Slovenia Business Week no. 47, November 21, 2005
Table of Contents:
HEADLINES
Schefenacker Officially Launches Production in Slovenia
PM Jansa Believes Now is the Right Time for Reforms
Government Establishes Reform Coordination Office
INTERNATIONAL COOPERATION
Vizjak Says Slovenia May Adopt Harder Line on Croatia's EU Bid
Macedonian PM Pledged EU Support from Slovenia
Macedonia Invites Slovenian Investors
Macedonian PM and Finance Minister Discuss Euro
National Council President Discusses Economic Cooperation in Austria
EUROPEAN UNION
FM: Budget Framework Has 50-50 Chance to Be Adopted in 2005
Conference Says EU Must Embrace Globalisation
Economist Mrak Believes EU to Include Entire SE Europe by 2015
Vizjak: Slovenia Might Raise NEK Decomissioning in Croatian EU Talks
LEGISLATION
New Business Register Act to Simplify Registration Procedures
Social Partners Reach Deal on Collective Agreements Act
Government Aligns Provisions on Carbon Trading with EU Directive
STATISTICS/FORECASTS
Wages Down 0.6% in September
Unemployment at 10% in September
EU Keeps GDP and Inflation Forecast Unchanged for Slovenia
FINANCE
NKBM Sees 8% Rise in Gross Profit
Pensions to Increase by 1.7%
Government Establishes Two More Privatisation Groups
Finance Committee Concludes Debate on Tax Acts
NLB Takes Out EUR 360m Loan
KD Group Buys 20% Stake in Delo, Sells Mercator Stake
Ljubljana Stock Exchange
Foreign Exchange
REGIONAL INFORMATION
Mayors Have Mixed Feelings about Govt's Two Regions Proposal
BRANCH INFORMATION
Slovenian Broadcasting Will Go Digital in 2012
Vets Happy With Anti-Bird Flu Measures
Government Responds to EU Telecoms Warnings
Reactions to REACH Directive Mixed
Government Amends Trade Act to Restrict Sunday Shopping
COMPANIES
Lower Sava Starts Producing First Kilowatts of Power
KD Group to Sell Remaining Stake in Mercator
Mercator Chairman Ousted by the Supervisory Board
Mercator Doubles Profit in First Nine Months
Rogaska Avoids Bankruptcy
Slovenian Ski Resorts Expect Good Season
Volja Mobil Becomes First Mobile Virtual Network Operator
Retailer Merkur Posts Upbeat Results
Krka CEO Awarded by Business Daily
Krka Chief Executive Confident the Share Will Continue to Grow
Hardware Retailer Merkur Opens First Store in Serbia
Companies in NE Slovenia Push for Arrival of Ryanair
Mercator Says 500 Jobs to Go Because of Sunday Shopping Law
Lasko Says Jankovic Dismissal Legal and Legitimate
Report Suggests State's Presence in Companies Still Too Strong
Merkur Plans to Increase Sales at Home and Abroad, CEO Says
SLOVENIA IN BRIEF
Bosnia-Herzegovina Gives Demining Fund US$ 2.2m
Slovenia to Seek Renewed Arbitration on LB Debt
Drnovsek and Solyom Call for Affirmative Action for Minorities
Rupel Attends CoE Ministerial; Meets with Serbia-Montenegro FM
Government Sends Requested Info on Mercator Sale to the EU
Survey: Government Backers, Opponents Almost Tied
Competition Watchdog Stresses Role of Regulator in Telecommunications
Avgust Cernigoj's Yet Unseen Prints on Display in Lipica
HEADLINES
Schefenacker Officially Launches Production in Slovenia
SAPS, the Slovenian subsidiary of German auto-equipment maker Schefenacker a new factory on the premises of the defunct textile company Tekstilna tovarna Prebold in the northeast, which it purchased in March
SAPS, the Slovenian subsidiary of German auto-equipment maker Schefenacker, opened on Tuesday, 15 November a new factory on the premises of the defunct textile company Tekstilna tovarna Prebold in the northeast, which it purchased in March.
As SAPS director Robert Grah told the press, the investment is worth EUR 4.5m, and the same amount was needed for the equipment required to upgrade the former textile factory, which went bankrupt a year ago.
The number of employees in the new factory is to increase to 200 within a year, Grah said. The 47 former textile factory workers, who are already employed in SAPS, have been trained in Schefenacker's subsidiaries in Hungary and Germany.
According to Grah, Schefenacker group has decided to start production in Slovenia as expenses in the country are reasonable. He also added that the production is Prebold, which in fact started already on 1 September, is a profitable investment.
"After the company was forced to back out of plans to open the plant in Zagorje, it had to look for another suitable location. Schefenacker did not give up on Slovenia, although it was already considered looking for a location in Hungary," Grah explained.
He also announced the expansion of the company's production, the modernisation of the factory, and the possibility of building the fifth production hall in the near future.
PM Jansa Believes Now is the Right Time for Reforms
PM Janez Jansa told the National Council that the Slovenian economy is doing relatively well, however the time had come to give it more oxygen, thus allowing companies to start breathing with full lungs
PM Janez Jansa told the National Council on Wednesday, 16 November that the Slovenian economy is doing relatively well, however the time had come to give it more oxygen, thus allowing companies to start breathing with full lungs.
Jansa added that Slovenia must develop new programmes and create jobs with a future. Furthermore, it "has to do it now, and not wait for the favourable economic environment to turn".
Jansa, speaking at a session where the councillors are to debate the government reforms, named Germany as an example of a country which missed its opportunity to implement social and economic reforms in time.
Moreover, Slovenia is not the only country that is discussing reforms, Jansa continued. Beside 20 other countries which are debating similar issues, the EU's Lisbon Strategy also discusses possible answers to today's crucial EU problems, namely dwindling competitiveness and the effects of globalisation.
"Sustainable growth cannot be achieved without economic growth", added Jansa, explaining that reform-minded countries all consider steps that would "reduce the taxation of labour and increase taxes on consumption and wealth".
At the session, Damijan presented the framework of the social and economic reforms and stressed their urgency. He also pointed out the importance of tax reform, as labour is overly taxed.
He furthermore outlined the withdrawal of the state from the economy, and presented the reforms to the educational and pension system including the changes to social transfers.
Councillors in general agreed with him, but criticised the proposed flat tax. President of the employers interest group Jozko Cuk claimed that a flat tax would hurt several business sectors.
Farmers' representative Peter Vrisk agreed, saying that the flat tax will cause a loss of income to a significant part of Slovenia's population.
Culture and sports representative Tone Persak pointed out that flat tax would have a detrimental effect on culture and sport, while trade unionist Dusan Semolic called flat tax a "socially unacceptable approach".
Government Establishes Reform Coordination Office
The Office for the Coordination of the Implementation of Slovenia's Development Strategy is expected to start operating as of 2006
The government decided on Thursday, 17 November to establish an office that will coordinate the implementation of the planned structural reforms, to be headed by a minister without portfolio.
The Office for the Coordination of the Implementation of Slovenia's Development Strategy is expected to start operating as of 2006, according to government spokesperson Valentin Hajdinjak.
Hajdinjak said after the cabinet session that the Office would coordinate the implementation of the reforms by working closely with relevant ministries and government agencies.
The Office should have 15 employees in 2006 and 2007, with most of its members being transferred from other ministries. It will not require any additional budgetary expenses, he explained.
Hajdinjak said that "personnel issues have not yet been discussed", saying that the head of the office has to be first approved by coalition parties, and then put forward by PM Janez Jansa.
One of the most often mentioned candidates for the post is the head of the government reform committee Joze P. Damijan.
INTERNATIONAL COOPERATION
Vizjak Says Slovenia May Adopt Harder Line on Croatia's EU Bid
Economics Minister Andrej Vizjak has suggested that Slovenia may adopt a harder line to Croatia's efforts to join the EU in response to the arbitration motion that Croatia filed against Slovenia over undelivered electricity from the Nuclear Power Plant Krsko (NEK)
Economics Minister Andrej Vizjak has suggested that Slovenia may adopt a harder line to Croatia's efforts to join the EU in response to the arbitration motion that Croatia filed against Slovenia over undelivered electricity from the Nuclear Power Plant Krsko (NEK).
Speaking to the press on Monday, 14 November in Bostanj after the launch of the first turbine at the Hydro Plant Bostanj, Vizjak said that Croatia's claims regarding NEK are completely baseless.
The Slovenia side will put together its case, while one can expect a more firm response by Slovenia, including in regards to its backing for Croatia's bid to join the EU in the coming months, Vizjak said.
He added that Slovenia nevertheless intends to continue to be a partner of Croatia in its efforts to meet EU membership criteria.
His comments are in response to an announcement that Croatia has referred the case in which it seeks millions of euros in compensation from Slovenia for over a year of undelivered electricity from NEK to the International Centre for Settlement of Investment Disputes (ICSID) in Washington.
Croatian grid operator HEP filed for an arbitration procedure in early November at the ICSID over electricity that it says Slovenia failed to deliver from the jointly-owned NEK after the two countries signed an agreement on the plant in 2002.
Meanwhile, Vizjak pointed out that Croatia has still not met its obligations stemming from the agreement as it has not established a NEK decommissioning fund.
He reiterated his view that the two countries should solve the issue in bilateral talks.
Explaining its decision to seek arbitration, the Croatian Economics Ministry claimed in a press release on Monday, 14 November that the Slovenian "showed no interest in compensating HEP for the damage incurred".
Croatia had sent two offers to Slovenia for the amicable settlement of the issue, but the first offer was rejected and there was no reply for the second, the ministry said.
"Arbitration does not exclude the possibility for an agreement but only confirms HEP's intent to obtain compensation," it added.
Macedonian PM Pledged EU Support from Slovenia
Macedonian PM Vlado Buckovski received assurances of Slovenia's firm support for Macedonia's efforts to join the EU, as he held talks with senior Slovenian officials
Macedonian PM Vlado Buckovski received assurances of Slovenia's firm support for Macedonia's efforts to join the EU, as he held talks with senior Slovenian officials on Thursday, 17 November.
Prime Minister Janez Jansa said that Macedonia has made great headway over the recent years, and can serve as a role model regarding the coexistence of various ethnic groups.
Jansa was adamant that Macedonia would be confirmed as EU candidate country at the EU summit on 15 and 16 December, which would have a positive impact on the economy there.
Slovenia has helped Macedonia on its path towards the EU, and will continue to do so, Jansa told a joint press conference in Ljubljana.
Buckovski thanked Slovenia for the support, saying that Slovenia was "Macedonia's best friend in the EU. We will do everything to keep it that way."
Buckovski held talks earlier in the day with Parliament Speaker France Cukjati, who was quoted by the National Assembly as saying that when talks in Europe touch on Macedonia, "there is the general conviction that it is a country which can become a factor of stability in the Balkans, so it deserves even more to become a member of Euro-Atlantic organisations."
Talks with Slovenian officials, including President Janez Drnovsek, also touched on Kosovo. Buckovski is reported as having voiced support for President Janez Drnovsek's plan for the province, which he labelled as containing the essential elements for a permanent and just solution. Yet Buckovski also told the press later on that the status of Kosovo depends neither on Slovenia nor Macedonia. Kosovo must remain in the same borders as it is now, he stressed.
Drnovsek meanwhile said that the Ohrid Agreement, which ended fighting in Macedonia, is a good model for the broader region of how relations between ethnic groups can be constructively resolved, the president's office said in a press release.
As part of Buckovski's visit, Economics Minister Andrej Vizjak and Macedonian Deputy PM Minco Jordanov amended the agreement on economic cooperation.
PM Jansa believes that the amended document will facilitate bilateral economic cooperation. He said that Slovenia has great economic interest in Macedonia, not only in trade but also other forms of economic cooperation.
Macedonia Invites Slovenian Investors
A Slovenian-Macedonian business conference took place at the Chamber of Commerce and Industry of Slovenia
Macedonian Prime Minister Vlado Buckovski encouraged Slovenian companies to invest in Macedonia, which is currently undergoing structural reforms to cut red tape for foreign investors, at a Slovenian-Macedonian business conference on Friday, 18 November.
"The first results of a wide range of reforms have already become visible: we have also obtained positive evaluations from the International Monetary Fund (IMF) and the World Bank," Buckovski said, adding that bilateral cooperation should be strengthened.
Economics Minister Andrej Vizjak and president of Chamber of Commerce and Industry of Slovenia (CCIS) Jozko Cuk agreed that cooperation would be boosted by the amended economic cooperation accord signed on Thursday, 17 November by Buckovski and Vizjak to cut red tape.
Macedonia is one of the trade partners with the largest trade gap with Slovenia: Slovenia exported EUR 81m worth of goods in Macedonia in the first seven months, and imported EUR 17m.
Cuk explained Slovenia's export to Macedonia was falling slightly, also due to the expiry of the free trade agreement between the countries after Slovenia's EU entry. However, imports from Macedonia are rising, making the trade more balanced.
Slovenian investments to Macedonia have increased, reaching EUR 8m so far this year, Cuk said. The central bank said that the value of all Slovenian investments to the country so far amounted to EUR 90m.
"We are hoping for even more Slovenian investment next year and more contracts signed between Slovenian and Macedonian partners," Cuk underscored.
Buckovski said he expected Slovenia to become the main investor in Macedonia. According to him, energy and the restructuring of agriculture are the sectors that offer the best prospects.
Furthermore, Buckovski was pleased with the political relations between the countries, while Vizjak reiterated Slovenia was prepared to offer all technical and expert help in EU integration.
Macedonian PM and Finance Minister Discuss Euro
According to a press release from the Finance Ministry, Bajuk said that Macedonia considers Slovenia a strategic partner in its efforts to join the EU
Finance Minister Andrej Bajuk said on Friday, 18 November that he discussed Slovenia's plans to adopt the euro with visiting Macedonian Prime Minister Vlado Buckovski.
According to a press release from the Finance Ministry, Bajuk said that Macedonia considers Slovenia a strategic partner in its efforts to join the EU.
Earlier in the day, Buckovski attended talks between representatives of Slovenian and Macedonian companies at the Slovenian Chamber of Commerce and Industry.
Bajuk said that "no concrete agreements were reached at the talks as they are for the companies themselves to make", however, the state "is obliged to create an environment for such talks".
National Council President Discusses Economic Cooperation in Austria
Susnik said after the talks that Slovenian border regions and Carinthia could use their joint business potential to enter other markets
President of the National Council Janez Susnik held talks on Friday, 18 November with business people in the Austrian province of Carinthia, with the focus being on improving economic cooperation between Slovenia and Austria.
Susnik said after the talks that Slovenian border regions and Carinthia could use their joint business potential to enter other markets, with the Slovenian minority standing to benefit from such cooperation. The Slovenian official met with both Austrian business officials and Slovenian minority entrepreneurs.
Susnik, visiting Austria at the invitation of Peter Mitterer, president of the Austrian Federal Council, also called on Austria to respect all minority rights as stated in the the Austrian State Treaty as well as strive to solve other minority issues.
The Slovenian official and an accompanying delegation of businessmen also attended the opening of a fair on family, health and national customs, which was launched in Carinthia's capital Klagenfurt.
In the afternoon, Susnik met representatives of Slovenian business and political groups in the region, before wrapping up his visit with talks with Austrian business people.