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20 Apr 2019, 10:30 AM

STA, 19 April 2019 - Tourism contributed EUR 5.7bn or 12.3% to the Slovenian gross domestic product (GDP) in 2018, according to a report by the World Travel and Tourism Council (WTTC). The sector employed 110,700 people or 12.8% of total employment.

The annual contribution of tourism to the Slovenian GDP increased by 6% compared to 2017, the Slovenian Tourist Board said.

Related: 2018 Saw 8% Rise in Tourists, 10% in Nights, Strongest Growth from Abroad

In Europe, tourism contributed 9.7% to the GDP last year, an increase of 3.1 percentage points over 2017. Some 36.7 million people or 9.7% of all working Europeans were employed in the sector.

On a global scale, the tourism and travel sector directly and indirectly contributed EUR 7.825bn or 10.4% to the global GDP. The sector employed some 319 million people.

This year, tourism's contribution to the global GDP is set to increase by an additional 3.6%. The WTTC estimates that the total number of people employed in the sector globally will increase by 2.9%.

All our stories on travel and tourism in Slovenia are here

19 Apr 2019, 16:20 PM

STA, 17 April 2019 - Slovenians prefer to save in bank deposits, however mutual funds have seen an increase in assets and savers. At the end of 2018 Slovenian households had 1.7 billion euros invested in mutual funds, said Karmen Rejc, director of the Slovenian Investment Fund Association.

The average European invests 10% or 5,800 euros of their assets in mutual funds, whereas in Slovenia that figure is lower, namely 6% or 900 euros, Rejc said at a news conference leading up to Friday's World Mutual Fund Day.

Matjaž Lorenčič, president of the Slovenian Investment Fund Association and Infond Investment Funds chairman, said that out of the over 20 billion euros in last year's bank deposits, between 250 and 300 million euros were lost due to inflation.

Slovenian asset managers manage approximately 2.7 billion euros in 100 mutual funds. Adding the assets in alternative funds and those managed based on contracts for the sound management of operational risk, this figure amounts to approximately 3.7 billion euros. The number of investors in mutual funds is approximately 450,000.

Slovenian mutual funds are managed by six companies. Last year they recorded an inflow of approximately 540 million euros, an outflow of 550 million euros. This year, cash flow is positive, according to Lorenčič.

There are 96 foreign mutual funds operating in Slovenia. These manage 211 million euros in assets.

18 Apr 2019, 12:50 PM

STA, 17 April 2019- Slovenia still has a way to go before becoming truly attractive to best talent, a debate organised by AmCham heard on Wednesday. The speakers, among them Labour Minister Ksenija Klampfer, shared the view that capable workforce thrived on demanding and interesting challenges.

 

Nana Šumrada Slavnič, the head of legal services at Ekipa 2, a branch of Outfit 7 that created the Talking Tom game, believes Slovenia has a good education system but it fails to deliver variety to those who want more than what is offered as part of the curricula.

Moreover, companies should focus on public exposure of their best talent. "People are good at their jobs when they feel valued," Šumrada Slavnič told the event hosted by the Ljubljana Faculty of Economics.

The minister in charge of labour, family, social affairs and equal opportunities, Klampfer, believes that life-work balance remained a blind spot for many Slovenian employers.

Often, people leave their jobs because of poor relations at the company, she said, adding the only way to address this issue was to improve communication at the workplace.

Professor Robert Kaše of the Economics Faculty believes that talent need challenges. A study of the faculty showed that talents believed they were using only about 66% of their potential at work. He also stressed the importance of either formal or informal recognition of the talent's status within the company.

Ksenija Špiler of BB Consulting believes it is key for talents to find their own challenges and not for them to wait to be presented by challenges with the superiors.

Touching on brain drain, the minister said this was a normal phenomenon. It is good for people to go abroad, gain new experience and return back home. Slovenia can achieve that they will indeed return through effective housing policies and welfare system.

Matic Vošnjak of Competo, a human resources consultancy, said that 47% of people who venture abroad return back home. However, they often have problems with finding new opportunities for themselves once they return because companies frequently do not know how to use their potential.

All our stories about AmCham Slovenia are here

17 Apr 2019, 16:38 PM

STA, 16 April 2019 - The National Assembly voted down the Democratic Party (SDS)-sponsored amendment designed to cut the personal income tax on Tuesday, thus paving the way for the adoption of the government proposal to abolish tax on the annual holiday allowance up to average monthly pay.

In its third such proposal since 2017, the opposition party sought to reduce tax rates for all income brackets by two percentage points, raise brackets by EUR 2,000 upwards, and increase the general tax credit from EUR to 3,300 to EUR 4,000, as well see to its adjustment with inflation.

The party argued that labour taxation in Slovenia was among the EU's highest, which made Slovenian businesses less competitive and less productive because they could not spend enough money on research and development. The high taxation was also blamed for the brain drain.

The party calculated that the amendment would result in a loss of revenue from income tax of EUR 387m, which would be offset through higher receipts from VAT as a result of an increase in consumption.

The Finance Ministry estimated the loss of revenue at EUR 383m and the increase in VAT revenue at EUR 19m. The government and coalition MPs argued that the loss of revenue would thus be excessive.

The only other parties to back the SDS proposal were the fellow opposition New Slovenia (NSi) and National Party (SNS).

Now that the SDS amendment is off the table, the National Assembly will be able to move on to the government-sponsored amendment which increase the threshold at which the holiday allowance is exempt from taxes and contribution from 70% to 100% of average pay.

The parliament is expected to pass this proposal at a session due on 25 April.

The current session wrapped up today after only two days of proceedings, including Monday's questions time.

All our stories on tax in Slovenia are here

17 Apr 2019, 14:25 PM

STA, 17 April 2019 - Abanka, the country's third largest bank, posted EUR 66.7m in net profit last year, up 56.6% over 2017, according to the audited annual report released on Wednesday.

The report says that the optimisation of operations of Abanka continued in 2018, reflecting in a reduction of operating costs, which were down by 2.4% or EUR 1.8m compared to the year before.

Net interest revenue amounted to EUR 60.6m, down from EUR 71.9m in 2017, while net non-interest revenue was up to EUR 64.4m from EUR 46.8m. Impairments and provisions amounted to EUR 22m, up from EUR 8.2m in 2017.

Abanka's total assets amounted to EUR 3.73bn at the end of last year, up from EUR 3.66bn at the end of 2017.

The Abanka group's net profit was up by 57% to EUR 65.6m, while net interest revenue was down by almost 17% to EUR 61.1m.

The bank continued to lower the share of non-performing loans, which dropped by 5.6 percentage points at the group level to 4.6% through the sale of non-performing claims.

Abanka noted that the operating results, the sound capital position, a high level of liquidity and a significant reduction in non-performing loans also resulted in an improved credit rating by Moody's to investment grade in 2018.

The bank has been in 100% state ownership since it was bailed out with taxpayer money in 2013. The government must privatise Abanka to meet the commitments it made in exchange for the EU clearance of the state aid.

According to unofficial reports, three binding bids for the bank were submitted in the second half of March.

The media have mentioned the US private equity fund Apollo, Hungarian bank OTP, Serbia's AIK Banka, Austrian Erste Group, as well as US private equity funds Blackstone and Advent International as potential buyers.

While the pricing of the offers remains a secret, analysts estimated late last year the bank was worth EUR 340-460m based on the book value.

16 Apr 2019, 12:25 PM

STA, 16 April 219 - HSE, the state-owned power utility which owns the Šoštanj coal-fired power station (TEŠ), is looking for a new energy source for TEŠ, according to HSE chairman Stojan Nikolić. He believes burning biomass or waste would be economically viable.

"We know that we have to overhaul the plans for the operations of the Premogovnik Velenje mine and TEŠ. It's been clear for a while that TEŠ will not be able to operate until 2054, as originally planned, both for economic and technical reasons," Nikolić said in an interview with the STA.

But he could not say when the coal-fired power station will be wound down, because it is not clear yet how long the extraction of coal from the Velenje mine, the only source of coal for TEŠ, will be possible.

"My estimate is that until 2040. But we need to set the framework for a fair transition to other activities for the entire coal mining region.

"If we manage to agree on this in the next two or three years, which I'm hoping for, then I think we can still be competitive in the next 15 or 20 years with the production of electricity from coal," he said.

The main challenge faced by HSE as the biggest coal-fired producer of electricity in the country is decarbonisation.

The construction of TEŠ 6, the cutting-edge generator with minimal emissions, was part of efforts to reduce CO2 emissions, Nikolić said.

But TEŠ is still unable to cover the costs of the investment, which are being partly covered by HSE. Admitting that TEŠ was struggling, Nikolić said that the management of HSE and TEŠ were looking for possible solutions. Given that the viable coal reserves at the Velenje mine are running out, importing coal is one of the options.

However, given the current market prices of coal and CO2 coupons, importing coal would not be economically viable and the situation will only get worse in the future.

This would be an option only if a supplier was found that would offer coal at the same price as the Velenje mine, which is EUR 2.75 per gigajoule, or 50 cents more at the most, Nikolić said. "That is, if we get all the necessary permits."

The Environment Agency already said importing coal would require no additional permits, but the environment permit would still need to be changed if any other energy source is to be used at TEŠ.

"Burning biomass would probably be economically viable and definitely also burning processed waste, as now we are paying a lot of money to export waste to Austria and Italy."

Burning imported coal is seen as the last resort, but if this would make it difficult for TEŠ to obtain an environmental permit for biomass and waste burning, then the idea to import coal would be abandoned.

Slovenia will have to solve the problem of waste treatment soon, and TEŠ as well as the cement plant in Anhovo are appropriate facilities to burn waste, Nikolić said.

The other area HSE is focussing on is renewable energy sources but the options here are limited. The Drava river can take no more power plants, while recently a political decision was made not to build any on the Mura, he said.

HSE is currently cooperating with GEN Energija in building a chain of hydro power plants on the lower Sava river and has a concession for the plants on the middle Sava.

But Nikolić said they often faced resistance from environmental groups. Any new facility can be controversial, which is why measures must be taken to minimize the environmental impact and take measures to offset its effects, he believes.

The alternative is to import electricity from the countries which still burn coal, such as Poland, Bosnia-Herzegovina and Kosovo. But this means more green house gas emissions. "What will we do with the intact Mura if temperatures rise for a couple of degrees and there will be no life in it?"

By 2040, two biggest power plants, TEŠ and the Krško Nuclear Power Plant (NEK), generating more than half of electricity in the country, will probably be wound down. "They will not be able to be replaced with just hydro power plants," Nikolić stressed.

16 Apr 2019, 11:15 AM

STA, 15 April 2019 - EU member states gave the final stamp of approval on Monday to the directive on copyright in the single digital market. Nineteen states voted yes, six were against, with three, including Slovenia, abstaining.

 

EU members have two years to transpose the new rules, which were adopted despite the criticism of facilitating censorship on the internet, into national law, whereupon the directive will enter into force.

The Slovenian Permanent Representation at the EU explained Slovenia had abstained because it believed the final compromise did not sufficiently reflect the interests of the majority of Slovenian stakeholders.

The German news agency dpa reported that if another country, for instance Germany, had voted no or abstained today, the new directive would have fallen through.

According to the French press agency AFP, voting against were Italy, Finland, Sweden, Luxembourg, the Netherlands and Poland, whereas the other two countries abstaining were Estonia and Belgium.

When the European Parliament voted on the directive on 26 February, the majority of Slovenia's MEPs rejected it, mostly arguing it undermined internet freedom. Only three of Slovenia's eight MEPs backed it.

However, Slovenian creatives welcomed the Parliament's yes vote, with its fiercest opponents, among then the opposition Left and the non-parliamentary Pirate Party, labelling it a "catastrophe" and a "dark day for the internet".

The directive is part of the EU's reform of copyright law designed to adjust it to the digital age. In today's press release, the EU Council said it provided an adequate degree of protection of authors and artists, at the same time bringing new opportunities to access and share copyrighted works around the EU.

The directive was put forward by the European Commission in September 2016, but it took two years of talks and adjustments for the European Parliament, the EU Council and the Commission to arrive at a compromise last February.

13 Apr 2019, 17:57 PM

STA, 13 April 2019 - The downturn in Germany's economy has not yet had a significant effect on Slovenia's economy, although automotive suppliers exporting to Germany have started to see a slight drop in orders.

 

Gertrud Rantzen, the president of the Slovenian-German Chamber of Commerce, has told the STA in Bled this week that there are several reasons for the slowing of Germany's economy, among them uncertainty caused by Brexit and the intention of the US to raise tariffs on imports.

She said that the signs of slowing are most evident in manufacturing industry, as this sector sees a decline in investment funds in times of uncertainty.

Rantzen does not believe that Germany faces a crisis as severe as the one decade ago, but she does not exclude the possibility. She believes much will depend on Brexit and the relations between Europe and the US.

The automotive industry, which has started to feel the effects of the downturn, is well prepared for such fluctuations in economic trends, said Rantzen.

She believes that most countries are following economic indices closely and are well-prepared, so it is not likely that crisis as severe would repeat.

Marko Gorjup, the boss of the Novo Mesto-based TPV group, an automotive supplier, told the STA at the sidelines of an exporters' conference in Brdo pri Kranju this week that there had been a slight decrease in orders in autumn.

The decrease is "nothing drastic" and the company is optimistic that the situation will stabilise in the second half of the year, he said.

The economic slowdown has not yet been felt in construction, Igor Kastelic, the director of Rem Trebnje, a module building maker, told the STA at the conference.

"In the first quarter, our revenue was about 15% higher than last year, with Germany accounting for the majority of our sales," said Kastelic, implying that the company was barely keeping up with orders.

Moreover, Marko Lukić, the boss of Lumar, a maker of prefabricated houses, said in mid-March at an event hosted by PwC and KD Skladi that the company's production lines were booked for the next year and a half.

He noted however that the construction sector would be the last to feel a potential economic crisis due to its long investment cycles.

12 Apr 2019, 14:15 PM

STA, 12 April 2019 - Prime Minister Marjan Šarec highlighted the port of Koper as the closest link between Central and East Europe, and China as he addressed the eighth summit of China and 16 Central and East European countries in Croatia's Dubrovnik on Friday.

In line with the bill, courts will have to weigh whether Banka Slovenije, the central bank, correctly applied the law in ordering the bailout, and correctly estimated bank losses.

Plaintiffs will be able to launch proceedings within ten months after the law enters into force. Banka Slovenije will be the defendant and if it loses, it will have to settle the damages from its reserves. If those do not suffice, it will be able to borrow from the state.

Banka Slovenije opposes the bill, in particular the solution under which it would have to pay damages if the courts establish to the plaintiffs were wronged, arguing that this would lead to unlawful monetary financing.

The central bank believes the law should state clearly that it is not responsible to pay compensation for the damage. A similar position is held by the European Central Bank.

The government rushed to endorse the bill at yesterday's correspondence session because the upper chamber of parliament, the National Council, was also preparing a similar bill, which however envisages the state launching procedures against Banka Slovenije.

"We rushed it, because we wanted the legislative procedure to start as soon as possible. It is possible that we will be merging the bill with the National Council's legislative proposal," Finance Ministry State Secretary Metod Dragonja said yesterday.

The National Council adopted its proposal today, arguing the government's bill fell short of what had been asked by the Constitutional Court.

The upper chamber's president Alojz Kovšca stressed that excessive procedural costs would discourage potential plaintiffs from suing Banka Slovenije, which means effective legal protection had not been provided.

The National Council would have Banka Slovenije sued by the state and the burden of proof transferred to the central bank.

Kovšca announced cooperation in the adoption of the final act, but added it would be vetoed if it failed to provide a realistic solution.

The bill will go through a regular procedure in parliament and the government is counting on it to be passed in June or July.

In the three months after the passage, special virtual data rooms envisaged by the bill would be set up by the Securities Market Agency (ATVP) where Banka Slovenije will give all interested parties access to information.

Potential damages are estimated between zero and EUR 963.2m, which is how much liabilities were wiped out by the banks which were nationalised in 2013 and 2014, plus extra costs.

The Finance Ministry said in presenting the bill that Banka Slovenije had decided for the measures independently and therefore carried the responsibility and liability for potential damages.

The legislation based on which the measures were taken has been found to be in line with the Constitution, so it is Banka Slovenije and not the state which is responsible for the way the legislation was implemented, the ministry said.

The ministry took into account the central bank's remarks regarding the setting up of data rooms, which it claimed would be too expensive, so the bill envisages the setting up of virtual rooms by the ATVP with the ministry only providing one room where computers and software will be available for accessing data.

But the ATVP warned in a letter today that it lacked the necessary know-how, money and staff to set up the virtual data rooms, so it would have to outsource them, which would require additional funding and a lot more time than the envisaged three months.

The agency also said it had no resources to decide on the potential thousands of applications for access to the data rooms, so it proposes that Banka Slovenije or the Public Administration Ministry take over the task.

In line with the bill, the court will decide whether there are grounds to award damages to plaintiffs and also set the amount of the potential damages, whereas in the original proposal Banka Slovenije was to determine the amount of damages, pending final approval by the court.

All procedures will be handled by the Maribor District Court, where Banka Slovenije will have to prove that it had reasons for the wipe-out and that it takes into account remarks regarding access to information and data protection.

Slovenia spent roughly EUR 5.5bn bailing out and nationalising the three largest banks in the country (two small banks were wound down) in a process seen as saving the economy from ruin.

However, subsequent revelations cast doubt on the methods used to value bank assets, which in turn determined how much capital banks needed and to what extent junior creditors were affected.

All our stories about Slovenia and China are here

12 Apr 2019, 12:30 PM

STA, 11 April 2019 - Participants of panel on Brexit hosted by the British-Slovenian Chamber of Commerce agreed on Thursday that the deadline extension means more time for the best possible solution, meaning one based on a deal.

British Ambassador to Slovenia Sophie Honey believes the extension of Brexit until 31 October does not mean a prolongation of uncertainty but more time for the best possible approach.

UK Trade Commissioner for Europe Andrew Mitchell highlighted the close trade ties between the UK and the EU, pointing out trade with EU countries accounted for more than half of Britain's foreign trade last year.

He said a no-deal Brexit would have substantial consequences for the economy and agreed the extension provides an opportunity to reach a deal and enable the firm economic ties to be preserved in the future.

The UK wants a detailed free trade agreement with the EU that would cover customs and regulatory cooperation so as to allow companies to continue to trade in a similar fashion they are doing now, Mitchell said.

As for the Brexit-related developments in the British parliament, Honey spoke of the biggest challenge for the government in several generations, while Mitchell believes time will show that this was the "most profound democratic exercise".

Honey stressed on the sidelines of the event that the UK has been part of the EU for 45 years. EU membership touches on practically all facets of life, while the referendum result was 52% vs 48%, which is why she feels it is normal that an extensive discussion is under way now in the UK.

The uncertainty regarding future relations has so far not shown in the trade between the UK and Slovenia - Slovenian exports rose by 11% last year, while imports from the UK were up 15%.

However, similar growth should not be expected after Brexit, said the head of the Foreign Ministry sector for bilateral economy cooperation Iztok Grmek.

A number of companies who do business with the UK also attended the event, but they were left without concrete answers regarding what they can expect after Brexit.

One example is aircraft maintenance firm Adria Tehnika, whose key client is the British air carrier Easyjet.

"We participated in the transfer of a part of their fleet from the British to the Austrian registry last year, but part of the fleet remains registered in the British registry. The question is what this means in terms of customs duties and the license and whether we should seek a special license with the English registry," Adria Tehnika's commercial director Mirjana Tratnjek Čeh illustrated.

All out stories on Brexit are here

10 Apr 2019, 15:53 PM

STA, 10 April 2018 - Hunger for energy resources is almost as old as humankind, but the reasons behind it vary. The first to drill holes in the north-east Slovenia was the German army, and now the efforts to extract gas are driven by greed and the desire to make quick profit, says Delo in Wednesday's front-page commentary.

 

Quick profit is what British investors were promising to all those who wanted to invest in the project of exploiting the reserves of gas and some oil in the south-eastern-most part of the country.

They want to drill another 12 or 24 holes and use hydraulic fracturing to extract the gas and oil.

But people are distrustful. They used to have free gas and jobs, but now foreign investors came who only want profit.

They are using all means available to get what they want, including an agency to persuade the public and decision-makers, the British ambassador and a campaign and threats on social media.

Because of appeals, the procedure at the Environment Agency is slow. The agency has issued a permit for a planned gas processing plant, which will not be built anyway, but not yet a permit for hydraulic fracturing, which people oppose.

"The people have the feeling that the area along the Mura river cannot be seen very well from Ljubljana. Indeed, when it rained heavily in the capital, the area bathed in the sun."

People in Ljubljana are making plans to build dams on Mura and are stepping up pressure to exploit the natural resources in the area, although the people there want a green development.

"The gas that is coming out of the holes on its own is enough, the rest is just greed," Delo says in the commentary entitled ‘Gas for the Profit of a Handful’.

All our stories on hydraulic stimulation in Slovenia are here

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