by its creditor banks NLB, NKBM, PBS and Probanka. The paper also said that the banks have made it clear they would close the tap if the dairies do not join forces.
According to projections by Finance, Pomurske mlekarne will post an operating loss in excess of two million Euro for 2006, while Mlekarna Celeia - which has much lower assets, but higher revenues than Pomurske Mlekarne - is expected to post a loss of 400,000 Euro, New Europe reported.

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INFORMATION TECHNOLOGY

6.8m Euro software deal with Microsoft concluded

The Slovenian Public Administration Ministry concluded a 6.8 million Euro deal with US software giant Microsoft at the end of 2006 for a three-year contract involving licenses for Microsoft software, according to news website reporter.gr. 
The ministry said that the deal was joined by 123 public administration institutions, including municipalities, social care centres and agencies. The new deal comes after the previous 6.25 million Euro contract, concluded in 2003, which ran out at the end of last year, it was reported. The ministry also said it currently has no plans to completely migrate to open source software. While several open source solutions are used, such as the Linux operating system, along with various firewalls and the Apache web server, civil servants do not plan to switch now to OpenOffice.org, an open source office suite. The issues that prevent the use of open source software include costs of training, issues of compatibility with the existing documents and a lack of available local help and support, the ministry explained.

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TRANSPORT

DARS' 2006 motorway construction at 477.8m Euro

The Motorway Company (DARS) constructed 477.8 million Euro worth of motorways and other roads in Slovenia in 2006, meeting 99 per cent of the national motorway programme for 2006, DARS Chairman, Rajko Sirocic, was quoted by website reporter.gr as saying. 
Sirocic was pleased with the mild winter, as it enabled the company to make up for the delays in construction, caused by the harsh weather conditions last winter. The company's construction plan for 2007 was mulled by ministries and is expected to amount to 550 million Euro, 50 million Euro less than the original plan, drafted in October, Sirocic added. The plan calls for the construction of the Maribor-Lenart section, a part of the Prekmurje section in NE part of Slovenia. DARS also wants to complete the sections between Hajdina and Ptuj (NE), the connecting road to the seaport of Koper (SW) and the Tabor-Barnice tunnel in western Slovenia. DARS is committed to completing the motorway section Sentvid-Koseze, in a bid to speed-up traffic at the northern thoroughfares to Ljubljana. The 263 million Euro section, which includes a one-kilometre tunnel, is the most demanding unfinished section in 2007, DARS said.

Railways becoming more important mode of transport 

The quantity of goods transported via railway and the number of tonne kilometres made in railway transport increased by 2.9 per cent and 3.1 per cent, respectively, in November 2006 from November 2005, website reporter.gr said.
Moreover, the number of passengers carried in road transport and in railway transport increased by 2.2 per cent and 1.9 per cent, respectively, in the same period. The number of passenger kilometres made was up in road and railway transport (by 11.8 per cent and 4.7 per cent) and down in air transport (by 1.7 per cent). In the same comparison, the number of passengers carried in urban transport decreased by 2.9 per cent. The number of road cross-border entries of passengers increased by 10.7 per cent. The traffic of passengers at airports grew by 8.4 per cent. The quantity of goods carried increased in railway transport (by 2.9 per cent) and decreased in maritime transport (by 1.5 per cent). Traffic of goods in ports and at airports rose by 25.1 per cent and 59.0 per cent, respectively. Additionally, the number of motor vehicles registered for the first time and the number of passenger cars registered for the first time increased by 11.3 per cent and 12.2 per cent, respectively.

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