STA, 11 February 2019 - Magna Steyr, the Austrian car industry supplier, might delay the launch of its new paint shop in Slovenia due to uncertainty over an environmental permit that has been bogged down due to appeals by a green NGO.

The EUR 160m plant in Hoče, south of Maribor, is ready for launch. A test run was scheduled to begin this month and the plant was expected to fulfil orders that Magna Styer's main production facility in Graz can no longer handle.

But the company told the STA Monday it had started organisational preparations to carry out the contracts in Graz, although it was also hopeful a solution could be found to launch the Hoče plant quickly.

The news comes just days after the Environment and Spatial Planning Ministry rejected an appeal against the environmental permit for the paint shop filed by the Regional Environmental Association of Environmentalists (ROVO), a local NGO.

The organisation has said it will press ahead and challenge the rejection in court, which means it could theoretically take months or even years before the courts have had their say.

ROVO objects to the plant having been built in a water protection area and has said the government could deal with the matter simply by changing the special law it adopted for the investment to specify that it is permitted to build such facilities in water protection areas.

The government has not responded to the idea yet beyond the Economy Ministry saying that a meeting with ROVO was planned in the coming days, after Environment Minister Jure Leben returns from a visit to Finland.

University, unions and others support the plant

The environmental NGO has come under heavy fire from multiple stakeholders in the region, including the local authorities, regional chamber of commerce, the University of Maribor and the 200 workers already hired to operate the plant.

The latest appeal came Monday, when SKEI, a large trade union, said it was concerned about a situation that poses a grave risk to the project and employees.

SKEI's regional head for Podravje Martin Dular said the NGO may be "overdoing it with its demand."

Gorazd Marinček of ROVO meanwhile noted for the STA that Magna representatives had delayed the equipping of the plant in Hoče, as a test run had been originally planned to be launched already in October 2018.

Magna submitted the documentation for environmental permit four months after the deadline, he said, adding that "after all that, attributing a 14-day or one-month delay to environmentalists is mere cynicism or excuse."

Marinček also pointed to the indications from "the sources from Magna itself" that the paint shop has only 200 orders so far for this year. "It is therefore logical that they will abolish outsourcing and concentrate the things in the core plant."

STA, 7 February 2019 - Slovenia's export growth slowed to 9.2% in 2018 from over 13% in the year before. With imports growing at 11%, the trade surplus narrowed to the lowest level on record, the Statistics Office said on Thursday.

Exports amounted to a new record EUR 30.9bn and imports to an equally record EUR 30.6bn, but the trade surplus narrowed to just EUR 0.2bn from more than EUR 0.7bn in the year before.

The entire surplus is generated in trade with non-EU countries, while the trade balance with EU members has been negative for many years.

Germany remains by far the biggest trading partner, accounting for a fifth of exports and about a sixth of imports. Italy is in second place by exports and imports.

The neighbouring Croatia is also a major trading partner and also one of the few EU sources of surplus, with exports at EUR 2.5bn and imports at EUR 1.7bn.

Austria, on the other hand, accounted for EUR 3.2bn of imports and EUR 2.4bn of exports.

Overall, just five countries - Germany, Italy, Croatia, Austria and France - account for more than half of all trade.

Slovenia's main exports were vehicles, medical and pharmaceutical products and electrical machinery.

Vehicles are also the biggest single import group, followed by oil derivatives and electrical machinery.

While the whole-year figures are positive, the trend shows come cause of concern amidst warnings that the economies of Slovenia's biggest trading partners are slowing down.

December exports thus rose by just 2% year-on-year, with exports up 6%.

The Chamber of Commerce and Industry (GZS), which has been raising the alarm about a looming slowdown for a while, described the figures as "predictably weak".

The chamber expects export growth rates to hover in the 3-4% range in the coming months.

"We estimate that exports of the automotive chain could even be negative year-on-year in some months given that January data for the sector were the worst in six years," the GZS's chief economist Bojan Ivanc said.

©SURS

More details can be found at SURS.

STA, 5 February 2019 - A subsidiary of the Slovenian national railways operator Slovenske Železnice has won the tender to build a new container terminal in the Croatian seaport of Rijeka, a decision that is yet to be made final as a rival bidder from Croatia has filed an appeal.

The new terminal is planned to increase the port's capacity by eliminating a bottleneck and adjust the port's railway infrastructure to the railway station in Rijeka.

The project will be co-funded in a 85% share by the European Commission as part of the Connecting Europe Facility (CEF).

The selection of the bid filed by the engineering company SŽ - Železniško Gradbeno Podjetje Ljubljana, estimated at EUR 28.5m, is being challenged by Croatia's DIV Grupa, which had submitted the lowest bid (EUR 24.6m).

The contracting authorities, the Rijeka port administration and the infrastructure arm of the Croatian national railways operator Hrvatske Željeznice, said that the bid by DIV Grupa was "unrealistically low".

Several other international and Croatian bidders participated in the tender, including Slovenia's Kolektor Koling, which valued its bid at EUR 29.3m.

All our stories related to Croatia can be found here

STA, 5 February 2019 - The European Federation of Building and Woodworkers (EFBWW) has filed a formal complaint against Slovenia alleging that it is granting illegal state aid to companies that temporarily post workers abroad.

"Slovenia has organised its national legislation in such a way that companies that temporarily post workers abroad receive considerable reductions in social security contributions."

This allows these companies a significant financial competitive advantage, since they can "offer their services more cheaply abroad than in their own country," the organisation said in the complaint to the European Commission.

EFBWW President Dietmar Schäfers said there was "nothing wrong with this autonomy but countries must not deliberately abuse their independence by giving considerable financial benefits to their companies when they post workers abroad."

He claimed that the financial advantage for these companies easily amounted to around EUR 500 per worker per month, depending on the country the workers were sent to.

Between 2010 and 2016, the number of Slovenian posted workers increased from around 25,000 to 164,226, according to the organisation. These workers are mainly employed in the construction sector in Germany, Austria and Belgium.

The federation claims this makes Slovenia "a kind of gateway of cheap labour for Europe for numerous workers from Bosnia and Herzegovina, Serbia, Macedonia and Albania", which proves Slovenia has adopted a policy of exporting cheap labour.

STA, 4 February 2019 - Calls for structural reforms, in particular lower taxes and a more flexible market, were in the centre of a Slovenian Business Club (SBC)-sponsored meeting in Postojna, which featured some of Slovenia's top business and state officials. Prime Minister Marjan Šarec promised changes, while also noting the importance of preserving the welfare state.

Šarec told the meeting, which brought together around 300 successful entrepreneurs and several cabinet members, that the government would draft a package of measures before the end of the year, "measures that you've perhaps been wishing to see for a while".

He expects the measures will again cause a storm in the public, but "there is no action without a reaction".

Šarec, however, went on to stress that the welfare state was also needed, "since things that it provides for everybody - such as education, healthcare and other services - are not unimportant".

Šarec, who acknowledged the economy was slowing down but argued it was too early to speak of a crisis, rejected comparisons with Switzerland, which is being looked to at the meeting for inspiration on how to increase added value.

"If we continue to wonder how to become another Switzerland or somebody else, we'll probably fail to meet the desired goals and results. No system has only pluses and no system has only minuses," the prime minister said.

Marjan Batagelj, the chairman and majority owner of Postojnska Jama, the operator of Postojna Cave, said it was time for concrete measures, calling for lower taxation of wages and greater labour flexibility.

"We must not become a tax island. All countries around us are reducing taxes and we need to make sure our business environment is competitive," said Batagelj, while at the same time calling for a more effective education system.

He pointed to Switzerland as an example of a country where politics is constantly coordinating its actions with business.

This was echoed by Heinz Karrrer, the president of the biggest economic organisation in Switzerland, Economiesuisse, who said politics should listen very carefully to the needs of business when it comes to creating jobs.

The afternoon part of the meeting, which also featured Economy Minister Zdravko Počivalšek, Finance Minister Andrej Bertoncelj and Labour, Family, Social Affairs and Equal Opportunities Minister Ksenija Klampfer, looked in more detail at the forthcoming measures in Slovenia.

Bertoncej said the government would present measures coming as part of "comprehensive tax optimisation" to social partners within a month.

He called for an all-encompassing review, noting that while labour was taxed heavily in Slovenia, the tax burdens on capital were lighter than in other countries.

Promising that the business environment would remain predictable, Bertoncej also announced a gradual introduction of measures, with the biggest batch expected in 2019, to be followed by individual measures in 2020 and 2021.

Among concrete measures being mulled by the government, he mentioned easing taxation on the holiday allowance, changes to income tax brackets, to general income tax allowance, as well as to the corporate tax rate.

Bertoncelj, who also sees reserves as regards the effectiveness of the public sector, added that macroeconomic stability would be the priority focus of the ministry.

Economy Minister Počivalšek highlighted labour force shortages as a key factor undermining growth, suggesting that focusing on raising the average wage would have been better than the recent focus on the minimum wage.

He added that "a step forward" could also be possible when it comes to expanding possibilities to lay off unmotivated staff.

Labour Minister Klampfer also called for reducing the tax burden on labour "across the entire vertical", while stressing the need for social dialogue.

Ascent Resources’ quest to gain the permits needed to develop its Petišovci gas field continues, reports the investment website Morning Star, with the threat of legal action against Slovenia if the delays continue. The company requires one permit to install a gas processing facility, while another is needed to re-stimulate wells to increase their production, a process commonly known as fracking.

CEO Colin Hutchinson was quoted on Monday as follows: "While the pace of progress in Slovenia remains frustratingly slow, as we continue to follow the process and provide those responsible for making the permitting decision with all of the information they require, based on the unarguable benefits for the country I remain hopeful the permits will be awarded in due course."

Some of the messages sent in support of Ascent Resources. Screenshot from RTV Slovenia

The project has been in the news in recent months because of the environmental concerns it raises, but also because of a number of harassing messages that were sent to government officials in Slovenia, including the Minister of Environment. While the author(s) of the messages have not been identified, all expressed support for Ascent Resources.

Although new developments are stalled production at the site is continuing, and the website notes that in January the firm was able to extract 412,763 cubic metres of gas, for expected revenues of about €70,000, down slightly from the figures seen in December.

Ascent Resources is a penny stock, currently trading at 0.28p, or £0.0028

STA, 5 February 2019 - STBE, a company which is said to own the airline Adria Airways brand, has been absorbed by Adria Airways, Slovenia's flag carrier in German ownership. The move increases the airline's share capital and changes its ownership, the business newspaper Finance reported on Tuesday, citing publicly available documents.

Adria's share capital has thus increased by EUR 1.5m to EUR 3.28m and its majority ownership has passed to Stefan Beulertz, until now the sole owner of STBE.

According to news portal Siol, STBE had bought Adria's brand from Adria a while ago for EUR 8m.

Before Beulertz became its majority owner, Adria was in sole ownership of AA International Aviation Holding, a company within the German turnaround fund 4K Invest, which bought Adria from the Slovenian state in 2016.

The airline said its strategy and day-to-day operations would not change under the new ownership. "The merger by acquisition of STBE is one of the measures to improve the company's financial strength and performance," Adria told the STA.

Struggling with liquidity issues, Adria was supplied with EUR 4m in fresh capital at the end of 2018.

Its owners announced another EUR 10m capital hike in the first quarter of this year and the move is believed to be a part of this operation.

Last year, Adria was scrutinised by the Civil Aviation Agency for speculation of insolvency, but the agency said last month the airline was able to secure long-term solvency, so it kept the air operator certificate.

Meanwhile, Finance cited an unofficial source saying the company had generated an operating loss of EUR 14-15m last year.

Adria neither confirmed nor denied the report, reiterating it would inject the airline with EUR 10m in fresh capital by the end of March.

Adria will phase out flights to Moscow and Düsseldorf this week and terminate cooperation with German airport Paderborn-Lippstadt.

"We have not managed to agree further conditions for air services under which we could carry on the cooperation [with Paderborn]... All the other operations of Adria Airways remain unchanged," the company told the STA.

STA, 4 February 2019 - Three Slovenian coach companies have been fined nearly EUR 3.1m by the Competition Protection Agency due to collusion in a 2010 public tender for intercity passenger services, with three more left off the hook for cooperating with the competition watchdog.

Deutsche Bahn subsidiary Arriva Alpetour, industry consolidator Nomago and Integral Brebus, a smaller firm operating out of Brežice, have been ordered to pay the fine.

The coach operators were found to have rigged a public tender by submitting bids for individual concession areas, avoiding outbidding each other.

Indeed, it was discovered that they had agreed in a series of meetings and email exchanges how they would subcontract individual services to each other so that they retained their market shares.

The public tender was cancelled because the bids were too high.

Three other operators - Arriva Štajerska, Arriva Dolenjska in Primorska and Veolia Ljubljana - escaped fines totalling almost a million euro by working with the agency and providing additional evidence about collusion.

This is the first example of the agency being lenient on violators of competition rules in Slovenia.

"The point of the leniency programme is to motivate the participants of a cartel to work with the agency in the detection of actions that represent one of the worst forms of the restriction of competition," the agency said.

The law stipulates that companies engaging in anti-competitive behaviour may receive fines of up to 10% of their turnover, depending on the gravity of the offence.

The three companies that received fines have announced appeals, which will be processed by the Ljubljana Local Court, but an interim decision in which the agency proved the existence of collusion is already final.