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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: 102 - (27/10/05)

Drnovsek says Slovenia and Croatia should opt for arbitration 
Nothing is more important for a country than to secure its borders. "It would be better if Slovenia and Croatia opt for arbitration on their border as there is very little possibility that the two countries could reach an agreement in talks," Slovenian President Janez Drnovsek has said. 
Speaking on the margins of a summit of Central European Presidents in Zagreb on 14th October, Drnovsek said that it was unlikely the two countries could find a suitable substitute for the agreement he reached in mid-2001 when he was still prime minister with the then Croatian Prime Minister Ivica Racan. Therefore it would be better "that the countries opt for a neutral institution that would make a judgment based on all the given facts," he said, adding that they should do this as soon as possible. 
This would take the burden off of politicians and the public in both countries. "Otherwise we will continue to see the current tension repeat themselves over and over again... The relations are getting worse, the atmosphere is worse, the energy is being wasted...which is a shame given that we have so much potential for cooperation," he said. 
Drnovsek's comments come after he met Croatian Prime Minister Ivo Sanader to discuss the recent Croatian proposal for arbitration on the border. "The decision about what institution and what kind of arbitration will, of course, have to be made in talks once the two countries decide for arbitration. There are several possibilities," he said. 
He said that the Drnovsek-Racan agreement - which was confirmed by the two governments but never ratified because of wide opposition in Croatia - will be an important factor in negotiations. According to Drnovsek, the agreement is "the biggest common negotiating achievement". 
Moreover, Drnovsek said that the two countries were on the verge of opting for arbitration in the past, including just before the 2001 agreement was reached. "Slovenia was well on the way to formally proposing arbitration," he revealed. 
Although not on his schedule initially, Drnovsek also met his Croatian counterpart Stipe Mesic for discussions on bilateral issues. Drnovsek said they agreed to hold a meeting in November to try and help promote the resolution of open issues. 

Slovenia the arbiter
There is one area where Slovenia is in a position to mediate for others - that is the other former Yugoslav republics in their bids to obtain candidate status for entry into the EU.
Recent events have helped enormously here. If Turkey is considered suitable for talks on entry, how can the Balkan countries it once lorded over not be? They are all well within Europe and share its Christian culture. 
Balkan states are unfortunately prone to wars. EU membership is just what could weld them together, making war between them irrevocably impossible henceforward. 
There is nobody better placed to plead their cause than highly respected Slovenia - unless it is that other Balkan heavyweight, Romania.

Bucharest-Ljubljana axis in favour of continued EU enlargement 
Romania and Slovenia support further EU enlargement and the need to give countries of the Western Balkans the prospects of joining the Union, Romanian Foreign Minister Mihai-Razvan Ungureanu and his Slovenian host and counterpart Dimitrij Rupel told the press on 28th September. 
Speaking after Ungureanu's first official visit to Slovenia, the ministers praised bilateral ties as excellent. Nevertheless, they would like to see cooperation further strengthen within the EU. 
Ungureanu and Rupel agreed that the launch of EU accession negotiation with Turkey at the beginning of October would be a step forward, as it would give a political meaning to the enlargement process. They also agreed Croatia must be included in that process as well. 
Ungureanu was later on also received by President Drnovsek, whom he briefed on Romania's interest in economic cooperation and joint expansion to other markets, such as Central Asia, Ukraine and Moldavia. 
Although Drnovsek sees these areas as interesting for investors, he said the two countries will be able to cooperate better when Romania joins the EU. Moreover, the president accepted Ungureanu's invitation to visit Romania. 

The Economy in Focus
There is an excellent article on domestic developments in Slovenia; we publish the first part.
It is by Andrej Brstovsek, posted on Tol on the web on 17th October 2005. Andrej Brstovsek is a journalist with the Ljubljana daily Dnevnik.
Slovenes analyse the centre-right government achievements after a year in office, while the opposition gets a new leader. 
Ljubljana, Slovenia "It's the economy, stupid!" Bill Clinton's famous maxim seems to have found a new home in Slovenia as the country assesses the performance of its government a year after the historic landslide victory that brought the right to power. 
Prime Minister Janez Jansa, who took over after many years on the opposition benches, says that economic and political stability are the main achievements of his tenure so far. Most analysts agree that the economy is doing well, although it is too soon to say whether this is also due to the previous government's policies or indeed the sole achievement of Jansa's team.
It is no surprise that the economy took the top spot not only with politicians but also analysts and society at large. For a long period Slovenian politics had two main priorities: membership of NATO and the European Union. Politics was all about achieving those two goals - and that happened last year.

Capable of running a government
The incoming centre-right government was greeted with mixed expectations after last October's general election. Voters were fed up with the centre-left Liberal Democrats (LDS) who had ruled in Slovenia for over a decade.
But it was unclear how adept Jansa's Slovenian Democratic Party (SDS) would be at running a government. It had been the main opposition group for many years, during which it held no decision-making positions. Many were asking whether it had sufficient human resources to run a country, and some of its beliefs seemed vague too: in opposition, the party had long been a vocal critic of the slow pace of transition, claiming that Slovenia had not moved away from its communist past fast enough.
Now, a year after the election, the fog is lifting over the government, which in addition to Jansa's SDS also includes the New Slovenia Party and two parties that were also part of the previous governing coalition, the Slovene People's Party and the Democratic Party of Pensioners of Slovenia. 
The government took over smoothly and its members quickly adapted to their new roles. Jansa, who at times used to be rather aggressive in opposition, is now giving the impression of a calm and polished statesman.
By all measures nothing seems to stand in the way of Slovenia's adopting the euro in 2007. Economic growth for 2005 will probably be around 3.9 per cent as anticipated. Exports have increased and unemployment is down. There are no major problems with inflation despite skyrocketing oil prices on the world markets. 
But Jansa's government still has some major economic issues to tackle. The prime minister himself cited structural reforms as a top priority. The government is now considering introducing a flat tax or, as a distant possibility, increasing the VAT rate to make up for a loss in revenue after the possible abolition of the wage tax paid by employers.

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AUTOMOBILES

Adria Mobil to increase production with new plant 


Camper and caravan maker Adria Mobil marked its 40th anniversary by moving its production to a new, state-of-the-art plant, a 35m Euro investment. Company's manager, Sonja Gole, said that the past year was the most active yet for the firm, Slovenia News reported.
According to Gole, the new plant will ensure the firm's competitiveness on the world markets. The firm has already succeeded in Japan and Australia, however, one of the main parts of its long term strategy is looking for opportunities on new markets. 
With the new venture, Adria Mobil plans to increase its annual output by 30%, which is 17,000 vehicles. This is also the basis of a successful future for all 1,200 employees of Adria Mobil, Gole pointed out. 
Despite the investment, the company has reached it business goals in the first half of 2004, topping the operating profits from the same period last year by 10%. Customers are mainly interested in camper Action and caravan Vision, representing company's top level products. 
In 2004, the firm set a new record by selling 13,000 products on 26 markets, generating more than 200m Euro in revenues. Last year's net profit reached 10m Euro, which is 31.5% more than in 2003. 
Adria Mobil's main markets are France, Italy, Germany, Sweden, Netherlands and Denmark. In Europe, the company holds a 6.5% market share, which makes it the fifth most successful camper and caravan maker. In Slovenia, it is one of ten biggest exporters.

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AVIATION

Direct flights between Ljubljana and Warsaw 

The Slovenian airline, Adria Airways, began operating its newly scheduled service between Ljubljana and Warsaw recently, SINFO reported.
Adria will fly to the Polish capital four times a week in partnership with LOT Polish Airlines. The two airlines have been offering daily flights to Warsaw via Vienna since May 2004, but the direct service between the two capitals will cut the journey time significantly.
Adria will fly to Warsaw on Monday mornings and Friday evenings, while LOT will operate a midday flight on Wednesdays and Sundays. Flight duration will be approximately ninety minutes and the least expensive return fare will cost 150 Euro.

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BANKING

NLB group growing rapidly this year 

The group Nova Ljubljanska banka (NLB) has reinforced its network and largely improved its last year business results in 2005, according to its chairman, Marjan Kramar. The group's pre-tax profit is to reach SIT 28 billion (116.9 million Euro) this year, while total assets are to go up 18 per cent to around SIT 2870 billion (12 billion Euro), Slovenia Business news reported on October 10th. 
The results could be attributed to several factors, including the increase in sales and investments and lower costs, Kramar told the press in Ljubljana on October 7th. The largest Slovenian bank grew by 14 per cent compared to last year's 10 per cent, with banks on foreign markets also being very successful. The group NLB does not aim only at former Yugoslavian markets. Half of its business is conducted in Western Europe and the other half in SE Europe. NLB took over the Novi Sad-based Continental banka and plans to merge it with the Belgrade LHB banka. NLB runs the rapidly growing companies LB Leasing Beograd and Prvi faktor Beograd. In the Serbian banking market, it holds a share of around three percent, which it would like to rise to 10 per cent.

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CREDIT RATINGS

Slovenian Reinsurer Sava Re assigned BBB+ ratings

Standard & Poors Ratings Services has assigned its BBB+ long-term counterparty credit and insurer financial strength ratings to the Reinsurer company, Pozavarovalnica Sava dd (Sava Re). The outlook is stable. Sava Re is the leading reinsurer in Slovenia, holding a 55% share of the Slovenian reinsurance market, with total assets of SIT 57.5bn (US$297m) and a gross premium income of SIT 21.3bn at the end of 2004. Standard & Poors' stable outlook reflects expectations that Sava Re will maintain its leading position in the Slovenian reinsurance market, continue the controlled growth of its portfolio in EU reinsurance markets, maintain strong capitalisation, sustain good performance and maintain its controlled and conservative investment strategy, SINFO reported recently.

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FOOD & DRINK

Austrian food companies seek stronger presence in Slovenia

Exports of Austrian food companies to Slovenia increased in the first two quarters of 2005 by 33% year-on-year, while imports of Slovenian food items soared by 149%, Georg Krauchenberg of the Austrian embassy told a press conference, New Europe reported.
Despite the rising Slovenian exports, Austria is still ahead: the value of Austrian food exports increased from 45 million to 59 million Euro in the first six months of the year, while Slovenian export were up from six million to 15 million Euro. "The substantial increase of bilateral trade is a logical consequence of Slovenia's EU entry. We are recreating a common market now, since the situation before the abolition of borders was especially difficult for food products," Krauchenberg said in a presentation of Austrian Food companies on September 20th.
The presentation comprised 45 Austrian food companies and generated great interest among Slovenian companies as well. Representatives of large trade companies, hotels, spas and specialised importers attended the presentation.
Most products are already on the market in Slovenia, but the Austrian producers want additional promotion. According to Krauchenberg, Austrians come to Slovenia as tourists, while Slovenians often go shopping in Austria. The exchange of food products is therefore welcome. Demand differs according to food segments, but dairy products and meat are the biggest exports to Slovenia. Imported meat is mainly fresh, while Slovenia has its own quality salami producers. Chocolate is another key product imported from Austria.

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FOREIGN ECONOMIC COOPERATION

Slovenia seeks better ties with Latvia and Estonia 

Economic cooperation between Slovenia and Latvia could be improved, especially in tourism and information technology, Slovenian Economics Minister, Andrej Vizjak, said recently. Speaking after meeting with his Latvian counterpart, Arturs Krisjanis Karins, Vizjak said that Latvia is very strong in the furniture, machinery and metal industries, New Europe reported. 
Vizjak and Karins also discussed the proposed EU Services Directive and agreed that it should be passed as soon as possible. Karins also described Latvia's successful drawing of money from the EU structural funds. Trade between Slovenia and Latvia is modest, with 21.5 million Euro (0.08 per cent of total Slovenian trade) in trade between the two countries in 2004. The largest Slovenian exporting company to the Baltic state is the drug maker Krka. Another drug maker, Lek, marketing and service company Studio Moderna, and Trimo, a maker of pre-fabricated construction panels, also have their representative offices in the Latvian capital Riga. 
The business delegation which accompanied the minister meanwhile attended the Slovenia-Latvia business forum. After the forum, the businessmen from both countries met for individual talks. 
As regards Estonia, Vizjak was upbeat about the potential for boosting trade after a meeting with his Estonian counterpart Edgar Savisaar. "We have assessed that we have plenty of room for growth, in particular as members of the single European market," he told the press. Vizjak believes IT, the metal industry, the electronic industry and tourism offer the best potential for cooperation between Estonian and Slovenian companies. According to him, trade has so far been modest because of the distance between the two countries, and the fact that they have both been busy addressing other issues at home and in association with the EU. 
Bilateral trade last year amounted to a mere 9.8 million Euro, with Slovenia's exports at 7.9 million Euro and imports at 1.9 million Euro. Ministers Vizjak and Savisaar also discussed foreign direct investment (FDI) in their respective countries and the very different paths that they have taken. Estonia is very open to FDI, in particular from Scandinavia: over 90 per cent of the economy is privatised, whereby the financial and banking sector is 95 per cent controlled by foreign enterprises. 

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INFORMATION TECHNOLOGY

New provider enters telecommunications market 

The Slovenian telecommunications market has a new Internet service provider, the Maribor-based company T-2, which is the first to offer the new broadband technology VDSL (very high speed digital subscriber line), Slovenia News reported recently.
The company's director, Matevz Turk, said that the company wants to become the leading challenger to market leader Siol, targeting a 25% market share within a few years' time. 
T-2, the company owned by financial firm Zvon Ena Holding, offers its users a broadband connection using the new technology VDSL, which enables speeds of up to 50 Mbps/20 Mbps to be shortly upgraded to 100 Mbps/50 Mbps. 
Potential VDSL users do not need an analogue PSTN line, nor an ISDN or ADSL line. Those, who wish to keep their phone lines at Telekom Slovenija will, however, get a 4.17 Euro discount on their monthly subscription fee. 
This will make the basic VDSL Internet connection (1 Mbps/256 Kbps) accessible at 16.69 Euro per month. 
T-2, which has so far put up around 120 switches across Slovenia, also offers the possibility of a stationary phone line and digital television with 120 channels.

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MINERALS & METALS

Slovenian Steel posts 34% revenues rise 

The Slovenian Steel Group generated revenues worth 59.77 billion tolars (249.47 million Euro) in the first half of 2005, up 33.5 per cent year-on-year, STA reported. 
Net profit increased from 231million tolars (0.96 million Euro) to 3.98 billion tolars (16.61 million Euro). The group's output was 226,715 tonnes of steel in the January-June 2005 period, a 4.1 per cent increase over the same period in 2004, the company said in a recent statement. 

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