STA, 7 May 2020 - Details are emerging of a package of state aid the Slovenian tourism sector will get to survive what is expected to be a deep slump. Aside from an extension of existing measures that all companies are eligible for, tourism companies will get an extra loan facility and a short-time work scheme.

 A short-term work scheme, best known by its German name Kurzarbeit (Wikipedia), will be put in place as part of the third stimulus package, Economy Minister Zdravko Počivalšek told the press on Thursday.

Existing schemes such as state financing of temporary layoffs, which expire at the end of May, will be extended for tourism companies by between four and eight months to facilitate a gradual reopening of the sector.

A lending facility providing liquidity loans of EUR 5,000-40,000 for small and medium-sized companies will be put in place and grants of EUR 16 million total will be available to cover the running costs of restaurants and accommodation services.

"The state will help tourism because it is an industry hit by coronavirus in the most drastic way," said Počivalšek, adding that the industry needed "measures that will facilitate not just survival but also restructuring and the development of new products."

"We want to preserve jobs in tourism, retain high-quality staff and help smaller providers survive," he said. The situation is expected to improve next year, but Počivalšek stressed that some estimate tourism may need up to five years to recover.

While outdoor areas of bars reopened this week and restaurants have been serving take-away food for several weeks now, the bulk of the hospitality sector remains shut down as hotels, spas, campsites and tour operators await the government's decision to reopen.

A document circulated on social media in recent days suggested accommodation providers with up to 30 beds could reopen on 12 May along with restaurants, bars and campsites, followed by tour operators, larger hotels, wellness centres and pools on 1 June.

Počivalšek said these dates were merely indicative. "They still need to be examined. Some are more likely, others less so."

Another major unknown are instructions for precautionary measures that providers will have to follow. Počivalšek said they were being finalised and would be presented shortly.

All our stories on coronavirus and Slovenia are here

Contents:

Almost 11,000 jobs lost in Slovenia in April

Slovenia's annual retail sales down 15% in March

Brussels projects 7% GDP drop for Slovenia this year, 6.7% recovery in 2021

Almost 11,000 jobs lost in Slovenia in April

STA, 6 May 2020 - The coronavirus crisis is taking a heavy toll on Slovenia's job market with data from the Employment Service showing that 10,793 people were added to the unemployment register in April alone, pushing the total up by 19.9% year-on-year to 88,648.

Since Slovenia declared coronavirus epidemic in mid-March, the number of people registered as unemployed rose by 13,622.

In April alone, the unemployed total rose by 13.9% over March, as 14,419 people were put out of work, 84% more than the month before and over 190% more than in the same month a year ago.

Apart from 6,209 who saw their fixed-term job contracts expire (more than double the month before), 5,616 were made redundant in April, a surge of 130% compared with March and almost 750% more year-on-year. Most of those were employed in the hospitality sector, followed by manufacturing and retail.

A further 481 of those who were added to the unemployment register were first-time job seekers (up 12% from March) and 164 lost jobs as their companies went bankrupt (up 61%).

Out of 3,626 who were removed from the unemployment register, 2,373 found a job or became self-employed. That is 61% fewer than in March and almost 60% fewer than in April 2019.

The most pronounced increase in unemployment was registered by the Kranj unit of the Employment Service, at more than 22% month-on-month and over 37% year-on-year.

Employers reported 4,336 vacancies in April, 41% fewer than in March and 60% fewer than the same month a year ago. Most job openings were for welders, builders and lorry drivers.

The last available data for the registered unemployment rate are for February, that is before the epidemic, standing at 7.9%, down 0.3 of percentage points from January and down half a point compared with February 2019.

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Slovenia's annual retail sales down 15% in March

STA, 6 May 2020 - The EU's retail sector was severely affected by Covid-19 lockdown measures in March at monthly and annual levels, Eurostat latest figures show. Slovenia's posted an annual drop of 15.1%, the second steepest fall in the entire EU, behind France (-16%). This compares to the EU's average drop of 8.2% and the eurozone's 9.2%.

Hungary's retail sector meanwhile posted the highest annual rise, that of 3.5%, followed by Romania at 3.1%.

At the monthly level, the eurozone's retail sector saw its sales drop by 11.2%, while the drop at the EU level was slightly less pronounced, at 10.4%.

The drop in Slovenia was above average, at 13.5%.

Sales of non-food items and fuels posted the steepest drops; non-food items were down 23.1% in the eurozone and 20.8% in the EU, and fuels 21.3% and 19.3%, respectively.

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Brussels projects 7% GDP drop for Slovenia this year, 6.7% recovery in 2021

STA, 6 May 2020 - In its first economic forecast following the imposition of measures in EU member states to contain the coronavirus pandemic, the European Commission has projected that Slovenia's gross domestic product (GDP) will drop by 7% this year compared to 2019, while a 6.7% recovery is expected in 2021.

This is a significant correction compared to the Commission's forecast in February, in which Slovenia was expected to record a 2.7% growth of GDP this and next year.

The spring forecast for 2020 and 2021 for Slovenia is nevertheless somewhat better than for the entire eurozone on average, which stands at -7.7% for this year and +6.3% for next year.

The European Commission notes that economic growth in Slovenia had already been slowing in the second half of 2019, when investment spending started to hit the brakes. "As a small open economy, Slovenia is particularly vulnerable to the effects of the Covid-19 pandemic."

The forecast adds that the country's economy is projected to shrink significantly in 2020, but the stimulus package announced by the authorities is expected to partly cushion loss of jobs and household incomes and pave the way to a strong rebound in 2021.

"Public finances are expected to go into significant deficit in 2020, due to the loss of revenues and the sizeable measures to support the economy, and to improve in 2021 together with the recovering economy."

The Commission notes that Slovenia entered the coronavirus crisis in a relatively strong position, but supply disruptions and containment measures are expected to produce strong negative effects, especially in the first half of 2020.

The export of services, particularly transport and tourism, is expected to be exceptionally weak this year, and new investment decisions in the private sector are likely to be largely postponed towards 2021.

Slovenia's economic activity is meanwhile expected to grow by about 6.7% in 2021, but this means that GDP would not fully recover its 2019 level by the end of next year.

The government measures are expected to dampen the impact on the labour market, but nevertheless, the unemployment rate is expected to increase from last year's 4.5% to 7%. The rate is expected to decrease again to around 5% in 2021.

Annual inflation is projected to fall to 0.5% this year due to low energy prices and weak demand, before rising to 1.2% in 2021.

This year, the general government balance is forecast to deteriorate to a deficit of around 7.2% of GDP due to the projected decline in economic activity and the Covid-19 measures.

In 2021, under the assumption of no-policy-change and that the anti-epidemic measures will only have a temporary effect in 2020, the general government deficit is expected to decrease to around 2% of GDP.

Slovenia's debt-to-GDP ratio is forecast to increase significantly to around 83.7% of GDP in 2020, and to start declining again in 2021.

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STA, 5 May 2020 - Airline Adria Airways creditors have reported a total of EUR 151 million in claims to the bankruptcy estate of the company, which has been in receivership since last October. However, the official receiver has admitted only EUR 87.7 million in claims, while he valued Adria's bankruptcy estate earlier this year at EUR 6 million.

Official receiver Janez Pustatičnik accepted secured and unsecured claims by legal and physical entities to the tune of EUR 72.6 million, shows a list of examined claims he published on the website of the Agency for Legal Records (AJPES).

Claims by former employees for unpaid wages - Adria had more than 500 workers - amount to EUR 15.1 million. The majority are priority claims.

Former CEO Holger Kowarsch has EUR 67,600 in claims and Sven Kukemelk, who ran Adria's flight school, EUR 47,700.

The highest claim - EUR 6.6 million - is that of the German airline Lufthansa and its Austrian subsidiary Austrian Airlines (EUR 3.1 million), both unsecured.

The US's Aerocentury has EUR 4 million in unsecured claims (but EUR 37.5 million was disputed) and Rolls-Royce Corporation EUR 2.1 million.

A right to separate settlement due to a lien has been recognised to the company 8900973 Canada Ltd (EUR 3.6 million), Bank of America Merrill Lynch (EUR 1.3 million) as well as to Ireland's EIC Aircraft Leasing (EUR 195,000) and Sasof III Aviation Ireland (EUR 106,000).

The two Irish companies also have EUR 4.3 million and EUR 1.6 million in unsecured claims, respectively.

Fraport Slovenija, the operator of Ljubljana airport, has a right to separate settlement for EUR 4.2 million and another EUR 255,000 in unsecured claims. Intesa Sanpaolo bank has meanwhile EUR 4.5 million in conditional claims.

There are also several airports that have had their claims admitted, the highest being EUR 1.7 million claimed by Tirana's airport.

Darwin Airlines, a Swiss regional air carrier bought by Adria after the latter was taken over by the German fund 4K Invest, has a claim of EUR 455,000.

The claim of Eurocontrol, the European organisation for the safety of air navigation, is EUR 2.1 million.

FURS, Slovenia's revenue service, has EUR 162,000 in priority claims and EUR 139,000 in unsecured claims.

The country's health and pension insurance funds, ZZZS and ZPIZ, have EUR 58,000 and EUR 367,000 in priority claims, respectively.

In February, Pustatičnik said Adria's bankruptcy estate was worth EUR 6.2 million, of which EUR 3.1 million stemmed from the title to its office building at Ljubljana airport.

The state sold Slovenia's flag carrier Adria Airways to the German turnaround fund 4K Invest in 2016 for EUR 100,000 after recapitalising it with EUR 3.1 million.

The new owner was unable to give it a fresh impetus, so Adria was grounded at the end of September 2019 after almost 60 years since its establishment, and filed for receivership.

Last March, the official receiver selected an auditor to audit Adria in order to examine the possibility of claiming damages from its former leadership. The police are meanwhile investigating abuse of office and fraud.

All our stories on Adria Airways are here

Last summer there seemed to be real movement on the planned IKEA store in Ljubljana’s BTC City, but seasoned observers knew it wasn’t worth delaying the purchase of a bookshelf, sofa or lamp, that they should continue to source alternative meatballs and buy their own pencils and tape measures.

The first reports of the Swedish furniture giant setting up shop on the sunny side of the alps came in 2014, although Ljubljana Mayor Zoran Janković later claimed that talks began in 2005. The story then dragged on for years, with the opening always about 18 months away, after just this last bureaucratic hurdle was jumped.

There was thus no great excitement in June 2019 when it was reported that IKEA had finally obtained the permits needed to start construction, since the same story noted an ongoing dispute about an access road and that the store would open, as usual, in about 18 months.

But the long wait for affordable Swedish design in a big box setting – some 15 years according to Mayor Janković – will soon be over. As the following videos show, the building, façade and roof are now completed. The work is now focused on interior installations and external elements, including the distinctive IKEA navigation tower, and is being carried out under full corona conditions.

In summary, the place is 34,000m2, will offer 9,500 products and have 52 room settings, while the restaurant will serve both Swedish and Slovenian food – perhaps a klobasa? Plants will be on the roof along with solar panels that should provide most of the power the store needs, making Ljubljana’s IKEA one of the greenest in the world.

No word yet on the opening date, but sometime in the autumn seems certain, in just over 18 weeks.

STA, 4 May 2020 - Cement factory Salonit Anhovo restarted production on Monday after a two-week suspension, heeding strict preventive measures to contain the Covid-19 spread. Shoe maker Alpina also pressed ahead at full steam today to meet the delivery deadlines after partly relaunching manufacturing in early April. Alpina shops reopened as well.

Salonit Anhovo used the break, imposed due to the coronavirus outbreak, to carry out maintenance works. Necessary cement deliveries were not suspended during the past two weeks, the company, based in western Slovenia, has said.

The restrictions, which were introduced already in March, remain in place, laying down that the staff should wear protective gear and use hand sanitisers as well as maintain a physical distance. The company's crisis task force meanwhile makes sure that the measures are implemented and heeded.

"Construction sites in Italy are reopening; the Slovenian market recorded in April a 20% drop in realisation compared to the expected figures. The company believes that the demand for our cement will further increase on the domestic market since the construction sector is key for relaunching the economy," Salonit Anhovo chairman Julijan Fortunat has said.

Meanwhile, Alpina, famous for its winter sports footwear, has recorded a decrease in demand due to the coronavirus crisis as well as this year's mild winter.

The Žiri-based company's director Jernej Osterman told the STA that the demand for sports footgear plunged by 30-40% compared to last year. Sales of other shoe products have been virtually non-existent in the past month and a half due to shop closures.

In April, online sales surged only to bring in revenue that cannot even begin to compare to the company's average monthly figures, he said, adding that hiking shoes had been most popular since Slovenians had regained appreciation for walks amid the lockdown.

Alpina reopened 27 out of its 48 shops today, with roughly half of the shop personnel returning to work as well. Others remain on furlough.

Osterman does not expect an influx of shoppers, even though the shops have been closed for so long. Instead, he believes the crisis will have an impact on shopping habits by reducing consumption.

"Due to pessimism, the consequences for the economy could be even significantly bigger," he said, urging a more optimistic approach as well as purchasing domestic products and thus keeping Slovenia's economy afloat.

Alpina director also expressed hope that the expected third stimulus package would provide aid to companies in June and July as well, which would help further mitigate the economic fallout.

STA, 4 May 2020 - With the tourism industry projected to remain shut down longer due to coronavirus than most other sectors, the Slovenian government is considering extending temporary emergency aid for tourism companies by a few months or even until the end of the year, Economy Minister Zdravko Počivalšek said on Monday.

"Tourism experienced the impact of the coronavirus crisis first and, partially due to the reliance on foreign guests, it will not be able to restart its operations until later," Počivalšek said before a newly established council for tourism, a government advisory body, convened to discuss the need for additional aid and health standards.

Specifically, the state financing of temporary layoffs, which expires at the end of May, could be extended by four months or even until the end of the year for the tourism business. Počivalšek said he would formally propose that to the government.

It would also make sense to set up a fund that would extend grants and favourable loans for the financing of current operations and investments since the industry needs to adjust to new standards.

While the current epidemiological situation is favourable and represents "an optimistic basis," Počivalšek noted that revenue in tourism was expected to contract anywhere between 25% and over 70% this year depending on the pace of the easing of measures.

Bar terraces opened today and restaurants have been allowed to serve food for take away and delivery for several weeks now. Počivalšek said "more significant steps" might follow in the second half of May or in June, for example the opening of small accommodation facilities.

Slovenia has also been in talks with Croatia on reopening the border for tourism. Počivalšek said the heads of both public health institutes would discuss protocols for border crossing this week.

The minister however warned that tourism would change permanently as a greater emphasis is placed on health. "I am confident that the tourism business and we as the competent ministry know which direction the measures should take so that we remain at the vanguard in this field."

Počivalšek noted that Slovenian tourism had already built its business model on niche experiences and active holidays, which he said would remain its foundation in the future.

The director of the National Institute of Public Health, Milan Krek, said after the session that an expert group would meet this week "to make sure that once the green light for opening is given, innkeepers, hotel owners and other workers in tourism are ready."

Gregor Jamnik, the head of the Slovenian Association of Hotels, said liquidity was essential now for hotel operators since the industry would take longer to recover and since the likely ongoing presence of the virus would require "an unprecedented change of conduct in hotels, bars and restaurants".

Podčetrtek Mayor Peter Misja, the head of the Slovenian Tourism Association, added that the standards that will be put in place should be workable. "Slovenia should not be more papal than the pope."

STA, 30 April - It seems increasingly likely that the closure of stores, including groceries, on Sundays as a result of the coronavirus epidemic will become a permanent arrangement and be extended also to the period after the crisis. A legislative initiative to this effect, announced by the opposition Left, was backed on Thursday by PM Janez Janša.

In announcing the legislative proposal, the Left joined today the Trade Union of Shop Assistants, which argued ahead of Labour Day in favour of keeping stores closed on Sundays and bank holidays also after the epidemic.

Podpiramo ? https://t.co/3EJRoaO3YC

— Janez Janša (@JJansaSDS) April 30, 2020

The Left pointed out that voters had already decided in a referendum in 2003 that stores should be closed on Sundays, but were ignored later due to pressure from retailers.

Prime Minister Janša responded to the Left's tweet by tweeting "We support". Support was also expressed at the government's coronavirus briefing by Interior Minister Aleš Hojs, who said he had been an advocate of this all along. Hojs said those working in stores should be free at least one day a week and that it did not matter if consumers spent their money in six or seven days.

The Chamber of Commerce responded to the developments by arguing that the trade union and the Left should be aware one working day less would result in redundancies.

"Such a change depends on a change of the collective bargaining agreement that needs to be agreed by social partners, meaning the trade unions and employers," the chamber's president Marija Lah told the STA.

STA, 28 April - The government is further relaxing restrictions imposed to contain the coronavirus by reopening museums, galleries and libraries and by allowing real estate agents and chimney sweepers to resume business tomorrow. As of 4 May, bars and restaurants will also be able to reopen, yet serving guests only at outdoor facilities.

Outdoor bar and restaurant facilities reopening is the first easing of restrictions for the hospitality sector, the government noted after Tuesday's correspondence session.

Given that the recommendations of the National Institute of Public Health are taken into account, all the latest exceptions to the 16 March temporary ban on the sale of goods and services allow for a minimum contact between people, the government explained its decision on the relaxation of measures.

Small businesses such as shoe repair shops, key cutters, clothing shops, photographers, photocopy services, watchmaker shops and jeweller's will also reopen on Monday.

While the government announced that hairdressers and beauty parlours will reopen on 4 May some time ago, it now also added massage and pedicure services to the list.

Excluded are however still saunas, wellness centres, piercing and tattoo shops and other similar shops where it believes Covid-19 could be contracted more easily.

People older than 65 as well as other vulnerable groups such as pregnant women and disabled will be able to do their shopping also outside the dedicated hours, that is not only between 8am and 10am. The elderly will also no longer have to present a document to prove their age.

Nevertheless, the vulnerable groups are still recommended to do their shopping during the hours which are designated especially to them.

While even shops which have remained open during the lockdown had to close on Sundays, shops selling mostly food can be open on Sunday, 3 May, between 8am and 1pm.

This is to avoid crowds just before and after the May Day holiday weekend, when shops would otherwise be closed for three full days, from Friday to Sunday.

Union calls for permanent closure of shops on Sundays

STA, 28 April 2020 - The Trade Union of Retail has called for the permanent closure of shops on Sundays. "Over this past month we have proved as a nation that Sunday shopping is not urgently needed," it said in a message circulated ahead of Labour Day.

The union says Sunday shopping was a great burden for employees and ate into the time they could otherwise spend with their families. It also distracts the families of shoppers from spending quality time together.

Several European countries have put in place limits on Sunday shopping and "their retail systems are functioning despite such restrictions."

Slovenia closed shops Sundays as part of lockdown measures that took effect in mid-March, with exemptions only for petrol stations and small independent grocery shops.

Before the pandemic, working time was almost fully liberalised and many shops were open Sundays.

STA, 28 April 2020 - Revoz, the Renault-owned car assembly plant and by far Slovenia's largest exporter, relaunched production on Tuesday after shutting down due to the coronavirus epidemic on 17 March.

The resumption of operations will be gradual and workers will work in two shifts starting next week, the company told the STA, adding that preventive measures had been beefed up and additional protective gear had been provided for employees.

The Novo Mesto-based company relies heavily on workers from the broader region and even Croatia, and has previously indicated that the re-launch of production would hinge on the resumption of public transportation, which has been suspended nation-wide since 16 March.

It said employees would have to arrange their own transportation to work this week while efforts will be made to arrange bus transportation for those unable to do that until next week.

Revoz has a workforce of roughly 3,400 and produces the Renault Clio, Renault Twingo and Smart Forfour EQ models.

STA, 25 April 2020 - Retailer Mercator saw its sales revenue increase by 1.8% to EUR 2.14 billion in 2019 as net profit nearly tripled to EUR 4.7 million from EUR 1.6 million in 2018. Mercator also reduced its debt.

Revenue from retail sales, Mercator's core business, increased by 2.2% to EUR 1.7 billion.

Normalised gross operating profit (EBITDA) rose by more than 60% to EUR 172.5 million.

The retail group reduced its debt by almost a quarter last year, mostly as a result of its real estate monetisation. Net financial debt by comparable standards amounted to EUR 587 million and the net debt-to-EBITDA ratio was reduced from 7.2 to 5.2.

Mercator, a Ljubljana-based group, is part of the insolvent Croatian holding Agrokor.

Its transfer to Fortenova, Agrokor's successor, has been suspended after the Slovenian Competition Protection Agency temporarily seized Mercator shares Agrokor as security for a fine.