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SLOVENIA


 

 

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)

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Update No: 120 - (30/05/07)

Jansa and Rupel Express Condolences to Croatia 
In the old days of the USSR Kremlinologists had little in the way of public information to go on. They had to interpret the minutiae of public behaviour by the apparatchiks for deeper meanings.

Slovenia lives in a better world and in the full glare of world publicity these days. Nevertheless, a bit of Kremlinology may not be amiss now and then. Slovenian Prime Minister Janez Jansa and Foreign Affairs Minister Dimitrij Rupel expressed their condolences on April 29th anent the death of former Croatian Prime Minister Ivica Racan.

The significant thing is that they did so at the same time, whereas earlier, Slovenian President Janez Drnovsek had forwarded his condolences separately. The Slovenian premier and president see eye to eye in nothing. They both want to be in charge of foreign policy. The premier wants to do so with Rupel, his subordinate, not Drnovsek, his titular superior. 

The death of Ivica Racan incidentally was covered by the Slovenian and Croatian media in great detail themselves: thus the leading Delo daily states that he "acted calmly, rationally and pragmatically as a politician, and the Croatian political scene will not be the same without him." It added the Slovenian public will remember him most for following Slovenian communists and leaving the final SKJ (League of Communists of Yugoslavia) congress, but also for the unsuccessful agreement "Drnovsek-Racan".

Bitter power struggle continues
There is no doubt that the two leading politicians in Slovenia cordially detest each other. The prime minister and president of European Union member Slovenia, Janez Jansa and President Janez Drnovsek, have only their Christian names in common. 

They are locked in a bitter struggle for control of the country that neither is doing the least to hide. If Jansa publicly directs Drnovsek not to interfere in foreign policy, Drnovsek responds by antagonising the government with solitary personnel decisions. 

Drnovsek recently called Jansa 'the chief of evil, to whom nothing is sacred - not the state, not morality!' He is not alone in this. One respondent to a query about the premier replied: "Yes, Jansa is very disappointing to us all. I didn't vote for him, but he has proven to be a very arrogant and out of touch politician. He has definitely lost his edge, voters will no doubt show this in 2008! To the polls!"

Central banker casualty of the duel
The latest victim in their bizarre tug of war was central bank governor Mitja Gaspari, held in high esteem at home and abroad. Head of the Banka Slovenije for the past six years, Gaspari oversaw Slovenia's adoption of the common European currency at the start of this year and is universally known as Mr Euro. 
Forgoing the usual consultations with parliament and the government, Drnovsek nominated Gaspari for another term. Lawmakers amazingly rejected him. 

Before the parliamentary vote, an internal central bank report to the European Central Bank was made public. The document painted a possible nightmare scenario for Slovenia's budgetary policy in 2010. Although Gaspari said that it was merely a normal worst-case projection, Slovenian nationalists, among others, cried 'treason,' sealing the fate of the once highly praised banker.

Drnovsek was unfazed. Now 56, he had a bout with cancer two years ago that left him ill-disposed to traditional medicine and drawn to Buddhism, veganism and all manner of theoretical models explaining the meaning of life. He nominated Andrej Rant, Gaspari's deputy and confidant, to head the central bank. 

But lawmakers rejected Rant too. After this debacle, no one can say when Slovenia's top financial institution will have a leader again. 

The opposing camps then poured more oil on the fire. Jansa, whose intense rivalry with former longtime prime minister Drnovsek began when he was opposition leader in 1994, had parliament look into the president's allegedly dubious bank dealings. 

Drnovsek responded in kind, accusing Jansa of aiming to control the privatisation of Slovenian banks with the help of a complaisant central bank chief. 

The president might stand again
The president, who remains popular in spite of everything, has another arrow in his quiver for Jansa, whose party has lost voter support: Drnovsek let it be known that he might reconsider his decision not to seek re-election in presidential polls this autumn. 

CCIS Says Economy Can't Remain Competitive Without Reform
meanwhile, business goes on. The Chamber of Commerce and Industry of Slovenia (CCIS) has reiterated its view that Slovenia cannot remain competitive in the long term without structural changes, foremost liberalisation of the business environment. Interim CCIS president Samo Hribar Milic told a press conference on 19 April that Slovenia's economy might be well-positioned at the moment, but the outlook for the future was less rosy without changes. Data shows that Slovenia lags behind other countries in terms of high technology products, the creation of companies and the retention of jobs, which does not bode well for its competitiveness, Hribar Milic said. 

In his opinion, Slovenia must implement structural reforms if it wishes to realise its goal of catching up with the most developed countries in the world. The measures should include deregulation of the economy, cutting of red tape and the promotion of knowledge from research institutions to business, said Hribar Milic, who also specifically pointed to the need for more flexible labour laws. 

According to him, the current labour laws bring no flexibility, while talks on the changes have not made headway because of what he claims to be the stubbornness of the trade unions. 

The CCIS also presented its economic forecasts, which predict that economic growth will stand at 4.6% this year and 4.3% the next. 

While growth stood at 5.2% in 2006, it did so on account of extensive growth in fixed capital formations. Expansion in this field is expected to slow down somewhat this year, which will result in slightly less intense economic growth. 

Head of the CCIS economic trends department Irena Rostan explained that this year's growth was expected to beat initial estimates because of the favourable trends in the beginning of the year, including that brought on by the adoption of the euro and the warm winter. 

Meanwhile, chief CCIS social talks negotiator Joze Smole said Slovenia still needed to cut red tape, as the process of establishing a company took about twice as long (around 60 days) as elsewhere in the region. Moreover, Smole said the rigidity of labour legislation was another burning problem, as manifested by Slovenia's ranking of 146th of 175 on the World Bank's indicator of labour market rigidity. 

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AUTOMOBILES

Renault starts building new Twingo mini in Novo Mesto


Production of the new Twingo mini has started alongside Clio II assembly at Renault's Novo Mesto plant in Slovenia, following investment of 400 million Euro, Auto Industry recently reported. 
To manufacture the new model alongside Clio II, 700 people were hired, taking the workforce to nearly 3,000. All the assembly operators were trained for an average of 70 hours on how to assemble the new vehicle. Running on three shifts from May, the plant's maximum output capacity is 210,000 vehicles a year, Twingo and Clio II combined. Renault was cited as saying that profitability targets for the Twingo project have been met notably through the use of carry-over; part of the running gear of the Clio II was used for the new Twingo, cutting outlay on the new car by about 25 per cent compared to the Clio III. The new Twingo goes to market on June 15th in France, Italy and Slovenia and in September for the rest of Europe, including, unlike the first Twingo, the UK in right-hand drive.

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FOOD & DRINK

Delta owner acquires 2.55% of Kras meat processing company

Owner of Serbia's largest Delta Holding Company, Miroslav Miskovic, has acquired 2.55 per cent of shares in Slovenia's Kras meat processing company through an intermediary for 1.3 million Euro, Serbia & Montenegro Today reported. 
Miskovic had tried to buy a sizeable parcel of Kras shares, but the management of Vinakras Company, which owns the meat processing company, prevented small shareholders from selling to Miskovic. So far, Miskovic has tried and failed to buy a plot of land in Ljubljana to build a store and to buy into Mercator trade chain, it was reported.

Pivovarna Lasko acquires outstanding shares in Delo

Beverage group Pivovarna Lasko announced it has acquired around 50 per cent of the outstanding shares of publisher Delo, increasing its stake to 94.09 per cent, Slovene Press Agency reported. 
Lasko launched its bid for Delo on April 2nd. Lasko and its controlled companies Radenska and Talis acquired 333,306 shares (49.94 per cent) of Delo during the takeover bid, paying 135.50 Euro per share. The group previously owned 294,738 shares of Delo, the company publishing Slovenia's leading broadsheet. In line with an agreement between the three companies, brewer Pivovarna Lasko was given ownership over all the newly acquired shares, it was reported. Pivovarna Lasko now owns 500,096 shares of Delo (74.92 per cent); Radenska has 127,928 shares (19.17 per cent), while Talis has 20 shares, 0.003 per cent of Delo. The companies labelled the bid a success in their press release. However, the group does not have any long-term interest in Delo. Editors-in-chief of two of the leading Slovenian dailies also had comments: Dnevnik's Miran Lesjak believes it is good that the state-run funds withdraw from the media, however the question remaining is what Pivovarna Lasko plans to do with its stake in Delo; Economist Matej Tomazin, on the other hand, said that the development was good news as it would enable Pivovarna Lasko to exclude small shareholders, get Delo off the stock exchange and take decisions that had been opposed by previous shareholders, it was reported.

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RETAIL

Clothes Retailer C&A Plans to Enter Slovenia in Autumn 

The German retail clothes chain C&A plans to open branches in four Slovenian cities. The first store is scheduled to open in the NE city of Maribor on 30th August, New Europe reported.
According to the company, the second store will open on 1 September in the eastern city of Celje, followed by one in the northern town of Kranj in November, while the first branch in Ljubljana is to open in spring next year. 
Ljubljana will also be the headquarters of the company's Slovenian subsidiary. 
C&A also plans to open a store in the western town of Nova Gorica and another in Ljubljana in the spring of 2008. 
The company wants to open stores in all major Slovenian towns in the next three years. C&A expects to employ 60 people by the end of this year. 
According to the company's website, C&A manages 1,111 stores in 15 European countries. It has recently expanded to Slovakia and China.

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TELECOMMUNICATIONS

Telekom Slovenije acquires Gibtelecom stake for 36.8 mln Euro

Slovenia's Telekom Slovenije has acquired a 50 per cent stake in its Gibraltar counterpart Gibtelecom for 36.8 million Euro, Slovene Press Agency reported on April 24th, cited by Reporter.gr. 
Telekom Slovenije bought the stake from the US telecommunications company Verizon International following the successful completion of years-long negotiations, it was reported. The contract on the acquisition of the 50 per cent stake was signed with the consent of the government of Gibraltar, which owns the other half of Gibtelcom.

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