STA, 28 October 2019 - The National Council unanimously vetoed the government-sponsored bill designed to provide legal recourse for holders of subordinated bank liabilities wiped out in the 2013 bank bailout, with the interest group proposing the suspensive veto arguing that the bill does not regulate the issue appropriately.

Following the veto from the upper chamber of parliament, the bill, which was passed in a 46:34 vote in the National Assembly last week, will now have to undergo a re-vote and get an absolute majority to be confirmed.

The National Council voted 24 votes for and none against to suspend the implementation of the bill, which aims at providing easier access to recourse for up to 100,000 potential plaintiffs, both shareholders and holders of junior bonds wiped out on instruction of the EU.

But it may take a while before the erased investors are compensated as, in addition to the opposition from the National Council, the central bank had announced a constitutional review.

The veto in the upper chamber had been proposed by the interest group representing employees, which argues that the bill does not provide effective recourse, as councillor Maja Lah reiterated at the session today.

The bill relates to the ruling of the Constitutional Court in 2016, which says that the affected subordinated creditors and shareholders did not have sufficient access to recourse under existing legislation.

Involving up to EUR 963 million, the bill has been a controversial topic.

The proponents of the veto claim the government-sponsored bill falls short of what the Constitutional Court ordered.

When it proposed its own version of the bill in April, the upper chamber said that excessive procedural costs would discourage potential plaintiffs from suing the central bank Banka Slovenije.

The National Council argues that the bill fails to address reservations regarding the exclusive jurisdiction of the Maribor District Court in procedures related to disputes under the bill, as well as the issues related to determining court fees.

It believes the bill also does not address the issues related to the protection of personal information of plaintiffs and the issue of out-of-court settlement with the payment of a lump-sum compensation to the former holders of subordinated bank liabilities.

Lah said that Banka Slovenije as the regulator who had insight into all details of the functioning of the banking system had a professional, personnel and information advantage over a typical small investor.

Such imbalance could significantly affect the realistic chances of plaintiffs to be successful in lawsuits, she said, adding that the group was also critical of the intention to incentivise plaintiffs to group themselves by lowering court fees.

"This results in an unjustified differentiation between 30 or more plaintiffs, who would file a lawsuit together and have a joint representative, and other plaintiffs who would not meet conditions to do so," the veto proposal says.

This could also constitute a violation of the right to free selection of the representative, as plaintiffs who want to reduce their costs for court fees would be forced to agree on a single, joint representative.

Arguing against the veto, Finance Ministry State Secretary Metod Dragonja said that the bill was "protecting the taxpayers and budget", noting that potential damages would have to be paid by Banka Slovenije from its reserves.

Regarding the disclosure of personal information of the former holders of subordinated bank liabilities, he said that the public interests superseded their interest, as the funds for damages would be secured from public sources.

The bill envisages lump-sum compensations of up to EUR 20,000 to uninformed investors. "This is a civilised option of out-of-court settlement for those who waive the right to use further legal remedies," Dragonja added.

National councillor Matjaž Gams meanwhile pointed to the alleged overestimation of the shortage in the state-owned banks, estimated at the time at EUR 1.5 billion.

He wondered who would be held responsible for that given the fact that this resulted in money being taken away from holders of subordinated bank liabilities.

In the wake of the collapse of Adria Airways, which at one point cut 60% of Slovenia’s international seat capacity, Ljubljana Jože Pučnik Airport has sets out its priorities when it comes to rebuilding its network. As reported on Ex-Yu Aviation, the airport’s General Manager, Zmago Skobir, said that efforts are now focused on those routes that are more important to the Slovenian economy and tourism industry, namely Frankfurt, Zurich, Munich, and Brussels, with Vienna seen as important but more difficult to arrange. Destinations in the former Yugoslavia are less likely to be resumed.

Looking to new markets, Mr Skobir continued to express hopes that direct flights to the Arabian Peninsula would be launched, although noted that efforts in this regard have already lasted six years.

Dobrodošli v Sloveniji! Lufthansa’s first time ever to fly to Ljubljana. With @FlySWISS & @FlyingBrussels we open 34 weekly connections to the beautiful capital of Slovenia. Discover unspoiled landscapes with mountains, lakes & Adriatic coast. ⛰? @visitljubljana @SloveniaVisit pic.twitter.com/T9sSehP564

— Lufthansa News (@lufthansaNews) October 28, 2019

All our stories on Adria are here

STA, 28 October 2019 - The Slovenian Bank Association said on Monday that the pending new consumer lending restrictions would have wide ramifications if the state failed to provide alternative financing sources. Assessing lending will drop by EUR 70m a month, it said more than 300,000 people would be left without access to loans and that growth would suffer too.

According to the Bank Association's calculations, the restrictions mean the end of access to credit for 213,000 pensioners with pensions of under 700 euro, meaning 57% of all pensioners, for 114,000 or 20% of all workers, who have net wages lower than EUR 928 and have a dependent child, as well for between 10-25% of workers with higher wages.

The restrictions, announced by Banka Slovenije for 1 November as a result of what the central bank assessed as unsustainable consumer lending growth, introduce maximum 84-month maturity for consumer loans.

They moreover include loan-to-value ratios (loan payments relative to the client's annual income) of under 50% for clients with monthly income of up to twice the gross minimum wage and of under 67% for those making more than that.

What is more, the borrower will have to be left with at least 76% of the gross minimum wage after paying the monthly instalment or more if they have a dependent family member.

The same loan-to-value ratios will also become obligatory for housing loans.

The Bank Association argues the restrictions will have wide consequence if the state fails to provide alternative financing sources.

"We asses that lending will drop by EUR 50-70 million a month or EUR 600-740 million a year, which also entails lower retail consumption as well as the purchases primarily of 'used' flats, which in turn is also reflected in lower VAT revenue for the state," the association wrote, adding GDP growth would probably be affected too.

"It is hard to assess the effect precisely, since some of the consumers will likely also opt for borrowing on the 'grey' or unregulated market, which is not transparent. This could also mean them paying much higher costs, while at the same time being exposed to risks and different kinds of debt collection rules," the press release also says.

The association especially took issue with the inclusion of costs related to the clients' dependent family members. While agreeing this also needed to be considered, it disagrees with the explicit nature of this cost in the restrictions, arguing banks had already been factoring this into living expenses.

Listing a few examples from its calculations, the association for instance said that a couple with two dependent children, an average wage and without any existing credit liabilities would be able to take out a consumer loan of no more than EUR 11,500 for a maximum period of seven years and a 20-year housing loan of no more than EUR 30,000 each. No additional borrowing would be possible after that.

STA, 25 October 2019 - The entire management board of energy group Petrol resigned Thursday night "by mutual agreement", capping a day of intense speculation about its fate amidst what media reports describe as a politically-motivated struggle to control one of Slovenia's largest companies.

Long-serving chief executive Tomaž Berločnik stepped down alongside board members Rok Vodnik and Igor Stebrnak, over what Berločnik told the press were "differences in views on strategy" with the supervisory board.

This was today confirmed by chief supervisor Nada Drobne Popović, who said in a release "the management and the supervisors had a significantly different view on the implementation of the adopted strategy".

The company will be led in the interim period by Drobne Popović along with director of strategic cost management Denijela Ribarič Selaković. Also saysing on is the board member representing workers.

The move came after a supervisory board session that had not even been announced; when first speculation appeared yesterday morning, Petrol even went as far as issuing a press release saying the management had no knowledge of a supervisory board session taking place.

Drobne Popović later said the session had been an extension of a previous supervisory board session.

Media were abuzz with speculation about the true reasons for the overhaul at the top of Petrol.

Public broadcaster TV Slovenija thus reported the management and supervisors clashed over a bond issue necessary for the takeover of three energy firms in the Balkans.

And the business daily Finance reported "problems with a project that would significantly alter the image of Petrol" as the cause, though it also suggested this was a cover for what was in fact a politically motivated replacement.

This possibility was also raised by the Manager Association, which issued a statement prior to the resignation warning against replacing a successful board.

"By bringing down a successful management team, those who want to replace them - politicians in power - would send the indirect message that they do not care about social prosperity and the fate of Slovenia's largest company."

It said it was "strongly against a political replacement of the management board as well as political games which all too often damage the economy and society".

It also pointed to the importance of stability and predictability of the business environment and of good corporate management for companies.

The association moreover believes yesterday's decision made no sense in particular in the light of Petrol positive results.

Meanwhile, the Slovenian Directors' Association expressed surprise over the management overhaul, saying that such an extreme step was usually justified.

"A justified reason must exist; if it does not, then this is careless actions," Irena Prijović, the association's executive director, told the STA on Friday.

She could not comment on whether the move was political, but added that if indeed it was, that would be unacceptable.

Chief supervisor Drobne Popović rejected claims she had acted on behalf of political actors and said she had not consulted any politicians.

Prime Minister Marjan Šarec wrote on Twitter yesterday afternoon, before the resignation was announced, that the notion his party wanted to replace the Petrol management was "one of the biggest pieces of disinformation recently".

The government discussed the step at today's correspondence session and called on Slovenian Sovereign Holding (SSH), the state asset custodian, to provide detailed clarification of the circumstances of the resignation by 4 November.

Earlier today, the opposition New Slovenia (NSi) requested an emergency session of the parliamentary commission on public finances to discuss corporate management at state-owned companies and political staffing.

The party also proposes that the Commission for the Prevention of Corruption investigate possible corruptive means in resignation or appointment of state companies' management and supervisory boards.

Berločnik was named chief executive in February 2011, when Petrol was reeling from a financially disastrous attempt to take over rival Istrabenz, and his second five-year term would have ended in 2021.

He is credited with transforming a traditional fuel retailer into an all-round energy group with a strong electricity division and increasing clout in retail.

Less than a month ago, the Manager Association named him the manager of the year.

Petrol has been going strong. It saw its sales revenue rise by 15% to EUR 2.73 billion in the first six months of the year, with net profit up by 4% to EUR 40.7 million from the same period in 2018.

For those wondering how Slovenia plans to deal with an aging society and a shortage of medical staff and care workers, a recent story in The Philippine Star may provide an answer.

The Filipino Department of Labour and Employment has announced that Slovenia is looking for from 2,000 to 5,000 skilled and semi-skilled workers to move to Europe and address labour shortages in the country. The positions that would be open to Filipinos in the deal, which has yet to be signed, are expected to include healthcare workers, nurses, engineers, truck drivers, heavy machine and equipment operators, household service and staff in other industries.

Filipino Labour Secretary Silvestre Bello III said that a technical working group still needs to negotiate the terms of the agreement and ensure the protection and safety of the workers, which would take around three months. The exact jobs and qualifications will then be announced, but the latter will certainly include proficiency in the English language.

More details can be found here.

STA, 22 October - Parliament backed on Tuesday legislative changes that raise the minimum net hourly rate for student work from EUR 4.13 to EUR 4.56. The opposition Left, which initiated the raise, had been pushing for more, but failed to get support from the coalition and remaining opposition parties, which fear businesses may have trouble handling the new rate.

After the minimum rate for student work, a flexible labour form much sought by employers, was first set only in 2015, the Left made additional regulation one of its conditions for its support to the minority government.

The party put forward its own proposal for changes to the fiscal balance act in July, proposing that the minimum gross rate be raised from EUR 4.89 to EUR 5.90.

The Left later lowered the figure to EUR 5.63, saying this was a compromise reached in negotiations with the coalition, only to see the coalition members of the Finance Committee reduce it further to EUR 5.40 or EUR 4.56 net.

Although voting in favour, coalition MPs also seemed reluctant to back the final figure in today's plenary vote, with Aljaž Kovačič of the senior coalition Marjan Šarec List (LMŠ) for instance arguing the raise - which will take effect on 1 January 2020 - could lead to more undeclared work and actually harm the students.

Soniboj Knežak of the coalition SocDems also argued more focus should be put on inspections "as opposed to measures that could destroy student work" and Mojca Žnidarič of the coalition Modern Centre Party (SMC) criticised the Left for drawing up its proposal without consulting the ministry.

The opposition National Party (SNS) party voted in favour, arguing the raise was only symbolic, New Slovenia (NSi) said it would not oppose the raise while warning the rate needed to calculated so as not to disrupt the market, while the Democrats (SDS) said they could not support it but would also not oppose it.

"For many companies, especially those outside of central Slovenia this means a substantial additional cost. It could happen that this will lead to significant decree in the amount of student work," the SDS's Suzana Lep Šimenko said.

The Left's Miha Kordiš begged to differ, arguing the competitive edge of student work lie not in the hourly rate but in its flexibility. He also called for a comprehensive plan that will make sure "no student's mere survival will depend on them accepting underpaid and indecently precarious labour".

STA, 23 October 2019 - The receiver of the company operating the Adria Airways flight school published on Wednesday a call for bids for what is a subsidiary of the German-owned Slovenian flag carrier Adria Airways, which was sent into receivership along with its flight school on 2 October.

According to the business daily Finance, the main asset of Adria Airways Flight School is a valid ATO (Approved training organisations) licence, which would enable a potential buyer to continue training candidates for pilots.

Until 25 November, receiver Blaž Poljanšek will be collecting bids for the entire company, for the leasing of two PS-28 Cruiser aircraft by Czech Sport Aircraft and for the use of the FNPT II flight simulator.

Poljanšek told Finance that several candidates had shown interest in buying the licence and that he was checking how much interest existed officially through the call for bids.

He explained that the receivership had interrupted the training of around 30 pilot candidates.

Adria Airways Flight School recorded EUR 315,000 in sales revenue in 2018, down roughly 20% on 2017. The net loss amounted to EUR 339,000 in 2018 and to EUR 171,000 in 2017.

All our stories on Adria are here

STA, 22 October 2019 - Virs, a supplier of welding and cutting solutions, won on Tuesday the annual Golden Gazelle Award for the fastest-growing company in Slovenia, conferred by the newspaper publisher Dnevnik.

The Lendava-based firm, established 15 years ago, has developed in into a highly specialised company in the field of automation and robotisation in welding and cutting.

Its revenue increased almost fourfold in the last five years to reach EUR 8.2 million last year, Dnevnik pointed out.

Virs's added value per employee amounted to EUR 67,945 last year, the company has an AAA credit rating, is paying above average wages, it has a registered research team, its solutions are facilitating the development of manufacturing companies in Slovenia, while the company is also competitive on foreign markets.

The Silver Gazelle Award went to Cerknica-based Alpod, the largest distributor of floor coverings in SE Europe, and the Bronze Gazelle to printed circuit board assembler MI Elektronika from Brezovica.

The Gazelle Award project was launched in 1991, and was upgraded with six regional competitions and the national competition in 2001.

Last year, the main award went to wood processing machinery maker Mebor from Železniki.

Ex-Yu Aviation reports that Lufthansa is not interested in working with the Slovenian government to develop a new national carrier. It’s understood that the German firm expressed its lack of interest several weeks ago, leading to a visit to Frankfurt last week by the Slovenian Minister for Economic Development and Technology, Zdravko Počivalšek. While the minister obviously failed to make a case for Lufthansa setting up a new carrier – which, under the Slovenian plans would have launched in early 2020 – Lufthansa is among several airlines now adding new services to Ljubljana is the wake of Adria Airway’s collapse.

Related: Adria Collapse Cut 60% of Slovenia's International Seat Capacity

Adria’s bankruptcy came after having been bought by 4K Invest, a Munich-based, Luxembourg-registered investment fund. 4k Invest’s only previous experience in owning an airline was gained with Switzerland’s Darwin Airline, which the fund rebranded as Adria Airways Switzerland before the carrier entered bankruptcy proceedings. The Swiss authorities are currently investigating 4K Invest’s role in the collapse, with accusations bankruptcy fraud and mismanagement.

All our stories on Adria Airways are here