Business

31 Dec 2018, 12:00 PM

STA, 29 December 2018 - Slovenia's growth momentum is expected to moderate in 2019 amid mounting uncertainty surrounding the global economic outlook. Trade wars are seen as the biggest external downward risk, but there are upward risks in the domestic environment as well.

Trump, Brexit and trade wars

Global risks and uncertainty have been increasing throughout this year, in particular those related to the protectionist policies of US President Donald Trump and the uncertainty about Brexit.

Speaking to the STA, Bojan Ivanc, chief economist at the Chamber of Commerce and Industry's (GZS) Analytics, has warned of the risk of Trump taking measures targeting Europe's car industry, in particular Germany's.

Ivanc believes there is a 50-50 chance for the US and EU to reach an agreement on the issue, but he also says that potential measures would have a major indirect impact on Slovenia, considering the major role that the automotive industry plays in the country's exports.

Given the political confusion surrounding Brexit in the UK, GZS analysts see a 20% likelihood of a repeat referendum or a reversal of the decision to exit the EU.

The likeliest scenario, with a 50% chance, is an interim agreement that would put off answers to key questions about the future relationship into the future. The GZS assessed the odds for a no-deal Brexit at 30%.

Ivanc says that trade wars are a much bigger threat to Slovenia than Brexit because of their impact on the automotive value supply chain and the knock-on effects on transport and construction industries.

The IMF, OECD and the European Commission project global growth to reach about 3.5% in 2019, which is roughly at the level seen this year and the year before.

However, a more pronounced moderation is forecast for Europe's largest economies, including Germany, whose economy is now projected to expand by 1.5% this year and roughly as much in 2019.

Asked how the trends could impact on the Slovenian economy, Ivanc noted that the most recent data on exports remain quite good, but added that some companies at the start of the automotive chain are already seeing a drop in orders for 2019.

Local firms remain optimistic, although lack of staff and wage pressure are concerns

A survey conducted by the GZS among businesses in the autumn showed that most still expected to increase their sales in foreign markets and more than one out of three plan additional hiring while half plan investments.

The key problem for Slovenian businesses today is home-grown, that is a shortage of experienced staff and the related pressure on higher wages and thus higher labour costs.

As a further internal risk factor Ivanc mentioned a slow growth in private consumption. New car purchasing is getting less intensive although it keeps strong, and the number of real estate transactions has fallen in response to an excessive price growth.

Slovenians are mostly keeping their surplus income as savings rather than spending. This could be a cause for concern considering that the contribution of external trade to Slovenia's growth over the next two years is projected to decrease and even disappear.

Ivanc sees domestic demand as an important internal risk to the expected growth in GDP, along with dynamics in the phasing of EU funds, also in connection with major infrastructural projects such as the new Koper-Divača railway.

Slovenia well prepared for a downturn, with construction and consumers likely to drive growth

The GZS believes that Slovenia's resilience to a potential downturn is quite strong, at least within a year or two. Corporate indebtedness is the lowest in a decade and liquidity levels are still high.

Banks are highly capitalised and are financed mostly from domestic savings deposits. Household debts have increased but remain at one of the lowest levels in the eurozone.

Despite this increased resilience, Ivanc would like the government to put in place a suitable and predictable legislative framework that would make it clear on time what it will do when tax revenue drops. He says the government should create sufficient fiscal reserves.

Most of the latest forecasts for the Slovenian economy project growth to slow down from about 4.5% this year to about 3.5% in 2019. Ivanc believes the rate is realistic but also says that surprises are possible in both directions so the interval of growth is between 3% and 4%.

Ivanc says that a positive surprise could come from the construction sector and from Slovenian consumers, who could increase their spending faster than projected.

Meanwhile, the GZS does not see a scope for a positive surprise in the external environment, but rather a likelihood of a slightly more negative scenario, in particular in the automotive chain segment.

31 Dec 2018, 10:05 AM

STA, 28 December 2018 - Prices of shares listed on the Ljubljana Stock Exchange have fallen on average this year with the SBI TOP losing 0.18% in a year. Stock brokers closed EUR 337m worth of deals, which compares to EUR 347m in 2017.

In a release issued on the last trading day on Friday, the management of the Ljubljana Stock Exchange assessed 2019 as a successful year.

It noted that the value of the SBI TOP index exceeded 900 points for the first time in eight years, which it said indicated positive trends on the Slovenian capital market.

The index closed at 805.06 points today, which is 1.46 points or 0.18% down from the last trading day in 2017.

SBI TOP hit the highest value on 6 June at 907.58 points, falling to the lowest point on 20 December at 790.91 points. The shares of NLB bank were included in the index in December.

Trading volumes in 2018 totalled EUR 337.32m, which is a drop of 2.91% compared to the year before. Block trades excluded, turnover amounted to EUR 286.49m, an increase of 17.7% from 2017.

Most of the turnover, EUR 327.69m, was generated in shares, with bonds contributing EUR 9.63m.

The busiest month of the year was May with trading volumes reaching EUR 51.3m, mainly due to the takeover of household appliances maker Gorenje, while NLB's listing as the first new issue in more than a decade sparking an increased interest in Slovenian shares in the autumn.

Stockbrokers closed 38,108 deals this year, 24.4% fewer than the year before. The average value of a deal was EUR 8,852, 28.4% more than in 2017.

The issue of pharma company Krka remained the most active item, accounting for EUR 86.4m or over 25% of the total trading volumes.

Related: Slovenian Blue Chips – the most liquid stocks on the exchange

The shares of chemical company Cinkarna Celje generated EUR 56.47m in turnover, the issue of insurer Zavarovalnica Triglav EUR 43.24m and energy company Petrol's EUR 40.64m.

Of the issues included in the index, the biggest gains were made by those of financial group KD Group (+536.7%), logistics company Intereuropa (+29.94%), insurer Zavarovalnica Triglav (+4.84%) and Krka (+0.52%).

The biggest fallers were the shares of the telecoms incumbent Telekom Slovenije (-28.81%) and port operator Luka Koper (-14.47%).

The total market capitalization of the stock market exceeded EUR 33.366bn. At the end of the year, 67 securities of 41 issuers were included in trading with a total market capitalization of shares of EUR 6.35bn.

This year, eight securities were delisted, while one new share and two new bonds were listed with a total issue value of EUR 1.52bn and two commercial papers with a total issue value of EUR 36.53m.

Gorenje was delisted after China's Hisense became the sole owner of the company, while NLB was listed on 14 November, after an initial public offering at EUR 51.50 per share.

NLB saw almost EUR 3m in volumes on the first trading day and by the end of the year it reached EUR 8.38m with the share closing at EUR 62 today, the highest since the listing and 9.4% above the official listing price.

As regards trading on the new MFT SI ENTER market, 58 securities were listed in 2018, which accounted for EUR 4.725m in turnover. The average daily number of transactions was 2.2, and the average value of each transaction was EUR 8,669.61.

28 Dec 2018, 10:20 AM

STA, 27 December 2018 - The Constitutional Court has annulled the part of the health services act which stipulates that concessionaires should spend the surplus of revenue over expenditure for the performance and development of healthcare. The court agreed this encroached on the legal position of the petitioners and on their right to free business initiative.

The annulment, announced on Thursday, is related to the part of article 3 of the act which regulates the use of surplus generated by private companies and physicians with licenses to perform public healthcare services.

It says that public healthcare service "is being performed as a non-commercial service of general importance in a non-profit way, with the surplus of revenue over expenditure being spent on the performance and development of healthcare services."

The petition for the constitutional review of the act was filed by the Association of Private Practitioners and Dentists of Slovenia at the end of December 2017.

"This is only the beginning of a long period that will see us winning the battle in court and proving to the government that the concepts it advocates are not what the patients or those working in healthcare would deserve," the association's head Igor Dovnik said in response.

The Medical Chamber also welcomed the decision as confirming the provision harmed public services.

The chamber expects the court will also annul other contentious provisions in the act, in particular those limiting the scope of work for young doctors and for doctors employed both in private and public clinics, as well as provisions retroactively affecting already awarded concession licences.

As it received the petition, the Constitutional Court said that the provision limited the concessionaires and directly encroached upon the legal position of the petitioners.

The Constitutional Court said that the introduction in the national legislation of the term non-commercial service of general importance, which is a term in the EU law, did not mean that a public healthcare provider from the aspect of national law is no longer a non-commercial service.

"The term non-commercial public service under the Slovenian law is wider than the term non-commercial service of general importance under the EU law," the constitutional judges wrote.

When the amendments to the act were being adopted in parliament, reservations were also expressed by the parliamentary legal service, which wondered whether the definition of healthcare service as a non-commercial service of general importance was compliant with EU case law.

It had also noted that the Slovenian legal order did not define the term non-commercial service of general importance.

The Constitutional Court also assessed the provision from the aspect of the right to free business initiative, as it stipulates that public service should be non-profit and that surpluses from the operations should be kept in the public service.

"By preventing private entities from using the surplus from the activity for their personal needs, the legislator actually turned them into a non-profit legal form," it added.

"Limiting the freedom to dispose of the surplus very intensively narrows down the field of entrepreneurial freedom of private entities and encroaches upon their business initiative."

According to the court, such a measure is surely in the public interest to provide universal access to public healthcare services, but such an intensive limitation undermines one of the key incentives to perform the concession service.

As the reviewed encroachment upon the human right to free economic initiative outweighs the public benefit from it, the court has annulled the provision.

The association had also challenged article 42 of the act, which deals with the awarding of concessions and says that a concession is not a subject of inheritance, sale, transfer or any other form of legal transaction.

The court has ruled unanimously that the provision is not in violation of the Constitution. It said that a "concession to perform non-commercial public service is a right and not an authorisation in the sense of the law of obligations".

Asked by the STA to comment on the ruling, the Health Ministry said that it would comment once it received and examined the 26-page document.

27 Dec 2018, 10:20 AM

STA, 24 December 2018 – Three years after being acquired by a foreign financial investor, Slovenia's sports goods maker Elan (website) has been sold to the Finnish-owned asset manager KJK. The sale is expected to be completed in mid-2019 once it gets the green light from the Slovenian competition watchdog.

Elan said in a press release on Monday that the owner, Wiltan Enterprises of the financial fund VR Capital, had signed a contract on the sale of the outright stake in Elan to a company owned by the Luxembourg-based KJK Fund III.

The company based in Begunje na Gorenjskem was bought by Wiltan Enterprises from state owners in July 2015 after years of financial troubles, and the owners have been looking lately to sell to a strategic partner.

Since 2015, the outgoing owner Wiltan Enterprises has reinvested almost EUR 10m in Elan, and despite fears of layoffs under the new financial investor, Elan's headcount in fact increased to some 800, CEO Jeffrey Tirman said in April.

Wiltan Enterprises announced the sale this spring as they received expressions of interest after the company, which has been producing sports goods for more than 70 years, posted good results.

The company best known as a producer of skis reported EUR 82.5m in group revenue for last year, an increase of 15% over the year before, as well as an increase in operating profit.

The new owner, established this year with EUR 250m in private capital, is focused on investments in the Balkans and the Baltic states and is already present in Slovenia with investments in several companies.

It belongs to KJK Management, a manager of alternative investment funds, which is also based in Luxembourg and was established in 2010.

21 Dec 2018, 13:20 PM

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.

Related: How to get to and from Ljubljana airport

"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.

20 Dec 2018, 18:00 PM

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".

Related: Slovenian blue chips – the most liquid shares on Ljubljana Stock Market

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.

20 Dec 2018, 16:00 PM

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.

Related: Slovenia’s environment vs foreign capital, corrupt officials and internet trolls

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

Related: Investors claim fracking in Prekmurje would benefit Slovenian gas consumers

20 Dec 2018, 13:00 PM

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.

20 Dec 2018, 11:50 AM

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.

Boštjan Vasle, a 49-year old analyst who wants a systematic, long-term approach

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.

20 Dec 2018, 10:20 AM

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.

18 Dec 2018, 14:28 PM

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).

Related: 1 in 8 residents in Slovenia is an immigrant

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Editorial

Photo of the Week

Photo galleries and videos

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