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SLOVENIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 21,108 18,800 18,100 67
         
GNI per capita
 US $ 9,810 9,760 10,060 53
Ranking is given out of 208 nations - (data from the World Bank)

Books on Slovenia

REPUBLICAN REFERENCE

Area (sq.km) 
20,273

Population 
1,935,677

Capital 
Ljubljana 

Currency 
Tolar 

President 
Janez Drnovsek

Private sector 
% of GDP 
40% 


  

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 bank-issued loans.
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 the country.

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. 

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AUTOMOBILES

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 (€254,000). 

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AVIATION 

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 Frankfurt.
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. 

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BANKING

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).

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CHEMICALS

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.

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ENERGY

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.

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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 reported.
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.

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FOREIGN INVESTMENT

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 preoccupied.
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.

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TOURISM

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 Bojan Meden. 
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 significantly. 
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 Majda Dekleva. 
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.


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