Business

13 Dec 2018, 14:25 PM

STA, 13 December 2018 - The government raised on Thursday the daily allowance for self-employed artists on sick leave from 20 euro in 2018 to 21 euro, or 630 euro for 30 days, in 2019.

The government issued a decree setting the sick leave allowance for next year based on the law on the implementation of public interest in culture, the umbrella law for arts and culture.

The allowance is part of efforts by the Culture Ministry to improve freelancers' working conditions and financial standing, the Government Communication Office said in a press release after the government's weekly session.

NGOs representing freelance artists have been warning that more than half of self-employed artists do not earn the minimum wage, currently at 638 euro net.

Meanwhile, the poverty threshold in Slovenia was set at 636 euro a month in 2017, slightly up from the previous years.

Today's increase comes after the daily sick leave allowance stood at 20 euro in the 2014-2018 period, which translated into 600 euro for 30 days of sick leave.

The NGOs have been pointing out this is below the minimum wage, but under Slovenian law, sick leave compensation for the loss of income is set at 80% of the salary.

In determining the amount of the sick leave allowance, the government took into account the available budgetary funds and the poverty threshold.

11 Dec 2018, 12:00 PM

STA, 10 December 2018 - Slovenia exported EUR 2.88bn worth of goods in October, 10.5% more than in the same month a year ago. Merchandise imports rose by 19.2% to EUR 2.94bn, creating a trade deficit of EUR 59.3m.

Releasing fresh figures on Monday, the Statistics Office said the recorded values of exports and imports in October were the highest this year as well as in recent years.

The export-import ratio stood at 98%. The EUR 59.3m deficit was mostly due to increased imports from non-EU countries.

Almost 80% of Slovenia's merchandise trade was generated in the EU market; 78% of exports and 76.5% of imports.

Exports to EU member states rose by 12.5% year-on-year to EUR 2.25bn and imports from there increased by 13% to EUR 2.25bn, with a trade deficit of EUR 1.5m.

Exports to non-EU markets rose by 3.9% year-on-year to EUR 634.6m, whereas imports soared by 44.7% to EUR 692.3m, opening a deficit of EUR 57.8m.

In the first ten months of the year Slovenia's exports grew at an annual rate of 9.8% to EUR 25.8bn and imports increased by 11.7% to EUR 25.4bn.

External trade surplus in the ten month period amounted to EUR 390.1m and the export/import ratio was 101.5%.

The data and trends indicate that foreign trade's contribution to Slovenia's economic growth is set to decrease, with domestic components contributing more.

Industrial output keeps rising

STA, 10 December 2018 - Slovenia's industrial output in October was 2.5% above the September figure and 4% higher year-on-year, while in the first ten months of the year industry expanded by 6% year-on-year, fresh statistics show.

Between January and the end of October manufacturing output expanded by 6.5%; electricity, gas and steam supply industries recorded a 1.9% growth and mining and quarrying a 0.4% growth.

A report by the Statistics Office also shows growth in production regardless of technological complexity; output of high-tech goods increased the most, at the annual rate of 6.6%.

Capital goods production expanded by 13.6%, output of consumer goods grew by 3.7% and production of intermediate goods increased by 3.8% in the ten months of the year compared with the same period last year.

In October alone output increased the most in manufacturing, by 2.6% from the month before and by 4.4% year on year.

Production in electricity, gas and steam supply rose by 2% from the month before, but fell by 0.3% year-on-year, while mining and quarrying put out 3.2% less than a month ago and 13.1% more year-on-year.

Industrial turnover was 2.8% higher than the month before and 2.3% higher than in October 2017. The value of stocks of finished and unfinished products rose by 1.2% from September by 11.2% year-on-year.

10 Dec 2018, 12:00 PM

STA, 8 December 2018 - More than one billion passengers travelled by air in the EU last year, which is 7.3% more than the year before and 39% more than in 2009. The highest growth was recorded in Slovenia, where the number of passengers rose by 19.8% to 1.682 million, latest Eurostat data show.

Slovenia was followed by Luxembourg, Estonia, Bulgaria and the Czech Republic.

The Ljubljana Jože Pučnik Airport was listed as the 150th busiest airport with 1.682 million passengers, mostly travelling within the EU.

The busiest airport in the EU was London's Heathrow with 78 million passengers, followed by Paris's Charles de Gaulle with 69 million and Amsterdam's Schiphol with 68 million.

The UK recorded the highest number of passengers (265 million), followed by Germany (212 million) and Spain (210 million). Some 47% of the passengers flew within the EU and one in five passengers travelled within their own country.

A PDF of the report can be found here, while an interactive version of the full dataset it here

08 Dec 2018, 13:52 PM

December 8, 2018

The drama over Petišovci gas extraction permits and the British company Ascent Resources appears to be one of those classic tales of a conflict between one country’s sovereign right over its environmental protection standards and the profit-making interests of the international capital, backed by neoclassical economics’ arguments on the beneficial effects of any foreign direct investment on the local economies.

However, this textbook ideological conflict was given another spin by an army of internet trolls, who sent a series of harassing messages to Slovenian government officials, including the Minister of Environment, which resulted in strengthening the Minister’s police protection and an internal investigation into the procedures surrounding the issue of environmental permits by the Ministry’s environmental agency (ARSO). With the British Ambassador also involved in lobbying for the British firm, three Slovenian political parties have also demanded that her involvement be investigated.

The issue centres on fracking in Slovenia

Gas has been extracted at Petišovci, North East Slovenia, since the 1960s, first by state-owned enterprises, then in 2002 the concession was granted to Geoenergo d.o.o. whose equal shareholders are two state-owned firms, Petrol and Nafta Lendava. Initially, gas was being extracted under its own pressure, until, according to Gorazd Marinček, eco activist, the problematic method of hydraulic fracturing, or “fracking”, was introduced in two wells around the year 2011.

At least since 2011, Geoenergo has been in a 25/75 Joint Venture Agreement with the Maltese firm Ascent Slovenia Limited, a subsidiary of a London based company Ascent Resources (established in 2004). Another subsidiary of Ascent Resources, Ascent Resources d.o.o. is also located at the same address in Lendava. According to a recent edition of RTV Slovenia’s Tarča (Target) the only income of the Ascent Resources comes from unrefined gas extraction from the two remaining operating wells in Petišovci. The chain of companies, according to Tarča, reported a loss of over EUR 2.5 million last year, while awaiting the ARSO environmental permit that would allow it to deepen the wells and boost production, as well as to “build a processing plant to treat the gas for injection into the Slovenian national gas network achieving the highest possible price” (source).

The joint venture applied for and also received the environmental permits in 2014. However, environmental NGO’s appealed to the Ministry of Environment, although their appeal was rejected, so they moved further to the administrative court, which confirmed procedural inconsistencies in the permit issuing process and returned the matter back to the starting point at ARSO. The process was repeated again with an appealed to the Ministry, then the administrative court, which rejected the appeal, so that the process in this second round has not yet been cancelled.

Pressure from British investors, and irregularities in the permit process

Meanwhile, the British side of the venture has been growing increasingly impatient. On February 15 2018, the CEO of the Ascent Resources, Colin Hutchinson, visited then Slovenian Prime Minister Miro Cerar, and on July 4th representatives of the company met with the Economic Minster. However, in August, when the old government was leaving and new one hadn’t taken over yet, a meeting was arranged at the initiative of the British-Slovenian Chamber of Commerce. The invitations to all parties were dispatched by the Ministry's directorate, and, most problematically, the meeting was eventually attended by Nataša Petrovič, the director of the Environment and Nature Protection Office in charge of ARSO’s environmental permits.

Apparently, at this meeting, which, according to the Ministry was only of informative nature, promises were made to the Ascent Resources (AR) that the environmental permit would be ready before the end of September, which is what AR then announced to investors. At the end of October, however, the new Environmental Minister, Jure Leben, introduced an internal investigation into the possibility of any external pressures being exercised over the ministry’s officials in the process of issuing environmental permits. The investigation eventually confirmed irregularities in these procedures, which included the August meeting of Nataša Petrovič with the AR representatives. As Tarča reported: “the Office director has participated in the meeting and provided information on specific procedures, thereby raising doubts as to the autonomy and independence of the Office, and allowing public interpretations, harmful for the reputation of the Office and its officials.” Furthermore, no minutes of this August meeting exist nor has the lobbying contact been reported to the Corruption Prevention Commission.

Threats of legal action accompanied by hate mail

Also at the end of October, AR announced it would explore taking Slovenia to the EU Court after the company failed in its attempts to get a response from the Environment Agency on Jure Leben’s internal inquiry into the awarding of environmental permits.

Furthermore, the number of offensive messages sent to ARSO, presumably by enraged British shareholders, multiplied and also hit Minister Leben’s mailbox and Twitter account. The minister is currently under enhanced police protection while a criminal investigation into the source of messages is taking place.

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Insulting comments by what appear to be fake Facebook accounts even managed to find their way to our own website, trying to stir the fight under an article on the matter. Luckily, nobody took the bait.

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Let’s not forget that in America in 2016 “Russian actors organized both anti-Islam and pro-Islam protests in the same location at the same time on May 21, 2016, using separate Facebook pages operated from a so-called troll farm in St. Petersburg”. The whole mission costed about US $200. (Source)

The British Embassy connection

To complicate the situation a bit further, on November 13 the British Ambassador to Slovenia, Sophie Honey, paid a visit to the Environmental Minister Jure Leben, asking questions about the possible deadlines for environmental permits and also about the results of the internal investigation. HMA Honey appears to have been advocating for the Petišovci project at least since January 2017, when she visited the site of the project and met with the Slovenian and British partners.

At about the same time three extra-parliamentary parties, Solidarity, Pirates and the United Left, asked for an ethical assessment of the British Ambassador’s conduct, who they believed lobbied the previous government to accelerate the license award process.

As reported by Delo, the British Embassy in Ljubljana denied the allegations, and explained that HMA Sophie Honey did not in any way want to influence the Slovenian decision, but only highlighted the need for predictable deadlines in procedures for foreign investors, including for AR, with this being an important part of achieving the goals of increasing bilateral trade and investment between the states.

Furthermore the tree political parties stated that they saw AR’s attempt to take Slovenia to the EU Court, to overrule the Slovenian system, as a kind of threat, even if no other pressures were being applied.

Let’s not forget that the confidence of Slovenia’s environmental administration in dealing with pressures from foreign capital rose significantly just last month, when the French multinational Lafarge sued Slovenia over being denied a renewed environmental permit after years of burning banned petroleum coke in its cement plant in Trbovlje. Lafarge finally lost its case at the Slovenian Administrative court, and is currently shutting down its operations in Slovenia.

06 Dec 2018, 18:00 PM

STA, 6 December 2018 - The number of workers from abroad rose by 18.8% to 86,014 between end of September 2017 and end of September this year, with former Yugoslav countries representing the main workforce pool for Slovenian companies, data from the Statistics Office shows.

According to the Statistics Office, nearly half of foreign workers in Slovenia come from Bosnia-Herzegovina (41,832). They are followed by those from Serbia (10,451) and Croatia (7,316).

However, the inflow of workforce in percentage increased the most from Kosovo, by 27% to 6,930, compared to 24.5% rise in workers from Serbia, a 21.4% rise in workers from Bosnia and an 18.9% increase in workers from Croatia.

Workers from Croatia got free access to the Slovenian labour market under EU rules in July as a consequence of the election-related political hiatus, and Slovenia has accords designed to improve workers' legal standing with Bosnia and Serbia.

The accord with Bosnia has been in force for some time now, while the one with Serbia was only signed in early November, so it has not affected the data yet.

Despite having no such deals, Slovenia is a destination of choice for workers from other former Yugoslav countries as well, including for those from Macedonia, whose number increased by 15.8% to 5,914 by the end of September.

05 Dec 2018, 11:52 AM

STA, 3 December 2018 - In a bid to address future challenges in business, the government plans to upgrade the national asset management strategy next year to make Slovenian Sovereign Holding (SSH) the driver of economic development in individual industries and companies, according to Finance Ministry State Secretary Metod Dragonja.

 

The announcement came as SSH held its annual conference on Monday, with Dragonja pointing out that it was time to adapt the strategy, "after we've managed to form a consistent governance framework in recent years".

The state asset custodian will now gradually complete its denationalisation obligations assumed when it absorbed the Slovenian Restitution Fund (SOD) in 2014 and incorporate the Bank Asset Management Company, Slovenia's bad bank, in 2020 and 2021.

A new approach to the development of specific industries and firms

"Our vision is to make SSH capable of taking on an active role in encouraging economic development in Slovenia and become the driver of development in individual industries and companies. The new asset management strategy will be drafted with this in mind," Dragonja said.

SSH has provided the Finance Ministry with its recommendations for improvements, but now everything is in the hands of the government and the National Assembly, SSH head Lidija Glavina told the press on the sidelines of the conference.

According to the SSH management, the strategy will have to be tweaked in terms of goals and success indicators, and classifications of assets should be adjusted.

Currently, a major goal set down in the strategy is return on equity (ROE), which was to hit 7.1% in 2017 and is to stand at 8% in 2020.

SSH's ROE for 2017 stood at 6.5% last year, which is the highest yet but still below plans, which the management of SSH attributes to the rising share of important and strategic assets in its portfolio. Such companies have other priorities than creating ROE, the management pointed out.

Tourism and finance are easier than energy and transport

According to Glavina, the 8% goal in ROE is attainable in finance and tourism and economy, but it will be hard to hit 8% in energy and transport, which have the highest share of strategic assets.

Meanwhile, Dragonja pointed out that SSH will have its hands full in tourism, as the strategy for sustainable development of tourism envisages consolidation and restructuring efforts in the branch.

The state secretary also listed some of the future tasks for the state in corporate governance, including the transformation of pension fund KAD into a demographic reserve fund and a clear definition of its mission, investment strategies and goals.

Additionally, the changes to the 2019 budget implementation law bring provisions that will put state-owned companies that are not managed by SSH on the same foundations.

As regards SSH itself, 2019 will be marked by continued efforts to sell the remainder of NLB to up to 25% minus one share, and efforts to sell Abanka, with Glavina saying that the bank would be sold before the deadline expires in mid-2019.

04 Dec 2018, 14:20 PM

STA, 3 December 2018 - Yaskawa's emerging plant in Kočevje, which was visited by Economy Minister Zdravko Počivalšek, Japanese Ambassador Masaharu Yoshida and the boss of the Slovenian subsidiary of the Japanese robotics group Hubert Kosler on Monday, will start test runs in January and become fully operational in the second half of next year.

 

Yaskawa is expected to obtain the operating permit for the plant, where seven types of robots will be manufactured, this month and launch test production in January.

So far the company has employed 30 people, but the number is to grow to between 60 and 70 by March and to 120-150 by March 2020.

The EUR 24.6m investment is then to start operating at full capacity in the second half of the coming year, with the production expected to reach 6,000 robots a year. By 2023 the headcount is to reach around 200.

Economy Minister Počivalšek sees this as a confirmation of Slovenia's status as "an excellent investment location", while Yaskawa's investment will also make the country an important regional player in robotics.

In addition to the plant, the Japanese group plans to establish an R&D centre to strengthen and upgrade cooperation with faculties and institutes including the Faculty Of Mechanical Engineering, Faculty of Electrical Engineering and the Jožef Stefan Institute.

Počivalšek also pointed out that this plant was a good initiation for another Yaskawa investment planned in Slovenia, a plant that would produce motors, servo regulators and inverters.

Production at plants in Slovenia is to satisfy about 75% of needs for Europe, Middle East and Africa. For the rest of the robots coming from Japan, Slovenia will serve as the main distribution hub.

All out stories on robotics in Slovenia are here

04 Dec 2018, 13:00 PM

STA, 3 December 2018 - Slovenia, whose exports and imports rose by 14% last year, improved its standings among EU countries in terms of foreign trade, the Statistics Office (SURS) said on Monday. Slovenia's integration in international trade of goods reached 64.4%, which puts Slovenia on the fourth place in the EU.

In terms of integration in international trade of services, which last year reached 13.6%, Slovenia ranked 14th among EU countries, while it was 15th in 2016.

Slovenia exceeded the EU average both in terms of import and export growth. The average export growth in the previous three years was 5.1% and the growth of import was 3.5%.

In terms of the share of imports and exports of goods and services in GDP, Slovenia ranked eighth, which is up two spots from the year before. It was preceded by Luxembourg, Malta, Ireland, Slovakia, Hungary, Belgium and the Netherlands.

Foreign direct investments in Slovenia totalled EUR 13.7bn at the end of 2017, which is a 5.4% increase year-on-year. In the last three years, FDI rose by 12-15%.

The share of FDI in GDP stood at 31.85% last year, which compares to 32.1% in 2016.

Slovenia's direct investment abroad totalled EUR 5.9bn at the end of last year, rising by 2.9% in a year. The average growth in the previous three years was somewhat higher, at 3.5%.

Slovenia's direct investments abroad amounted to 13.7% of GDP last year, which is half a percentage point lower than in 2016.

More details can be found at SURS

30 Nov 2018, 10:20 AM

STA, 29 November 2018 - The first reading in the National Assembly of a bill raising the minimum wage by overhauling the way it is calculated indicated that the changes, proposed by the opposition Left with the tentative support of the coalition, are likely to be watered down somewhat during the adoption process.

While all parties agreed the minimum wage, currently at EUR 638 net, was too low, they mostly found issues with the bill.

The motion, coming after basic welfare allowance went up from EUR 297 to EUR 393 earlier this year, would increase the minimum wage by roughly 5% in 2019 and just as much in 2020. In 2021 it introduces a calculation formula that would keep it 20% above minimum living costs.

The main objection raised on Thursday by most coalition parties and the government as it held a correspondence session had to do with to the timeline of the raise, which is closely linked to the exclusion of individual bonuses and allowances from the calculation of the minimum wage.

"A predictable business environment is crucial for the economy in Slovenia, which is why the minimum wage needs to be raised in a well though-out, predictable and gradual way. When considering predictability, it is inappropriate that changes adopted in December 2018 already enter into force in January 2019," the government wrote.

All our stories on Slovenia’s minimum wage are here

It highlighted the need to phase out the bonuses - employers have been including various bonuses into the minimum wage - gradually, arguing "this would give the public as well as private sector enough time to adjust".

While asserting it was in favour of the goals of the proposal, the government reached out to employers, who have been complaining the changes were drafted without social dialogue.

It said that "it would make sense when searching for the most appropriate solutions in the next stages of the legislative procedure to consider social dialogue to the highest extent possible and adjust the enforcement's dynamics for individual solutions".

The proposal in general was rejected only by the opposition New Slovenia (NSi), whose Jožef Horvat said the rise would disrupt the balance of the wage scale, and by the opposition Democrats (SDS) whose Karmen Furman identified a misguided wage policy combined with a misguided social transfers policy as the reason for this disruption.

The two parties also highlighted the absence of social dialogue, while Jerca Korče of the senior coalition Marjan Šarec List (LMŠ) said the Economic and Social Council had had a number of opportunities to discuss a higher minimum wage.

"I have the feeling that the time will never be right for this debate," she said, also rejecting accusations that an effort was under way to revive "an outdated social model" and to meddle in the economy.

"The state has to see the whole picture, which is comprised of both business and the recipients of the minimum wage. Because the wage did not increase on its own, politics assessed it was time to intervene," she said.

Joining the Left in supporting the changes in their current form was the opposition National Party (SNS), whose Dušan Šiško was however simultaneously critical of the raised welfare allowance.

In the end, the bill was endorsed in a unanimous vote with the SDS and NSi abstaining.

Related: Find out the average pay for various jobs in Slovenia

29 Nov 2018, 12:50 PM

STA, 27 November 2018 - MPs failed to pass in a re-vote on Tuesday a reform bill on real estate agencies which was to improve the legal certainty of consumers as well as realtors. The upper chamber vetoed the motion in March, claiming that it excessively regulated the field.

While today's vote ended 42:10 in favour of the bill, absolute majority of 46 out of 90 MPs would have been needed in the re-vote.

Only four of the five coalition parties supported the bill, while the Alenka Bratušek Party (SAB) did not present its view.

The Marjan Šarec List (LMŠ), SocDems, Pensioners Party (DeSUS) and the Modern Centre Party (SMC) said that the bill would protect consumers and provide for the legal safety of all stakeholders on the real estate market.

But the opposition parties New Slovenia (NSi) and the National Party (SNS) agreed with the objections to the bill voiced by real estate agencies, who argued that the bill would restrain agencies too much.

In contrast, the opposition Left opposed it for allegedly not bringing enough regulation.

All our real estate in Slovenia stories are here

The opposition Democrats (SDS) did not present its arguments.

The National Council, the upper chamber of parliament, vetoed the bill in March at the initiative of a group of councillors led by Mitja Gorenšček, the executive director of the Chamber of Commerce and Industry (GZS).

The bill was initiated by the GZS's real estate agencies section but after it was amended at parliamentary committee level, the group turned against it, saying that it envisaged excessive regulation by capping the provision in real estate deals with individuals at 4% (which is in line with the existing law), by limiting provisions in rental deals to one-month's rent and by setting the maximum costs in case of no deal at EUR 150.

29 Nov 2018, 10:20 AM

STA, 27 November 2018 - Foreign-owned high-tech companies RLS and Bosch Rexroth, airport operator Fraport Slovenija and logistics firm Cargo-Partner have won the Invest Slovenia FDI Award to become this year's best foreign investors in their respective categories.

The awards were given out by the SPIRIT agency in Brdo pri Kranju on Tuesday evening, rewarding excellence in R&D and business results; long-term presence in the region; the best employer; and a new greenfield investment into a logistics centre.

RLS (website), a Komenda-based producer of advanced magnetic rotary and linear motion sensors, received the award in the category of R&D and excellent business results.

In 2017, the company had 135 employees and posted a revenue of EUR 21m, up 18% on 2016, with value added per employee at EUR 99,000.

The company, set up by director and co-owner Janez Novak in 1990, has been co-owned by Great Britain's Renishaw, a world leader in metrology since 2000.

Bosch Rexroth (website) from Škofja Loka, which is part of Germany's group Bosch Rexroth AG, won the award in the category of long-term presence in the region.

The company develops innovative solutions for new mobile services for industry and households, and has been present here since 1998, when the foreign investor, at the time known as Mannesmann Rexroth, set up a company in Železniki.

Last year, it posted EUR 40.5m in revenue, of which 99% was generated abroad, and a net profit of over EUR 1m, boasting value added per employee of EUR 40,400.

The best employer in the region is Fraport Slovenija (website), the company from Germany's Fraport Group operating Ljubljana's international airport.

Since it acquired Slovenian airport operator Aerodrom Ljubljana in March 2015, Fraport AG has significantly improved business results and started hiring new staff.

With more than 400 workers in 2017, it was one of the largest employers in the region of Gorenjska, north-west, and is planning further hirings.

A special mention for a new greenfield investment into a logistics centre went to logistics company Cargo-Partner (website) from Ljubljana, which is part of the Vienna-based Cargo Partner group.

Having entered Slovenia in 2005, the company launched a EUR 25m investment into the logistics centre in Brnik near Ljubljana airport in August, which is the largest investment at the group level so far.

With 90 employees, Cargo-Partner generated almost EUR 34m in revenue in 2017, with its value added per employee at EUR 45,500.

Foreign investment in Slovenia reached EUR 13.7bn in 2017

Eligible for the award were companies with at least 50 employees which had not cut workforce in the past year and which had generated at least EUR 35,000 in added value per employee.

The companies had to be in majority foreign ownership, had to operate with a profit and had to have all their tax obligations settled.

The awards have been conferred together with the Ministry of Economic Development and Technology since 2006 as part of a national strategy to attract FDI.

FDI in Slovenia topped EUR 13.7bn at the end of 2017, up 5.4% over the end of 2016, accounting for 32% of Slovenia's GDP, which is still 25 points below the EU average.

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