Books on Slovenia
% of GDP
Update No: 092 - (01/01/05)
New government makes it up with Croatia
Slovenian Prime Minister Janez Drnovsek, in office since elections in October,
has said that his government would back Croatia's accession to the European
Union despite their long-standing border disputes. "Slovenia has and will
back Croatia's accession to NATO and the European Union always bearing in mind
that Croatia, as any other state, has to meet the conditions for joining,"
Jansa told a press conference.
His predecessor, Anton Rop, in September withdrew Ljubljana's support for
Croatia's EU bid after relations worsened when Croatian border police briefly
detained a Slovenian opposition politician for alleged illegal entry.
Jansa, who won general elections in October, spoke after his first meeting with
his Croatian counterpart Ivo Sanader on the sidelines of a Central European
Initiative (CEI) summit held in Slovenia's Adriatic resort Portoroz.
Ljubljana aims for more FDI and less red tape
The new Slovenian government has decided to reduce state involvement in the
economy and to promote foreign direct investment (FDI) for the next term.
Slovenia has little more than $2bn in FDI so far, a low figure for such a
successful transition economy as Slovenia's.
Restrictions on foreigners owning assets were in place, largely to deter Italian
mafiosi from entering in droves. EU membership makes a relaxation imperative
here to comply with Brussels regulations. A new campaign against red tape is now
to be the order of the day.
In the coalition's programme on the economy, the four coalition partners have
set down the withdrawal of the state as an owner of companies as one of the main
priorities. The withdrawal will involve the sell-off of assets owned by the
state-run Restitution Fund and Pension Management Fund, as well as the sale of
state-held stakes in companies such as the national telecom, Telekom Slovenije.
The privatisation of Telekom is dealt with in detail in the programme, with the
government aiming to establish competition on the telecommunications market
before launching the gradual sale of Telekom and its subsidiaries. The
government also hopes to make Slovenia one of the most developed countries in
terms of information technology.
Under the coalition's agreement, information technology is a crucial field for
the future development of Slovenia. Another economic priority of the new
government is the promotion of entrepreneurship. Measures will be undertaken
that will facilitate the establishment of companies by cutting red tape and
costs associated with this.
The coalition intends to promote foreign direct investment, with one of the
objectives being the establishment of a level playing field for local and
foreign investors. The coalition also reaffirms Slovenia's commitment to adopt
the Euro in 2007. According to the programme, the adoption of the Euro is
associated with a number of benefits. However, in the opinion of the coalition
the adoption of the single currency also brings with it a number of challenges,
which require that the Slovenian economy becomes more competitive in the future.
The new government also hopes to increase discipline in the payment of taxes,
while promising to offer tax breaks to companies which invest in research and
development. It also aims to improve the current tax system, among others by
adopting changes to the already adopted income tax act. The basic tax policy
goal will be to reduce the income tax burden. In the area of banking, the
government intends to promote "healthy competition" that will benefit
consumers. The government also intends to promote mortgages as a form of
As regards the privatisation of state-owned banks, the coalition intends to
select strategic partners, which will promise to promote entrepreneurship in the
country. One of the priorities of the new government in transport policies will
be to reduce the burden on the environment as well as reinstating the status of
the fifth and tenth pan-European routes as the priorities of transport policy in
Ecological issue with Croatia
Slovenia is backing the EU bid of Croatia. But this may be partly to gain
leverage over points in dispute. One of them came to light recently.
The Slovene Association of Ecological Movements (ZEG) and Croatia's Rijeka
Ecological Movement recently announced their protest against Croatian plans to
construct an oil terminal on the Adriatic island of Krk. Karel Lipic, head of
ZEG, said that Croatia's parliament is currently considering Adria and Russia's
Yukos plans to construct the oil terminal and pipeline, which would run from
Russia through Belarus, Ukraine, Slovakia, Hungary and end in Croatia.
Lipic emphasized that ZEG will bring the organization's concerns to the
attention of the new government, adding, "We informed the previous
government about the issue about one year ago, but there was no response."
Lipic emphasized that ZEG is concerned about potential ecological problems that
could result from the construction of the oil terminal such as waste disposal or
oil leaks into the Adriatic Sea from oil tankers. Tankers will transport oil to
the United States. Lipic stressed: "If an accident like the one that
happened two years ago in Spain should occur in the Adriatic, it would mean an
environmental disaster." Lipic added that construction of the pipeline
would also affect Slovenia's neighbour Croatia along with other neighbours.
Ferrari and Maserati showroom opens in Ljubljana
A Ferrari and Maserati showroom, worth one million Euro, opened in Ljubljana on
November 19th, making Slovenia the 51st country to offer the famous Italian
sports cars. The car dealer AC Maranello Auto will also offer a service
facility, New Europe reported.
AC Maranello Auto, a subsidiary of Autocommerce Avto Triglav, has promised that
the waiting period for the cars would be no longer than those on other markets.
The dealer will offer all models of both makes. While the price of a Maserati
would range between 24.6m tolars (103,000) and 29.7m tolars (124,000),
Ferraris will be available at 38.8m tolars (162,000) to 61m tolars
Slovenia's Adria Airways becomes member of Star Alliance
Adria Airways has become a regional member of the Star Alliance, according
to an agreement the carrier signed recently with what is the world's largest and
oldest strategic airline association. "This proves we are a reliable and
high-quality carrier," Adria chief executive, Branko Lucovnik, said, STA
News Agency reported.
Adria, which joined the association alongside Croatia Airlines, will now be able
to offer their passengers all the benefits of the Star Alliance network, such as
check-in through to the point of arrival, access to premium airport facilities
and frequent flyer programmes.
"From the point of view of Star Alliance, the joining of Adria Airways and
Croatia Airlines as regional members means that we can offer our customers a
greater choice by expanding customer benefits to the networks of these two
carriers," Star Alliance executive director, Jaan Albrecht, said in
After the operational integration of Adria in the association, the airline's
passengers will enjoy the same benefits as customers of the other members of the
association. "This will help to improve our company's
competitiveness," Lucovnik explained.
Profit boost for NKBM
Slovenia's second largest bank, Nova Kreditna banka Maribor (NKBM), saw its
gross profit for the first nine months of 2004 rise by 11.4 per cent to 5.054bn
tolars (21m) over the same period of 2003. Reviewing the bank's none-month
results the supervisory board of NKBM said the results exceeded initial
estimates, the Slovene Press Agency reported.
In the first nine months of 2004 the state-owned bank increased its total assets
by 35.14bn tolars (146.56m) to 579.17bn tolars (2.415bn).
Helios buys more Zvezda shares
Slovenian chemical group Helios increased its stake in the Serbian company
Zvezda-Helios from 52.38 to 76.88 per cent, the Domzale-based group said
recently, the Slovene Press Agency reported.
Helios became the majority owner of the Gornji Milanovac-based manufacturer in
May 2004. It acquired the additional stake in the auction held by the Belgrade
Stock Exchange on November 10th 2004. Zvezda-Helios posted sales revenues of
6.3m in 2003.
Deal signed for construction of new power plant in northeastern Slovenia
Slovenia's largest power company Holding Slovenske elektrarne (HSE), aluminium
producer Talum and Austria's largest power company Verbund have signed an
agreement on the establishment of a joint venture that will plan the
construction of a large gas power plant in Slovenia, STA News Agency reported.
The agreement on the establishment of Plinsko parna elektrarna was signed on 3rd
December. The ownership structure of the company will be as follows: HSE will
hold the largest stake of 45 per cent, Verbund will control 40 per cent and
Talum 15 per cent of the new Kidricevo-based company, northeastern Slovenia.
Brane Kozuh was appointed its manager, HSE said in a press release.
The plant, located 25km southeast of Maribor, is to have an installed power of
800 megawatt. If constructed, it will have the latest equipment that will
guarantee low nitrogen oxide (NOx) emissions. Powered by natural gas, the plant
will also have low CO2 emissions, so its operations will be in line with
international environmental standards of the Kyoto Protocol.
In the preparatory stage, until 2007, a decision on whether to go ahead with the
construction of the plant will be made. If the project is approved, construction
of the plant will take until 2009.
The investment is estimated at 400m euros and will be financed by the three
partners in proportion to their ownership shares.
FOOD & DRINK
Fructal generates losses of 637.15m tolars
Fructal, the leading Slovenian fruit beverage producer, generated losses of
637.15m tolars (2.65m) in the first nine months of 2004. After Slovenia's
entry in the European Union, hostile conditions were considered to be the main
reason, with figures in the red for the company that reported a profit of
212.96m tolars (0.88m) in the same period in 2003, the Slovene press Agency
According to management, the company incurred losses after its exports to the
markets of former Yugoslavia were curtailed and prices of sugar doubled
following the country's EU entry. Although management has already launched a
number of short and long-term measures, the Ajdovscina-based producer expects
losses to increase further given all the negative trends.
EBRD chief says Slovenia should keep investing in Balkans
Slovenia will have to continue to invest abroad, particularly in the Balkans,
EBRD president, Jean Lemierre, said recently on the sidelines of the CEI
[Central European Initiative] summit in Portoroz, STA News Agency reported.
He stressed the region is more open to FDI [foreign direct investments] than
ever before, and its economic growth is relatively high. He nevertheless pointed
to the region's political problems, with which investors are still rather
The president of the European Bank for Reconstruction and Development (EBRD) met
Slovenia's incoming PM, Janez Jansa, to discuss EBRD's activities in Slovenia.
While Lemierre labelled the Slovene economy successful, he thought one of the
main challenges for the government is the creation of an environment conducive
to the development of small- and medium-sized companies.
The banking sector should be strengthened, the EBRD president told Jansa, and
stressed that the government should devise a clear-cut privatisation strategy.
Also, Lemierre met representatives of Slovenia's largest bank, Nova Ljubljanska
banka (NLB) and its chair Marjan Kramar to discuss further cooperation.
The owner of 5 per cent of the NLB, the EBRD is willing to take part in NLB's
activities as its owner and strategic partner, the NLB said in a press release.
Tourism in Slovenia keeps rising
The number of tourists visiting Slovenia keeps rising, accompanied by an
increasing inflow of foreign currency. The Slovenian Tourist Board (STO) is
adjusting its programme to the latest figures, its key projects being included
in the coalition agreement of the new government.
The management of the Tourism, Hotels and Restaurants Association of the
Slovenian Chamber of Commerce recently discussed tourism-related data for 2004
and the proposal on the STO 2005 programme, which was presented by STO director
The programme is based on three main pillars - the information system and
e-business (the set-up of the new domain www.slovenia.info, the integration of
an on-line booking system), research and development (profiles for Slovenia's
key markets, upgraded strategies for promoting Slovenia's tourism), and business
communication (the introduction of the UK among the key markets, the set-up of
an info point in Paris).
Meden agreed with a remark made by Janez Pergar, chair of Kompas, one of
Slovenia's leading tourist operators, who pointed out that the key partners of
the STO were companies rather than organisations and ministries.
Head of the Slovenian Association of Tourist Agencies Mateja Kunc noted that the
association saw a competitor in the information system developed by the STO.
Head of the Economics Ministry tourism directorate Darja Radic stressed that the
STO 2005 programme was very transparent. She said the ministry had already
reviewed the programme and that it supported it.
In the first ten months of the year, Slovenia attracted 2.09 million tourists,
4% more than in the same period last year. Alongside the increase in the share
of foreign guests, the inflow of foreign currency has been raising
Over the first eight months of the year tourism brought Slovenia EUR 874.08,
which is 7% up compared to last year. Foreign currency inflow is expected to
total EUR 1.7bn at the end of the year, according to independent consultant
There has been an increase in the number of tourists coming from western
countries, while the number of guests from the east has dropped.
The number of overnights by guests from the UK has increased by almost one
third, with an increase of 40% in the overnight stays by visitors from France. A
growing number of tourists from Israel, the US, Australia, Canada and Japan has
also been recorded, according to Dekleva.
Hit buys 85% of hotel chain Knompas hoteli
Gaming chain Hit recently bought a 15.32 per cent stake in the hotel chain
Kompas hoteli, raising its total share in this Kranjska gora-based company to
85.52 per cent, Kompas hoteli said, Slovene Press Agency reported.
Slovenia's leading gaming chain published a takeover bid for Kompas hoteli on
October 15th, offering 15,793 tolars (66) per share. It did not state in
which case the bid would be considered successful. The company promised in the
bid not to cut jobs in Kompas hoteli and pledged to secure a long-term
development for Kranjska gora that would make this Alpine ski resort more
competitive with domestic and foreign rivals. The management of Kompas hoteli
did not oppose Hit's takeover attempt, estimating that it was not contrary to
the company's strategic goals. The two companies have not yet signed any
takeover agreement, however.