STA, 21 December 2018 - Fraport Slovenija, the operator of the country's biggest airport, will log a record number of passengers this year, managing director Zmago Skobir told the STA in an interview.
When German airport operator Fraport acquired the state-owned Aerodrom Ljubljana in 2015, it promised to invest in infrastructure, development and jobs, and it has been delivering on its promise ever since, Skobir said.
"Ever since Fraport's arrival, the company's development and operations have skyrocketed. In 2014, we recorded 1.34 million passengers and EUR 32m in operating revenue. By the end of this year, we will have served 1.82 million passengers."
The number of passengers travelling through the Ljubljana Jože Pučnik Airport increased by 8.5% compared to 2017, but the increase was even higher in the previous two years, said Skobir.
Moreover, the number of employees went from 400 at the time of the takeover to 482 at the moment. The company also additionally hires temps when the need occurs, he said.
Fast growth also brings a variety of challenges, with Skobir saying that the company faced lack of staff, which was also overburdened.
"But we are aware that people are the key element in the services sector. A beautiful new terminal means nothing if the staff is unkind and unprofessional."
"We invest a lot to make our staff happy. This year, we will set up a pay system, also raising salaries by 15%. We are also looking for new staff. We are an attractive employer but the training takes a while and we aim to keep the staff, we want them to feel good here."
When asked about the reasons for strong growth, Skobir said that there were several, the main one being Slovenia becoming an increasingly popular destination.
Moreover, the airport has sufficient infrastructure to handle the increase in traffic and can respond with a good quality service at a competitive price. This is important because it is competing for travellers and airlines with six other airports nearby.
Adria Airways has made a considerable contribution to this because it is trying to restructure its flight network since it got a new owner, according to Skobir. He also expressed satisfaction that the airline has been doing well after ten years of struggles.
"But we'll see what will happen in the future. So far, cooperation has been exemplary and we expect the planned recapitalisation and other plans to go well."
"But it would not be the end of the world for the airport and Slovenia's connectivity in case of a different scenario."
When asked about the trends in aviation and expectations for the Ljubljana airport, Skobir said the airport will likely follow the upward trends expected throughout the industry. However, the strong growth will taper off and become more stable.
When asked whether the company was prepared to face the next economic crisis, which is expectedly around the corner, Skobir said the key was to invest in infrastructure, equipment, organisation and employees when the going is good.
"Fortunately, we have a strategic owner who operates more than 30 airports and understands investment cycles. All of the profits and accumulated assets... go into infrastructure, ensuring stable and steady returns over a longer period."
The airport operator is currently getting ready to start construct a new terminal. If everything goes according to plan, construction will start in the spring and be completed by the end of 2020, about half a year before Slovenia will assume the EU presidency in the second half of the EU.
Skobir is moreover happy with the development of the airport city, saying that a lot had happened in the past two years, since the local authorities gave the go-ahead to develop some of the land near the airport. He expects the airport city to be completed in the next three to five years.
STA, 20 December 2018 - Ljubljana Stock Exchange has had a diverse year as several companies, including household appliances maker Gorenje, were delisted. On the other hand, Slovenia's largest bank NLB went public in November. The overall trend has been somewhat bullish, as the SBI TOP index added 3.52% by the end of November.
The delisting of Gorenje, the blue chip that was acquired by Chinese Hisense earlier this year, as well as those of companies Mlinotest, Sivent, Zdravilišče Rogaška and Tovarna Olja Gea, was decried as bad news for the Slovenian capital market due to limited choice.
"We want more listings with every passing year, not fewer. It is key for the further development of the Slovenian capital market," said Aleš Ipavec, the chairman of the stock market operator LJSE.
"Development should be in the interest of all business and political stakeholders, because a developed capital market addresses many issues, including those in public finances and social affairs. These are indisputable facts in a modern market economy," he added.
Nevertheless, "trading at the Ljubljana Stock Exchange can be assessed as successful, and November IPO of NLB has certainly livened up the atmosphere".
The inclusion of NLB shares in the SBI TOP blue chip on 12 December will certainly "contribute to further growth in trading and to the interest in the stock of Slovenian public companies," Ipavec added.
NLB shares were listed on the stock market on 14 November, with turnover nearly hitting EUR 3m on the first day, but it has slowed down since. The share, which was privatised through the initial public offering (IPO) at EUR 51.50 per share, has traded at between EUR 53.10 and EUR 59.90 between 14 November and 12 December.
Looking at the price range, Urban Belič, a board member at brokerage Ilirika, said that a realistic price of the share "will depend on the bank's performance and the situation on financial markets".
Overall, Belič says that trends on the stock market can be divided into two periods this year. "At first we witnessed optimism of stock market players and gradual growth in share prices and turnover at the Ljubljana Stock Exchange.
"Then, after contentious statements by the Left and a deterioration on foreign stock markets we witnessed a decline in share prices and a significant drop in turnover," he said in reference to the Left's wishes to include capital and rent gains in personal income tax calculations.
"Recently, turnover has significantly dropped and has been below figures from previous years. Above all, we see a decline in major domestic and foreign institutional buyers," he added.
Turnover topped EUR 307.4m by the end of November, which compares to EUR 347.4m in the entire 2017. Market capitalisation of listed companies stood at EUR 6.3bn at the end of November, up from EUR 5.27bn at the end of 2017.
Ascent Resources, the UK-based firm involved in a four-year and sometimes heated dispute over permits for a fracking and gas-processing plant in Petišovci, Prekmurje, is about to raise the stakes with the threat of legal action against the Slovenian government. One recent issue in the case was a number of abusive emails that were sent by people claiming to be Ascent Resources investors to ARSO and the Environment Minister, a matter that is now receiving police attention in Slovenia.
Speaking to London South East, CEO Colin Hutchinson said that while Slovenia remained a high risk environment for foreign investors he was hopeful that the two permits needed for the project to go ahead would eventually be granted by the Slovenian Environment Agency (Agencija Republike Slovenije za okolje, ARSO).
You can see London South East’s interview with Mr Hutchinson below in which he discusses the emails, fracking, the possible legal action the firm may take, and his hopes for the future
STA, 19 December 2018 - The Grand Chamber of the European Court of Human Rights (ECHR) will examine the case brought by Slovenia against Croatia over the defunct bank Ljubljanska Banka (LB), the court said on Wednesday.
In the application lodged on 15 September 2016, Slovenia argues unfairness, a lack of impartiality and discrimination by Croatian courts in proceedings brought by LB to collect debts owed by Croatian companies.
The Strasbourg court said that the ECHR Chamber, which had been allocated the case, now relinquished jurisdiction in favour of the Grand Chamber, comprised of 17 judges.
Jurisdiction is relinquished to the Grand Chamber only exceptionally. Under Article 30 of the European Convention of Human Rights this may happen when a case raises a serious question affecting the interpretation of the Convention or its Protocols, or where the resolution of a question before the Chamber might have a result inconsistent with a judgement previously delivered by the Court.
A response by the Government Communication Office indicates that the Grand Chamber is to first decide on the admissibility of the inter-state case.
Slovenia's high representative for succession Ana Polak Petrič hailed the decision, but said that it did not come as a surprise and that given the weight of the arguments presented by Slovenia in the inter-state case "we believe the application needs to be examined by the Strasbourg court's Grand Chamber".
She told the STA that the decision meant that the case would be heard and that Slovenia would have an opportunity to set out its arguments, possibly even in an oral hearing.
Polak Petrič expects the procedure to take several years. "Inter-state cases take their time, considering broader aspects involved. Countries also take their time to present their arguments, and nor is the damage claim simple. It concerns 48 cases from the 1990s in which Ljubljanska Banka claimed debts in Croatian courts".
In the application, Slovenia alleges that Croatia's judicial and executive authorities have illegally prevented LB from recovering debt from Croatian companies incurred in the 1990s through their systematic and arbitrary conduct, thus violating European law originating in the European Convention of Human Rights.
On brining the case, the then Justice Minister Goran Kelmenčič explained that such conduct on the part of Croatia put Slovenia in an unfair and unenviable position, considering the country had to repay the savings deposits held by Croatian clients of the LB Zagreb branch under the 2014 ECHR judgement in the Ališić case.
On the other hand, he said that Croatia had done everything in its power over the past 25 years to prevent LB to collect debts owed by Croatian companies.
Klemenčič explained that LB was the biggest bank in the former Yugoslavia and that the Zagreb subsidiary had financed Croatian companies, enabling them to function and develop. "Loans from LB created positive effects on the Croatian economy."
Since the debtors (Croatian companies) after the break-up of Yugoslavia failed to settle their debts to LB stemming from loans and guarantees granted after 1980, LB and its Zagreb subsidiary launched enforcement proceedings before Croatian courts between 1991 and 1996.
There were more than 80 such proceedings, and they were worth millions, the minister stressed, adding that in 25 years LB had managed to enforce through Croatian courts only EUR 700,000.
Klemenčič said that the lawsuit contained proof that the "Croatian executive directly interfered with the functioning of the judiciary, prevented enforcements, while the judiciary in Croatia changed the case law and prevented LB from successfully enforcing their legitimate claims to Croatian companies".
In the wake of the 2014 ECHR judgement in the Ališić case, Slovenia examined 81 suits brought by LB in Croatia, finding that in 26 the cases the European Convention of Human Rights had been violated.
Polak Petrič said that since Slovenia lodged its application with the ECHR, the number of cases in which Slovenia detected direct violations of the Convention had increased from 26 to 48.
Court proceedings in Croatia are slowly coming to an end and every case in which the judgement becomes final is included in Slovenia's application in support of the case.
Polak Petrič said that the damages claimed by Slovenia from Croatia had increased from EUR 360m to EUR 430m.
The Slovenian government alleges multiple violations of Article 6 of the Convention with respect to the right to a fair trial, equality before the law, right to enforcement and trial within a reasonable time.
Slovenia also alleges violation of Protocol No. 1 to the Convention concerning peaceful enjoyment of possessions.
The Foreign Ministry also commented on the issue today for the STA, saying LB had only been able to secure a tiny fraction of the claims to Croatian companies.
Croatian courts on average needed more than 15 years to reach final decisions in the matter, while in some cases the procedures dragged on for more than 22 years, the ministry wrote.
Slovenia expects that following the decision on the LB savers, the ECHR will also find a just solution as regards the rights violations suffered by the bank, it added.
STA, 19 December 2018 - MPs appointed economist Boštjan Vasle central bank governor in a 51:28 vote on Wednesday. Vasle, who will be the fifth governor, will succeed Boštjan Jazbec who left Banka Slovenije for a new job in April. Vasle needed to secure at least 46 votes in a secret ballot in the 90-strong legislature.
Vasle served as the director of the government's macroeconomic think-tank IMAD for eleven years. When he laid out his bid in a public presentation in early December, he stressed his commitment to have Banka Slovenije operate as an open institution.
He has called for effective coordination of policies as economic growth is about to cool off and for the EU banking union to be completed as soon as possible.
While he emerged as the surprise frontrunner for the post after it became clear that other candidates would not get an absolute majority in parliament, the outcome of the vote had been unclear until the very end.
In the debate before the vote, Vasle appeared to have secured the votes of MPs from the Modern Centre Party (SMC), Social Democrats (SD), Alenka Bratušek Party (SAB) and the Pensioners' Party (DeSUS), which have a total of 30 MPs between them.
SAB deputy Maša Kociper said that he had not been the party's first pick, but once economist Igor Masten was out of the game, the party had to choose among the others, with Vasle coming out as a very good candidate.
However, Vasle was not backed by the Marjan Šarec List (LMŠ), the biggest coalition party, whose deputy group head Brane Golubović said he had never been their pick.
Likewise, the Left, the minority government's partner in the opposition, refused to back the candidate whom Luka Mesec, the leader of the Left, described as an advocate of neoliberal policies.
According to Mesec, Vasle sees the world "through the eyes of a capitalist and not a worker". The party also said that he had failed to distance himself from the actions of previous governors.
"Two governors of the past ten years are to blame for the banking hole and its tackling just as much as the governments," Mesec said in reference to the 2013 bank bailout.
The conservative opposition, the SDS, New Slovenia (NSi) and the National Party (SNS) had not disclosed in the debate whether they would endorse Vasle or not.
Banka Slovenije has been without a governor since April, when the former boss, Boštjan Jazbec, left for a job on the EU's Single Resolution Board. The central bank has since been led by acting governor Primož Dolenc, who failed to get appointed full-fledged governor in October.
Vasle will become the fifth central bank governor, following in the footsteps of Jazbec, Marko Kranjec, Mitja Gaspari and France Arhar.
STA, 19 December 2018 - Economist Boštjan Vasle, 49, is coming to Banka Slovenije as the fifth governor of the country's central bank, having led the government's macroeconomic forecaster IMAD for eleven years. He is considered an independent expert and has largely kept out of the public eye.
Vasle started his career at the Finance Ministry after graduating from the Ljubljana Faculty of Economics in 1994.
He earned a master's degree in monetary policy from the Central European University in Budapest in 1997 before getting a job at the Institute of Macroeconomic Analysis and Development (IMAD) as analyst in 2000.
In 2007, the Janez Janša cabinet appointed him IMAD director. He worked for IMAD until a month ago, when the Marjan Šarec government relieved him of his duties as acting director in a sign that he was a serious candidate for governor.
During his 18-year stint at IMAD, he briefly worked in 2006 for the Government Office for Development, which brought together several up-and-coming economists.
As IMAD director, Vasle has been involved in several key economic challenges, such as a programme to reduce inflation, Slovenia's eurozone integration and a programme of structural measures to address the recent economic crisis.
He has worked with all major decision-makers in Slovenia and with international institutions, such as the IMF, EU and European Central Bank. He is also a member of several expert boards in Slovenia and abroad.
The new governor is known for his systemic approach and communication with the public, which he also highlighted as a priority in running the central bank.
"Banka Slovenije must build its positions on expertise and present them publicly, not just within the eurozone, but also to the broader public, experts, politicians and the general public," he said when he presented his bid at Presidential Palace in early December.
He believes that as the supervisor of the banking sector, Banka Slovenije should not only monitor banks' operations but also work closely with other stakeholders in the sector.
Vasle also called for completing the EU's banking union and for the eurozone to reflect thoroughly on how to phase out unconventional monetary measures which had been needed to address the negative consequences of the recent crisis.
In his spare time, Vasle is an enthusiastic runner. "Running has been my most important sport over the past 30 years," he told a men's magazine a while ago.
He is trying to use some of his running experience at work. "If we treated economic problems as long-term challenges, our macroeconomic picture would definitely be better," he said at the time.
Vasle will replace Governor Boštjan Jazbec, who left for a high-profile job in the EU at the end of April, taking over from Vice Governor Primož Dolenc, who has led the central bank as acting governor in the meantime.
STA, 19 December 2018 - Presenting Banka Slovenije's latest Macroeconomic Projections and Financial Stability Review publications, acting governor Primož Dolenc said on Wednesday that Slovenia's financial system was healthy. "Banks' profitability is currently very favourable, but some income risk exists in the mid-term," he told the press.
Dolenc, who called on banks to seek new sources of net interest and non-interest income, said the risk is compounded by a substantial share of the banks' profitability remaining the result of the easing of impairments and provisions.
Tomaž Košak of the central bank's financial stability and macro-prudential department illustrated that the banks generated EUR 422m in pre-tax net profit in the first nine months amid 3.6% year-on-year growth in net interest income. The easing of impairments and provisions contributed EUR 41m.
"Were the banks to form provisions at the level of the long-term average today and the provisions accounted for 23% of gross income, the profit would be halved to EUR 180m and return on capital would fall from 12% to 5%," he said.
Concerns about an overheating housing market
While general risks to the financial system have remaining similar to those in the middle of this year, they have increased somewhat on the housing market.
"We estimate that the prices on this market are growing today because supply is failing to keep up with demand, meaning it is not consequence of excessive bank lending," Dolenc said, while asserting the current developments were not a danger to the banking system, which was well capitalised and resistant to potential shocks.
Košak highlighted strong growth in real estate prices in the last two years in particular in Ljubljana, Koper and certain tourist centres. Housing prices went up by 10% last year and by 13.4% in the first half of this year, which is the biggest increase in the eurozone.
"We are currently not talking about overheating, but any further price increases will start leading to the market overheating," he said.
The growth of housing loans to households was moderate and stable this year and lending standards are relatively high.
This was the case with consumer loans though, which is why the central bank recommended in November that retail banks impose stricter conditions.
Meanwhile, the quality of banks' portfolios has also improved, with exposure to non-performing loans falling to 4.5% by September.
"Some banks are still dealing with exposure dating back to the crisis, which is why we stress the need for them to make use of the favourable business conditions to restructure their portfolios," Košak said.
STA, 18 December 2018 - The number of jobs created in Slovenia increased to 885,700 in October with one in ten of the jobs filled by foreigners, fresh data from the Statistics Office show.
The number of people in employment in the country increased by 0.9% from November and by 3.2% on the same period a year ago.
More than half of those in jobs were men, their number rising by 0.8% from September to 486,600. The number of employed women rose by 1% to 399,000.
Manufacturing created most new jobs, the number of those employed there rising by 4.1% to over 8,000.
Almost 10% of all people in employment in Slovenia were foreigners. Their number rose by 19.5% in a year to 87,700. This is up 2% from September.
Most foreigner workers were from Bosnia-Herzegovina (42,600), Serbia (10,800), Croatia (7,500), Kosovo (7,100) and Macedonia (6,000).
Most were employed in the construction industry (23,400), manufacturing (20,300) and in transport and storage (14,800).
STA, 17 December 2018 - Swiss group Kuehne + Nagel inaugurated on Monday one of its largest pharmaceutical logistics centres near Ljubljana's international airport. The 88,000 square-metre complex, which was launched earlier in the autumn, has almost 38,000 square metres of warehouse space.
Kuehne + Nagel did not reveal which company it is servicing, but it is known this is Swiss multinational Novartis, for which this is the largest warehouse in Europe and one of the largest in the world.
The centre is designed for storing and distributing end products and materials for the pharmaceutical industry around the world. Drugs from it travel to 120 countries around the world, mostly by sea and land, but some also by air.
The centre is currently operating at some 70% of its capacity, but should be in full swing by the end of March.
As the Swiss logistics group expects further growth in Slovenia, it has already started building a new high-tech distribution centre nearby.
The centre will be built in three stages, with the first one encompassing some 4,500 square metres of warehouse areas.
Since it does not require controlled temperature and humidity, it is seen as less demanding than the pharmaceutical complex.
Borut Vrviščar, the CEO of Kuehne + Nagel Slovenija, did not want to disclose the value of the investments as he addressed reporters today.
But he did say the group's Slovenian subsidiary planned two-digit growth as well as growth in the number of employees.
There are currently 180 employees working in Brnik, but the figure is expected to rise to around 250 by the end of 2019.
Hansjoerg Rodi, regional manager at Kuehne + Nagel Europe, said that well-trained and motivated staff made Slovenia a good market for investments.
He explained Kuehne + Nagel had decided to invest in the Brnik facility because of a certain deal, but the group now saw new opportunities for growth in the pharmaceutical industry and in other areas, so it kept investing.
Meanwhile, Vrviščar said a new logistics centre Austria's Cargo-partner is building near Kuehne + Nagel's complex was no direct competition as the Austrians were involved in a different segment of the logistics industry.
However, he said they would all benefit from the Slovenian government building a rail link to Ljubljana's Jože Pučnik Airport.
Kuehne + Nagel's new facilities are built by Austria's developer Invest4See and then rented by the Swiss logistics group.
STA, 13 December 2018 - Following a longer period of stable prices, several power and natural gas companies in Slovenia increased their prices this autumn in response to growing energy prices on foreign energy exchanges.
Wholesale energy prices on foreign markets have been growing for a while due to the economic and political situation and increasingly expensive CO2 emission coupons.
Monitoring energy prices in Slovenia, the Consumers' Association (ZPS) said some half a dozen companies had increased electricity prices and a dozen of them increased natural gas prices.
The uniform electricity tariff rose by an average 15%, the higher tariff by 12% and the lower one by more than 17%, according to the consumer watchdog.
The prices of natural gas for end-users have increased somewhat less, by an average 10%, ZPS data shows.
The electricity bill for households receiving power from Elektro Primorska's subsidiary E3 has been higher by an average EUR 2.50 or 4.9% since September.
E3, which said the Slovenian electricity market had been "very dynamic" since mid-2017, previously increased the electricity price a year ago, while it sets it on an individual basis for large business customers.
The company told the STA that electricity prices in Slovenia were largely under the influence of price trends in the neighbouring countries.
The price of electricity on the Hungarian HUPX power exchange rose by slightly less than 30% in the January-October period, peaking at EUR 64.30 per megawatt hour in September, "which was also a record value in the last ten years", it said.
Elektro Maribor's Energija Plus increased its electricity prices in October, by an average 5.9% for business customers and by 6.6% for households.
The distributor said that since September 2017, the price of megawatt hour of electricity on the European EEX energy exchange to be supplied in 2019 and 2020 had grown from EUR 30 to EUR 60. "This year alone, it rose by more than 45%."
While Gen-I is not planning a rise for households, RWE has not yet taken the final decision, but said electricity prices had been constantly rising across Europe over the past 18 months.
The company told the STA the prices on the German energy exchange had doubled to reach the highest level in five years, adding the main reason behind the trend was the changed rules governing trading in CO2 emission certificates.
As for natural gas, Energija Plus said the prices had been rising since September 2017, with a megawatt hour of natural gas for supply in 2019 rising from EUR 17 to more than EUR 24 over the past year.
Petrol and diesel prices in Slovenia have also been affected by prices on foreign markets, with administered prices of regular petrol and diesel reaching in October the highest level since June 2015 and November 2014, respectively.
The same month, diesel was more expensive than regular. However, since then, the prices have been dropping to reach the levels from the beginning of the year.
Meanwhile, a litre of heating oil has risen to reach an average EUR 0.965 in the third quarter of the year, up from an average EUR 0.768 in the same quarter in 2017.
STA, 13 December 2018 - Natural gas will be a major part of energy supply in Slovenia in the future and domestic production would greatly increase the reliability of supply, heard participants of a Thursday's event dedicated to energy.
Noting that natural gas plays a generally positive role in the EU's energy transition to meet climate goals, Jurij Vertačnik of the Ministry of Infrastructure said that establishing competitive domestic production would be positive for the country, which currently relies almost exclusively on gas imports.
It is however true that the required infrastructure will have to be adapted for other energy sources in the future, which entails certain technical as well as regulatory challenges, he acknowledged.
Petišovci gas well a missed opportunity
There is a gas well at the Petišovci field in the north-east of the country, but its potential is not utilised, said Miha Valentinčič, the head of Geoenergo, the Slovenian partner of UK's Ascent Resources which is exploring the gas field.
According to him, there has been a lot of intentional deception with regards to the project since 2011 that has slowed down the project.
"We're trying to conclude as soon as possible the procedures that are under way, including obtaining the necessary permits to maintain current production and to connect to the Slovenian network," he said.
Part of the gas pumped out at the Petišovci field is sold to local industrial partners and the rest to Croatian energy company INA, which built a connection to the nearby Zebanec gas field last year.
The UK firm has been trying to get the permits for some time now and has been in conflict with the Slovenian authorities because of a review of the procedure to obtain the permit to use hydraulic stimulation at the Petišovci field.
According to Miloš Markič of the Geological Survey, low-volume and high-volume fracturing should be distinguished, with the former allowed in most countries and the latter prohibited in Europe due to the population density.
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.