Books on Slovenia
% of GDP
Update No: 101 - (27/09/05)
Slovenia steps out
Slovenia is opening up to the wider world, being a specially well-placed
country, astride trade routes for central and southern Europe, but also now
achieving a world profile, as has neighbouring Switzerland. When Bush met Putin
for the first time it was in June 2001 in the Slovene capital, Ljubljana, a
fitting location for a summit, being the highest capital in Europe, with sublime
President Janez Drnovsek, long-time prime minister and now the elder statesman
of Slovene politics, took part in the opening of another summit on 14th
September, namely that to mark the 60th anniversary of the United Nations in New
York. Apart from being on hand for the opening addresses, Drnovsek also met Thai
Deputy Prime Minister Surakiart Sathirathai.
The president's office said the focus of the meeting with the Thai official were
UN reforms aimed at improving the organisation's efforts to fight poverty as
well as international efforts to combat global warming. Drnovsek and Sathirathai
were concerned that the UN is facing a crucial period during which it will have
to bolster activities in line with the declarations and obligations it has
adopted. Sathirathai used the meeting to outline his country's experiences in
rooting out poverty in rural areas.
In the Baltics: Jansa meets Lithuanian President
Meanwhile, Prime Minister Janez Jansa led a government delegation on an extended
tour of the Baltic states in mid-September, with the aim of bringing relations
to a new intimacy, now that they are all co-members of the EU. He held talks
with Lithuanian president Valdas Adamkus and Parliament Speaker Arturas
Palauskas as he visited the Baltic country on 12th September.
PM Jansa and the Lithuanian president discussed the current world issues,
including the political situation in Ukraine, Azerbaijan and Kosovo, the PM's
office said in a press release. They also exchanged views on the EU and its
enlargement. Adamkus was reported as saying that Slovenia plays a leading role
among the EU newcomers.
Palauskas and Jansa also talked about Croatia and economic cooperation between
Lithuania and Slovenia.
Later on, the Slovenian PM visited the University of Vilnius, the oldest
university in the region, established in 1576, where he met Chancellor
Benediktas Juodok and around 30 students studying Slovenian. Jansa thanked the
chancellor for including the study of the Slovenian language in the university
programme. The university signed an agreement on cooperation with the University
in Maribor on 30th September.
Ministers discuss ways to boost Lithuanian-Slovenian business ties
Lithuania and Slovenia have a lot of room to expand bilateral business ties,
especially in IT, tourism and pharmacy, Economics Minister Andrej Vizjak said
after holding talks with his Lithuanian counterpart Kestutis Dauksys in Vilnius
on 12th September.
Vizjak, who visited Lithuania with Prime Minister Jansa, and Dauksys focused
their talks on economic cooperation and EU-related issues. The pair reviewed the
EU services directive and the implementation of the Lisbon Strategy, Vizjak told
the press. "We agreed the need for the prompt adoption of this directive in
view of the implementation of the Lisbon Strategy," Vizjak said. According
to him, Dauksys was particularly interested by the exceptions Slovenia would be
seeking in the implementation of the directive, particularly in health and
The pair also reviewed efforts to attract foreign investors to their respective
countries and to help domestic companies go global.
Lithuania is Slovenia's most important trading partner in the Baltic, with trade
standing at 32.2m Euro, the bulk of that made up by Slovenian exports. Although
there are no barriers to intensifying trade, the countries are struggling to
overcome the distance between them and the relative smallness of their
The ministers also discussed interests to join forces in penetrating third
markets, especially in SE Europe, as well as the use of the port of Koper for
Vizjak was accompanied on his visit to Lithuania by a delegation of business
officials, who took part in a Slovenian-Lithuanian business forum. As part of
the forum, representatives of the respective commerce chambers outlined the
economic situation in their countries.
Speaking after the forum, CCIS President Jozko Cuk said he was impressed by the
extensive global experience and self-confidence of Lithuanian business
officials. "Lithuania is a very important Baltic country, which represents
almost a half of the all the Baltic economic power, and is also a bridge to the
Russian and Scandinavian markets," he said, Slovene Press Agency STA
FM Rupel and Latvian counterpart discuss SE Europe
Foreign Minister Dimitrij Rupel also accompanied Prime Minister Jansa on his
visit of the Baltic states. The visit to Latvia was the second stop on Jansa's
Rupel discussed Slovenia's relations with Croatia with his Latvian counterpart
on 13th September, saying open issues and strategic interests in cooperation
should be kept separate from Croatia's European prospects. As Rupel told the
press after meeting Latvian FM Artis Pabriks, they discussed the situation in
the Balkans, Croatia, Serbia-Montenegro and Kosovo. Rupel explained that
"the problems with Croatia are relatively insignificant compared to common
EU dominates Jansa's talks in Estonia
EU issues, in particular the changeover to the euro, topped the agenda as
Prime Minister Jansa and his Estonian counterpart Andrus Ansip held talks on
14th September. They both arrived at the conclusion that the biggest obstacle
for euro adoption is the spiralling cost of oil, which is pushing up inflation.
Despite the soaring oil prices, the Estonian PM was confident that his country
would have no major trouble. "I am convinced we will meet all criteria and
adopt the euro in January 2007," he told the press in Tallinn. Jansa was
equally confident about Slovenia's ability to make the changeover in 2007.
Slovenia is already in compliance with three criteria; exchange rate stability
will be provided next year, so inflation remains the only problem.
Talks also touched on EU enlargement. "We share the same view on Croatia's
accession: Croatia is cooperating with the Hague tribunal and we believe the EU
should launch negotiations," Ansip said.
Jansa was also quizzed by journalists about Slovenia's take on the EU prospects
of Serbia-Montenegro. He said the country is reforming and building a working
democracy, so "the European path is the only right path" for them.
The PM moreover praised Estonia's achievements, in particular the flat tax rate
which Slovenia is thinking about introducing, and said Slovenia is undergoing a
second wave of reforms that Estonia has completed already. "Estonia's
success is based on foreign direct investment; the tax system works because it
is simple, transparent and easy to understand for everyone," Jansa
Jansa was confident that the strong business delegation accompanying him on the
Baltic tour would help boost the currently modest bilateral trade. Also, Estonia
could use Slovenia as a springboard for the 100-million market in the region, he
At the end of their meeting, Jansa and Ansip signed an accord on the avoidance
of double taxation. On his last stop on the three-day tour of the Baltic states,
Jansa also met Parliament Speaker Ena Ergma, reported Slovene Press Agency STA.
Commissioner Potocnik calls for greater cooperation at EU level
Slovenia is acquiring a high profile on the EU stage. This is in no small
measure due to the exceptional ability of its representatives, multilingual and
highly educated, as they all are.
For instance, Slovenia's Janez Potocnik, the European commissioner for science
and research, has a very high reputation and does not confine himself to
emollient phrases, but is always prepared to speak his mind. He addressed
recently the need for greater EU-wide cooperation in tackling issues such as
climate change, terrorism, environmental problems and global competition.
"No member state can compete against all global pressures nowadays,
especially from developing economies such as China, India and Brazil,"
Potocnik told the daily Delo on 17th September.
According to him, there is sufficient awareness among EU member states regarding
joint priorities, but this awareness is not present to a large enough extent
when they talk about the structure of the EU budget. Potocnik voiced discontent
with the failed talks on the Union's 2007-2013 budget framework, and criticised
the last budget proposal that was submitted by the Luxembourg EU presidency.
"Compared to the proposal of the European Commission, I am convinced that
the presidency's proposal was a step backwards...Instead of addressing new
challenges associated with Europe's development, it was shifted towards Agenda
2000 - the current multi-year EU budget," he said.
The budget for science and research was among the departments whose funding was
scaled down most in the last proposal. Potocnik said that minor tweaks would
have been acceptable, but if the "black scenario" of a 41% cut in
funding as envisaged by Luxembourg's proposal was implemented, "the debate
would have had to start from scratch."
Potocnik also talked about developments in Slovenia, saying that the stated
reform efforts in the overhauled Strategy of Development are a step in the right
direction and in line with Lisbon Strategy objectives.
However, he voiced the fear that the country might have the same problem as the
EU - translating words into actions. "They have to find the strength and
courage for some changes, reforms that are long-term and crucial," he said.
Asked whether PM Jansa is sufficiently devoted to the Lisbon Strategy, Potocnik
said that this is certainly "suggested by his initiative to establish a
development ministry in charge of coordinating long-term economic reforms
aligned with the Lisbon Strategy. However, only concrete steps are what really
counts, and the prime minister's devotion to the Lisbon Strategy can only be
evaluated on that basis."
Croatia's DC calls for economic zone in Adriatic
Meanwhile, relations with near-neighbours remain all-important as ever.
Croatia's Democratic Centre (DC) party is not without its own ideas. It has
called on the Croatian parliament recently to declare an economic zone in the
Adriatic Sea and pass a law establishing a coast guard.
The move came after a recent proposal by Slovenia to proclaim an ecological zone
in the Adriatic. The problem of demarcation of the border with Slovenia should
be resolved through international arbitration, which the DC has always seen as
the only proper instrument for resolving the issue," the party's secretary
for international affairs, Radovan Fuchs, was quoted as telling reporters in
Fuchs said that by then the two countries should refrain from taking unilateral
steps or provoking incidents as agreed by their respective governments at a
meeting on the northern Croatian Adriatic islands of Brijuni. DC president Vesna
Skare Ozbolt, who also serves as minister of justice in the present Croatian
government, said that proclamation of an economic zone would mean nothing unless
a control and protection system was established.
Aerodrom Ljubljana posts stronger H1 revenues
According to figures reviewed by Aerodrom Ljubljana's supervisory board on
August 26th, the operator of the Ljubljana airport said its revenues surged 12
per cent to 2.79 billion tolars (11.65 million Euro) in the first half year over
the same period last year, Slovene press agency reported.
Pre-tax profit was level at 937 million tolars (3.91 million Euro), representing
41 per cent of the annual target. The investment amounted to 1.58 billion tolars
(6.60 million Euro) and was assigned chiefly for the completion of construction
projects launched at the beginning of 2004, the biggest being the multi-storey
car park. With the posted revenues representing 46 per cent of the annual
target, the company attributes poorer-than-expected results to seasonal effects.
During the months of January, February and March, the number of passengers was
at its lowest, while July, August and September were the peak months because of
increased charter flights. However, the airport posted a 16 per cent increase in
departures and 19 per cent rise in passenger numbers in the first half of the
year. On a negative note, cargo transport was down 12 per cent but this was in
accordance with expectations.
Ljubljana and Warsaw Linked by Direct Air Route
Slovenia's national carrier Adria Airways launched a new direct route between
Slovenia and Poland recently with four flights from Ljubljana to Warsaw every
Adria will fly to the Polish capital on Monday and Friday, while the Polish
national carrier LOT will fly from Warsaw on Wednesday and Sunday.
A return ticket will cost a minimum of 150 Euro, with the flight taking
approximately 90 minutes in one direction.
Adria's chairman Branko Luckovnik said that Adria passengers will now be able to
use the extensive LOT network, while Polish customers will be able to travel
more easily to the souteast of Europe.
The two companies established a link between the two capitals back in May 2004,
yet it involved a stop in Vienna. The direct connection will greatly reduce
travel time, with Adria expecting good occupancy rates.
FOREIGN ECONOMIC RELATIONS
Slovenia and China to improve economic ties
The largest business conference to date between Slovenian and Chinese business
representatives took place in Ljubljana on September 9th. Organised by the
Slovenian Chamber of Commerce and Industry (CCIS), the meeting aimed at
increasing the business cooperation between the two countries, STA News Agency
China with its rapid economic growth presents one of the most important markets,
said the chamber's Vice President, Cveto Stantic. He was also pleased that
Chinese government officials accompanied their business representatives,
allowing political as well as economic talks. China's Ambassador to Slovenia,
Wang Fuyuan, said the Chinese embassy will support all activities aimed at
improving the cooperation between Chinese and Slovenian companies.
The Chinese delegation, consisting of the representatives of the Chinese
ministry of commerce, finance ministry, the national council and the largest
Chinese companies, was led by the deputy head of the trade development bureau at
the commerce ministry, Jia Guoyong. Slovenia's exports to China totalled US$34.2
million in 2004 making the world's most populous country 35th on Slovenia's
export list. The imports, however, were at a much more significant US$289.3
million, which places China is 8th on the list of Slovenian import countries.
The main Slovenian exports to China include leather, paper, cardboard, household
equipment and medicines, while Slovenian imports consist mainly of computers and
computer equipment, receivers and television cameras.
Krka confident of future profit growth
Slovenian drug maker Krka recently announced its results for the first six
months of 2005. Revenues reached 65.9 billion tolars (275 million Euro), up 13
per cent on the year, Slovene press agency reported.
The company said it made a first-half net profit of 10.4 billion tolars (43.4
million Euro), up 31 per cent rise year-on-year.
Krka Chairman Joze Colaric said he was pleased with the results and was
confident the company would exceed the planned 112 billion tolars (467.44
million Euro) in revenues for the whole of the year adding that the net profit
will stand at around 20 billion tolars (83.5 million Euro). Colaric said the
group will continue to register growth in both revenues and profit next year -
around 13 per cent.
According to the chairman, Krka will continue to develop on its own and rely on
organic growth and takeovers instead of a foreign strategic partner. He
explained that the company registered 71 per cent sales growth in eastern
Europe, which made this the biggest market for Krka, accounting for 26 per cent
of all sales. Sales in central Europe were up 39 percent and this market
represented 24 per cent of all sales.
Slovenia was third in terms of market importance, accounting for 19 per cent of
all sales. According to him, only for the western European market did the
company see its sales fall by a third; the market made up only 17 per cent of
However, Colaric expects sales will improve in this region by the second half of
the year so that the overall sales will be the same as in 2004. Colaric also
stressed the growing importance of the Russian market for Krka, where the group
saw 68 per cent growth in sales.
Telekom Slovenije on course to develop new services
Shareholders of telco Telekom Slovenije recently decided to hand out almost half
of last year's profits, 7.96 billion tolars (33.2 million Euro), for dividends
at 1,223 tolars (5.1 Euro) per share.
After the general meeting, the head of the Telekom supervisory board, Miro
Rozman, said the priorities of the company would be the introduction of new
services, expansion to new markets and privatisation of the state's 62.5 per
cent stake in the company.
Meanwhile, chief executive, Libor Voncina, said Telekom's chief strategic
potentials remains in organisational transformation and streamlining, expansion
of the product range and geographical expansion. Voncina added that southeast
Europe is the main target of the expansion push but there are also other
opportunities such as Gibraltar Gibtelecom and Maltese Maltcom.
"These are small mobile operators which are entering 3G. They don't have
experience, and our subsidiary Mobitel is looked upon as a trailblazer in this
field with quite a lot of experience," Voncina explained. Telekom Slovenije,
together with its wireless division Mobitel, is expected to acquire a majority
stake in Malta's national telco Maltacom, the daily Delo reported recently.
Mobitel and Telekom are interested in the 400,000-million Maltese market chiefly
due to a growing mobile services market, on which Maltacom generates 30 per cent
of its sales revenues.
Maltacom group posted 127.5 million Euro in revenues in 2004, when its net
profit was 15.8 million Euro. According to Delo, Telekom Slovenije is expected
to submit by the end of August a non-binding bid for a 60 per cent stake which
has been put up for sale by the Maltese government. Telekom values the stake at
180 million Euro to 195 million Euro, New Europe reported.
If Telekom and Mobitel is unable to advance to the second stage of the
invitation to tender then it is possible that Mobitel will pair up with
telecommunications giant Cable and Wireless to enter talks in the second phase
of the tender, Delo said.
Meanwhile, Mobitel has entered into negotiations to buy a 50 per cent share of
Gibtelecom, the Gibraltar-based national telco. The stake is valued, according
to Delo's unofficial report, at 8.35 million Euro. Rozman was reluctant to talk
about the details, until concrete steps are made.
Voncina also revealed preliminary half-yearly results of the group: sales were
up 7 percent to 79.8 billion tolars (333.1million Euro), with net profit soaring
by 39 per cent to 11.8 billion tolars (49.3 million Euro). Shareholders expanded
the list of registered activities to include textile and sports equipment retail
and legal consultancy.