Books on Slovenia
% of GDP
Update No: 105 - (30/01/06)
The meritocrats of the Alpine redoubts
The Slovenes feel themselves to be, if not the aristocrats, certainly the
meritocrats, of the former socialist nations. They are by far the best off of
them. They have the best location, right in the heart of Europe. They are
supremely well educated by international standards, multilingual,
multidisciplinary, indeed multidirectional all round, versed in the skills of
the internet and the modern world and free of prejudices against new ideas.
They have been a little vexed of late that remote Estonia has stolen a march on
them by initiating the flat tax, a bold idea put forward by the US entrepreneur
and thinker, Stephen Forbes. It was too bold even for the Germans to contemplate
at their last election. Angela Merkel perhaps failed to achieve an outright
majority because she had an aide vociferously advocating the flat tax.
The Slovenes have bitten the bullet. They are giving the matter serious
Strategic Council Recommends Flat Tax Rate of 20%
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
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
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.
Jansa Believes Pace of EU Presidency Preparations Is Adequate
Slovenia is to have the presidency of the EU in 2008. PM Janez Jansa believes
that if compared with other states which were to take on the 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 on Wednesday, 4th January.
He stressed that alongside the implementation of economic and social reforms,
the preparations for 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 experience.
FM Dimitrij Rupel, on the other hand, stressed that the country's successful
OSCE chairmanship was a good test of state and international credibility and
capability ahead of EU presidency.
Rupel moreover said that the experience gained during the OSCE chairmanship was
a solid basis for leading the EU. Preparing the contents of Slovenia's EU
presidency will be one of the priority tasks of the Foreign Ministry, he added.
According to Rupel, the Western Balkans and neighbourhood policy are the most
likely issues on which Slovenia would focus as EU chair-in-office. Slovenia also
intends to give priority to the role of the EU as global player, inter-civilisational
dialogue, energy and regions.
In their respective addresses, both Jansa and Rupel touched also on current
foreign policy issues, which are also on the agenda of the two-day meeting of
According to the prime minister, there was no essential progress regarding
Slovenia's relations with Croatia in 2005, although Ljubljana did show its
readies for a fresh start with Zagreb.
After a promising start in the first half of 2005, Croatia took an
"unreasonable" step by entering bilateral talks with Italy on the
division of the continental shelf in the Adriatic, Jansa said.
"This act was fatal," Jansa stressed. He however believes that
Croatia's EU accession talks have opened a new field for settling the relations
Meanwhile, Rupel stressed that Croatia should understand that its negative
policy toward Slovenia influences public opinion, and this could also affect
Slovenia's decisions in Brussels.
He is convinced that the two countries should agree on and respect certain
common principles. Slovenia will continue to support Croatia's EU and NATO
accessions, Rupel said, adding that he expected Croatia to act in line with EU
and NATO standards.
The foreign minister also pointed to the need for "the country to speak
with one voice" in foreign policy, which is defined by the government and
parliament. Moreover, diplomats are obliged to represent Slovenia's official
Furthermore, Rupel believes the diplomats should bring Slovenia's official
standpoints closer to the public, especially in the countries with which
Slovenia still has some unresolved issues.
Ljubljana Airport signs up budget carrier Wizz Air
Competition on routes from Ljubljana to London and Brussels is about to get
fiercer, as Wizz Air, the biggest no-frills carrier in Central and Eastern
Europe, will start operating scheduled flights on the routes in May, New Europe
This is a landmark step in the airport's plans to double the number of
passengers, Vinko Moze, the chairman of airport operator Aerodrom Ljubljana,
Wizz Air is the ninth airline operating scheduled flights to and from Ljubljana
Airport, and the second budget carrier after Easyjet.
"We want to create opportunities to allow Slovenians to travel at budget
prices," Wizz Air director, Jozsef Varadi, said.
He is convinced the airline will help boost tourist numbers in Slovenia and
indirectly increase the number of jobs around the airport.
Moze agreed, saying that "flight guests are especially welcome, as they are
the biggest spenders" among tourists.
The joint decision to have Wizz Air fly to Brussels's Charleroi airport was
taken after it was established that "we are short on Benelux,"
according to Zmago Skobir, Aerodrom Ljubljana board member.
Meanwhile London, which is already served by Slovenian flag carrier, Adria
Airways, and budget carrier, Easyjet, is an "insatiable market," he
said. Wizz Air will thus fly to Luton Airport four times a week.
For Wizz Air, this is just the beginning of cooperation with Ljubljana Airport.
Talks are underway on routes to Italy, Spain and Scandinavia, according to
The young airline, established in May 2004, plans to become the biggest budget
carrier in Slovenia, a position it has already achieved in Poland and Hungary.
In the initial promotion period, tickets to London and Brussels will cost 28
euros with taxes.
Slovenia receives 59.37m Euro aid in 2005
Slovenia received 59.37 million Euro from four cohesion funds in 2005, New
Europe reported, citing data released by the European Commission.
At the end of 2005, new EU member states were reimbursed expenses as the ones
paid to old member states in 2001. The Commission has on average re-paid 20 per
cent of all cohesion funds to the new members for the 2004-2006 period.
EBRD President Jean Lemierre's visit to Slovenia
The President of the European Bank for Reconstruction and Development (EBRD),
Jean Lemierre, visited Slovenia recently. With Prime minister, Janezz Jansa, and
the Minister of Finance, Andrej Bajuk, he discussed Slovenia's preparations for
the adoption of the Euro and the engagement of EBRD in the privatisation of some
state-owned companies. According to the Bajuk, the talks with the EBRD President
were very successful, Sinfo reported.
According to Bajuk the government is currently considering the proposals of
groups preparing plans for the privatisation of the top two Slovenian banks NLB
and Nova Kreditna banka Maribor, the national telco Telekom Slovenje, and the
"The Prime Minister assured Lemierre that the government would decide on
the proposals of privatisation groups within 45 days, ie 6 weeks," said
Bajuk. Leierre would not reveal how much the EBRD is prepared to invest in
Slovenia, "but the numbers are very high." It is not only a question
of money, but also the timing, experience and encouragement of other investors,
domestic and foreign, he added. The EBRD President also concluded that it was
time for further cooperation with Slovenia. He congratulated Slovenia on its
achievements. "What has been achieved in the past years is very
impressive," he said.
SiOL.net buys Thomson softswitches
Thomson said recently it has been awarded contracts by Slovenia's SiOL.net
and Croatia's Iskon Internet to provide softswitches for the upgrade of their
respective internet services, New Europe reported.
Thomson said SiOL.net, a unit of Telekom Slovenije, will use the softswitches to
support the delivery of voice over internet protocol (VoIP)services, while Ikson
will use them for the installation of broadband telephony services to its
customers. The value of the contracts was not disclosed.
Telekom Slovenije not to buy Maltacom
The management board of Telekom Slovenije has informed the company's supervisors
that it will not submit a binding bid for a 60 per cent stake in Malta's
national telco Maltacom, due to business risks, Telekom Slovenije said. Several
media outlets reported that Telekom's supervisors were expected to discuss the
decision to purchase the majority stake in Maltacom, which has been put up for
sale by the Maltese government. However, they did not meet in the end, the
company said. The supervisory board of Telekom gave the management a go-ahead in
August 2005 to file a non-binding bid for Maltacom's majority share, which was
estimated at 180 million Euro to 195 million Euro. The company's main goal is
expanding its operations in SE Europe, where it recently failed in its bid to
purchase the Montenegrin telco, New Europe reported.
Commissioner Barrot Urges Action on Sea Motorways
Two years after the decision on establishing sea motorways within the
trans-European transport network (TEN-T), the time has come to take concrete
steps, European Transport Commissioner, Jacques Barrot, told the participants of
the first conference on sea motorways in Ljubljana, New Europe reported.
"The Commission commissioned feasibility studies on sea motorways in 2005
and 2006 and allocated funds for their construction in the 2007-2013 EU
budget," Barrot said.
"The Commission sees great potential in sea motorways," he added.
Moreover, with the land transports set to increase by 70% by 2020, appropriate
sea motorways will be able to take the bulk of cargo off land transport routes,
thereby also helping towards Kyoto obligations, he explained.
Meanwhile PM, Janez Jansa, told the meeting that Slovenia has joined the concept
of intermodal transport as well, with the country's national transport strategy
emphasising water and rail transports.
However, if the Commission wants sea motorways to be successful, it has to work
towards better connectability between ports, railway hubs and inland ports,
Jansa pointed out.
Slovenian Transport Minister, Janez Bozic, called for cautious implementation of
sea motorways, pointing out the need to be careful in choosing sea ports,
ensuring suitable transport links between ports and land transport routes, and
simplifying administrative procedures.