10 Aug 2022, 15:15 PM

STA, 9 August 2022 - Public broadcaster TV Slovenija has reported of yet another grave case of exploitation of foreign workers in Slovenia. Indian workers were reportedly forced to work 60-hour weeks at a Ljubljana car wash for less than the minimum wage after having their passports taken away. Amonte, the company operating the car wash, has denied the allegations.

TV Slovenija reported on Tuesday that the group of Indians ran away from the Avtostop car wash, located near the BTC shopping district, because of grave threats levelled at them by the employer.

Two of them turned for help to Delavska Svetovalnica, an NGO specialising in the rights of migrant workers.

The 12 men were staying on the premises of the employer and one of them has said that assistant director of the company would come to their bedrooms drunk at night.

He allegedly threatened the workers that their employer knew national and local politicians and had connections in the police and the military.

The Financial Administration, the Labour Inspectorate and the police conducted separate oversight visits at the firm in July, TV Slovenia said, adding that the procedures were still ongoing.

The day before the Labour Inspectorate visited the company, the men were given back their passports, after which they were taken away from them once again. The frightened workers then called the police.

Goran Lukić of Delavska Svetovalnica said that "the employer is obviously in the know about potential oversight visits".

Amonte director Semir Hajdarpašić meanwhile rejected the allegations, but refused to appear on camera. He believes this is an attempt at blackmail.

The workers had been complaining about work conditions from the beginning, had demanded higher pay and then disappeared, he said. He also believes the workers used his company to continue their way to Northern Europe.

The report comes just two months after modern slavery reports at two fish-packing companies employing foreign workers.

09 Aug 2022, 16:21 PM

STA, 9 August 2022 - Ljubljana Mayor Zoran Janković has promised the residents they will be kept warm this winter despite the energy crisis. Coal reserves are sufficient to provide district heating to nearly half of all homes and there will be enough natural gas, but the question is at what price gas will be available.

Speaking at his weekly press conference on Tuesday, Janković said that some 61,000 apartments or 48% of all in the capital city are served by district heating. "We've got sufficient energy sources for the hot water pipeline throughout the heating season, even if it's cold from October to May," he said.

The share of biomass for district heating is to be raised to 20%. There are still over a month's worth of coal reserves with a shipment of 145,000 tonnes of Indonesian coal on its way to Slovenia, plus another such to follow in January, according to the mayor.

He is planning to meet Environment Minister Uroš Brežan later this month to discuss how the financial burden of emission coupons for the use of coal could be alleviated and to determine the energy sources for district heating.

Janković hailed the government's decision to cap prices of energy products, including district heating.

One out of three households in Ljubljana uses natural gas for heating. "We absolutely have the needed quantity of gas secured," Janković said. If necessary, the use of gas will be reduced with industry rather than households. However, he also said it was too early to say how much gas will cost.

The construction of a new gas-steam unit at the Ljubljana CHP Plant is slated for completion in late September. Janković expects it will be ready for a trial start-up in October, by which time it should be clear what happens with gas supplies.

"We need 170 million cubic metres of gas for Ljubljana, which is a negligible amount relative to European consumption." At the moment, the city authorities are negotiating with three suppliers. Another option is heating oil.

The mayor reasserted his case for a waste-to-energy plant, which he said would make Ljubljana 70% self-sufficient if built in five years. "I promise that, if we get the concession, our incinerator will be the most advanced with minimum emissions and a chimney above the temperature inversion zone," he said, adding that heating for end users would be 20% lower than now.

09 Aug 2022, 10:41 AM

STA, 9 August 2022 - There seems to be little interest among housing owners in renting out their property through a public rental housing service that the national Housing Fund set up this year to increase the number of flats available at not-for-profit rents. As a result, the fund has sub-rented out only six units so far.

The fund published a call for owners to join the scheme in February, after the housing act changes were passed in May 2021, and is open until the end of the year.

A total of 29 providers of housing from across the country responded until last Thursday - 27 individuals, and one municipality with two flats, the fund told the STA.

Until that day, the fund accepted six offers, but failed to find common ground with the other owners, mostly because they find the rent to be "too low".

The rent is set on the basis of parameters such as the size, age, state of repair, and fixtures and fittings, and capped at 1.3 of the non-profit rent for that apartment.

The flats, measuring 36-80 square metres, for which the contracts have been signed are located in various parts of the country, and were rented out at EUR 148-344 a month.

A 130-square-metre house near Ljubljana will meanwhile be rented out at EUR 396, the fund said.

Apart from owners finding the rent too low, the fund believes that to secure more flats - 200 is the target in the ongoing call, legislative changes would be needed because owners have problems obtaining the documents they need to enter the scheme.

What is also needed is "a change in mentality among owners to opt for a form of public rental that may not be as profitable as commercial rents, but offers security of tenure, proper management and predictable business relationships".

The Environment and Spatial Planning Ministry agrees the documentation (especially the occupancy permit, which older buildings often do not have) and a big gap between the expected and offered rent are a problem.

While admitting the number of units entering the scheme will be lower than the 100 planned for the first year, the ministry said that "a more detailed analysis and assessment will be carried out on the basis of the Housing Fund's annual report for 2022".

The ministry considers the response from interested parties "satisfactory" although the share of those who opt to sign the rent-out contract is "relatively low".

It will draft legislative changes "if the need for them becomes apparent", but will first meet the fund's representatives in the autumn to finds ways to encourage owners to enter the scheme.

Zoran Đukić, director of the real estate agency Stoja Trade, sees the state's decision to set up a public rental service as an excellent idea, it is just that the state did not approach it in the most appropriate manner. He believes the low interest is a result of too low a rent for housing owners and its too high taxation.

Đukić says that owners entering the public rental service scheme should have the rents obtained taxed at a lower rate than is the standard rate.

Another issue is who takes care that housing units do not get damaged when there is an intermediary between the owner and the tenant, while he also believes that owners should be better informed of the possibility of renting out through the public scheme.

08 Aug 2022, 12:14 PM

STA, 8 August 2022 - Judging by the available statistical data, Slovenia's housing market is not showing signs of cooling just yet although real estate agents say prices have stopped going up mid-year. Still, pundits do not think any major drop in prices is likely over the next six months.

After a record surge last year, prices of residential properties rose by a further 4.1% in this year's first quarter on the quarter before, going up by as much as 19.6% year-on-year, the latest data from the Statistics Office shows.

Prices of existing flats went up by 5.5% quarter-on-quarter and by 19.9% year-on-year as prices of new flats dropped by 8.9% on the quarter before but were still 4.5% up compared with the first quarter of 2021.

Official data for the second quarter are not available yet but Zoran Đukić, CEO of real estate agency Stoja Trade, says selling prices are still high, in particular for well-located newish apartments with an indoor car park. The volume of transactions is level or even a bit above last year's, he has told the STA.

"The growth in residential property prices has slowed down considerably since the beginning of 2022, and has all but stopped rising starting from the second half of the year, that is we are no longer seeing prices going up at the moment," says realtor Alen Komić of ABC Nepremičnine.

In its latest property market report, released in May for 2021, the Surveying and Mapping Authority (GURS) cites preliminary data for 2022 to project a continued growth in the housing market, but also points to signs of a slow-down in the capital Ljubljana, which is seen as the trend setter for the rest of the country.

GURS attributed the record growth in 2021 to excess demand which "continues to be driven largely by low interest rates and the availability of loans and, more recently, increasingly by fears of rising inflation".

Investment in real estate as a rule provides protection against inflation, says Bojan Ivanc, chief analyst with the Chamber of Commerce and Industry (GZS). However, he also says the economic uncertainty and rising interest rates are suppressing demand for high-end properties, in particular those bought as an investment to be rented out.

Additional pressure on the prices comes from a potential change in property taxation that would reduce the return for property owners, Ivanc notes. The new government has announced it will raise tax on rental income from 15% to 25%, the rate in force prior to 2020.

Similarly, Đukić says that inflation is what in principle drives property purchases, "because that's how people protect their assets so that they don't lose value in cash".

Meanwhile, Komić believes that the tightening of credit conditions with higher interest rates and the end of fixed interest rates will have a greater impact on demand than inflation itself, although he agrees that in an inflationary environment it is preferable to invest liquidity somewhere.

Both realtors agree though that the changed conditions have not reflected on the demand in the market yet.

Ivanc believes the key factor that will affect changes in the property market will be conditions on the labour market, that is jobs and wages, and to an extent changes in interest rates. "Considering the volume of property transactions, speculative investments have not been many recently. It is thus not likely that property prices will drop significantly over the next six months," the economist says.

Rents have been going up as well, in particular on the back of a revival of holiday rentals through platforms such as Airbnb and Booking following restrictions on travel during the Covid-19 pandemic.

"Rents have increased by roughly 15 to 20 percent in 2022, especially now in the short-term rental period in and around Ljubljana city centre. There has also been an increase in Airbnb and Booking rentals, which can be seen in the smaller supply of apartments in Ljubljana city centre," says Đukić.

Komić too finds that the scope of short-time rentals has increased and that "quite a few mainly fine properties in good locations (close to the city centre) have been transferred to the short-term rental market (Airbnb, Booking, etc.), making the supply of properties even worse in terms of quantity and quality, while demand has remained virtually the same [...] All of this has, of course, led to a constant rise in rents."

The demand for residential properties had been driven by cheap loans but the cost of those has been going up since late spring and the European Central Bank has now also raised its key interest rates.

After being in the negative territory since 2015, the six-month Euribor rate went positive in early June, standing at 0.667% last Friday. In July, the newspaper Delo calculated, based on usual terms of a variable-rate mortgage loan, that those who took out a 20-year loan in early May would by now see their monthly instalment going up by around 6%.

It is not clear yet if and how the increase in the cost of mortgage loans will reflect on demand. The most recent available data from the central bank shows the volume of new mortgage loans rose substantially for the fourth straight month in May. At 11.7%, the year-on-year growth rate was one of the highest in the euro zone.

04 Aug 2022, 10:20 AM

STA, 3 August 2022 - After a week-long shutdown due to low water levels of the Soča river, the Solkan Hydropower Plant is again operational as of Tuesday afternoon, its operator Soške Elektrarne Nova Gorica (SENG) announced on their website. The plant is operating within the currently available flow of the river.

Hydrological conditions on Monday did not yet allow for the turbines to function safely as the Soča's water levels were extremely low. The company then said that the plant would be put into operation as soon as conditions improved.

SENG told the STA today that it was able to relaunch the Solkan power plant following rainfall in the Bovec area, upstream from the power plant.

The Environmental Agency has meanwhile said that a number of small hydro power plants on Soča's contributories were currently running with restricted capacities.

The shutdown caused production losses, SENG told the STA recently. The Holding Slovenske Elektrarne power utility compensated for this by restructuring production within the group and by buying additional electricity on the stock exchange.

The Solkan hydropower plant was shut down last Wednesday for the first time since 2003.

03 Aug 2022, 11:03 AM

STA, 2 August 2022 - While virtually entire Slovenia is in the midst of a severe drought, first estimates indicate the damage to crops will be extensive. Prime Minister Robert Golob noted that drought will likely continue and the damage will continue to grow. While parts of the country have seen some rain in the past days, the coming days will be hot and dry.

Maize and grasses have been hit the worst so far, with the fallout expected to be at 50%, according to data the Chamber of Agriculture and Forestry forwarded to the Agriculture Ministry.

Agriculture Ministry State Secretary Tatjana Buzeti told the STA that maize crops will be down by between 40% and 50%. In areas with sandy soil the fallout might be as high as 100%, according to initial estimates.

There will be 50% less grass on average, and in some areas as much as 90%, the estimates show.

The drop in corn and grass will be particularly problematic for livestock farmers because some of them are already facing shortage of animal feed.

The yield in pumpkins and potatoes will be 30% to 50% lower, while hops will be down by 40%. Produce will be hit by at least 40%. The yield of some fruits and vegetables will be lower by as much as 80-100%, Buzeti warned.

"The effects of drought can even be seen in vines, which are rather hardy, and we can expect the yield to be lower by 50%."

The ministry estimates that the damage has not yet reached the EUR 65.3 million damage caused by drought in 2017. But it is near the 0.03% of budget revenue, which warrants state aid. Buzeti believes final data collection will begin in September. Damages will not be paid out before next year.

02 Aug 2022, 09:33 AM

STA, 1 August 2022 - Commenting on the Austrian postal company Österreichische Post entering the Slovenian market, national postal company Pošta Slovenije noted it had so far managed to compete with global players, while it is aware of the need to not only follow trends in such an environment but also to be innovative in its approach to customers.

Competition on the Slovenian market has been strong, as it features standard postal service providers, all major global parcel companies and specialised providers of parcel and logistics services.

Pošta Slovenije said that it had competed with global players on the market that brought the latest technologies in the country by establishing subsidiaries in Slovenia, which increased competition on the market.

The company sees its key advantage is that it can deliver large quantities of letters and parcels, large packages and pallets to various customers in a short time in the same quality throughout Slovenia.

It has seven different methods of parcel delivery at more than 1,100 pick-up points, including 479 post offices, 24 automated parcel lockers in major Slovenian cities, as well as hundreds of parcel boxes at service stations.

At the beginning of next year, it intends to add another 76 automated parcel lockers. Parcel carriers and post office counters were meanwhile equipped with additional payment terminals last month.

As for new investments, the company noted a new parcel sorting machine in the logistics centre in Ljubljana, upgraded information support for logistics processes and a new 5,000 square-metre logistics centre as one of the largest investments in recent years.

Last year, Pošta Slovenije recorded a 22% growth in parcel delivery services at the group level, which account for 13.5% of its total operating income. Comprehensive parcel services and related logistics services account for almost a 40% share.

Österreichische Post started with package deliveries through its Slovenian subsidiary Express One Slovenia at the beginning of July. It said this was a logical move given that it had already been covering the area in a significant scope.

02 Aug 2022, 08:57 AM

STA, 1 August 2022 - The latest income tax reform, introduced by the previous government in the spring, significantly affects public revenue, the Finance Ministry said on Monday, announcing changes that are to enter into force next year. The government plans to annul the increase of the general tax relief and the cut in the tax rate for top earners.

The amendments to the income tax act which were passed in March and took effect retroactively from the beginning of the year raised the general tax relief from EUR 3,500 to EUR 4,500 and should raise it to EUR 7,500 by 2025. They also reduced the tax rate for the top earners from 50% to 45%.

But ministry plans to cancel all this. In line with its proposal, the general tax relief will go up only to EUR 5,000 on 1 January 2023 with no other rises to follow.

"We're not abolishing all reliefs envisaged by the law passed at the beginning of the year," Finance Minister Klemen Boštjančič told the press today.

The ministry proposes raising the general tax relief by just EUR 500 rather than EUR 1,000, because of inflation and the rising costs of living, he explained.

It also proposes raising the amount for income for which additional general tax relief is still acknowledged from EUR 13,716 to EUR 15,000. "Thus net income of those with the lowest income will be higher than it would be if the income tax was left as it is," the minister said.

A special tax relief is proposed for the young up to the age of 26.

The tax rate for the top earners should go back to 50%, from the current 45%, while income from rents will again be taxed as it was before 2020.

The tax on capital that was this year cut from 27.5% to 25% should not be changed.

The changes will, however, affect corporate taxes and should bring EUR 90 million more in tax revenue to the national budget.

Because of the changes to the general tax relief, EUR 180 million more will pour into the budget in 2024 and EUR 170 million in 2025, the ministry said.

Meanwhile, employees on the minimum wage will receive EUR 316 more a year than this year. Under the current law, they would receive EUR 157 more. Those with higher wages will get less than they would under the current law but still more than they will receive this year. Those receiving average wages will receive EUR 130 more a year and those earning double the average wage will get EUR 165 more a year, the minister said.

01 Aug 2022, 16:53 PM

STA, 29 July 2022 - The Administrative Court decreed that the planned Mokrice hydropower station on the river Sava cannot get a building permit until it has ruled on legal action brought against the project by the Slovenian Native Fish Society.

Announcing the decision on Friday, the society said it was important because it blocked the investors' plan to obtain a partial building permit from the Ministry and Spatial Planning and start with the plant's construction despite their legal challenge.

Mokrice, located near the border with Croatia, is the last hydro plant to be built on the lower Sava, four having already been completed as part of a project started 16 years ago. Under initial plans the Mokrice plant was slated for completion as early as 2018.

The investors - state-owned companies HESS, Infra and ELES - can appeal against the court's decision but the society says the Administrative Court has warned them that "hard to repair damage" to nature that could be caused by such a project can only be prevented so that the ministry does not issue a building permit until the court's final ruling, while it can continue with the administrative procedure to issue such a permit.

In its decision the court refers to case law, that is the rulings already reached by the Administrative Court and Supreme Court in the Mokrice plant case.

This is the second time that the Slovenian Native Fish Society is challenging the project after the former government decided that the public interest of producing renewable energy overrides the public interest of nature conservation in the Mokrice hydro power project.

This was after the Administrative Court in late 2021 overturned the ministry's original decision of December 2020 on the grounds that the environmental impact assessment procedure must be completed before the public interest procedure may by initiated.

The Janez Janša government took the decision on 20 May this year, after it has already been voted out in the election, which the society finds is problematic even from the aspect that the government was by then relegated to its caretaker role when it should have no longer taken such decisions.

They say the decision does not include "many of the expert bases and basic ichthyological studies, the lack of which had already been pointed out in the Administrative Court's previous ruling".

The society finds it unacceptable that a free flowing river should be ruined to produce electricity, arguing that in optimal conditions the plant would generate electricity equalling only 1% of the country's annual consumption.

They also are disappointed because the Robert Golob government has backed the project as well.

An appeal to annul the previous government's decision was also made by the Youth for Climate Justice earlier this month but incumbent Environment Minister Uroš Brežan said the project was a step in the right direction in view of climate neutrality goals and it also considered nature conservation.

01 Aug 2022, 13:49 PM

STA, 1 August 2022 - Amid the energy crisis, the prices of wood pellets and heat pumps in Slovenia have surged. As demand for pellets rose by about 35%, the price almost doubled and the supply has become a problem.

The Škofja Loka-based wood pellets producer Energija Narave told the STA the price of pellets went up by as much as 95% due to the rise in the price of raw material and costlier production. Currently, a pallet of mixed pellets produced by the company costs EUR 530 and a pallet of spruce pellets EUR 544.

The company said that just like last year, all the pellets produced this year would be sold.

What is more, the demand exceeds supply in Slovenia at the moment. According to Energija Narave, all Slovenian companies would cover about a third of domestic demand if they did not export. But all of them export.

"There is very little import this year," the company said, pointing to Serbia and Bosnia-Herzegovina, which banned exports due to lower purchasing power of their population. Meanwhile, countries north and west of Slovenia can sell pellets at a better price at home.

"We believe the Russian-Ukrainian war does not directly affect the Slovenian market, but it has a massive impact on the European market as Ukraine alone produces more than a third of this source of energy for the European market."

Energija Narave was forced to stop accepting orders at the end of June because its production capacities could not cope.

Energy company Elektro Maribor Energija Plus told the STA the demand for heat pumps had also been on the rise due to fear of price hikes and disruptions in the supply of heating oil and gas. This along with general price hikes has pushed the prices slightly up, the company said.

But it noted that the state was still offering subsidies for the purchase of heat pumps.

Elektro Maribor Energija Plus has been seeing a rise in demand for heat pumps since last October, but currently the situation is "crazy". The company decided that as it starts accepting orders again it will give priority to its regular customers.

The Statistics Office told the STA that the prices of heat pumps had indeed been quite stable, while the prices of pellets reflected the prices of hard fuels, which have gone up by 49.2% in the past year.

The government reduced value added tax (VAT) on energy products for all users last week to mitigate the effects of price hikes, but it has limited options for wood biomass, where it cannot regulate prices.

01 Aug 2022, 11:07 AM

STA, 29 July 2022 - The Slovenian publishing industry has been severely affected by the Covid epidemic and now also with higher paper prices. Industry insiders thus propose that the state issue annual culture vouchers to encourage people to buy books as a means of helping the industry cope with the rising prices.

Vladimir Kukavica, head of the chamber of publishers at the Chamber of Commerce and Industry, expects the government to help create conditions to keep books as high as possible among the social values by encouraging the writing, drawing, reading, publishing and buying of books.

"An annual culture voucher would not only help the publishing industry breathe freely, it would also have multiplier effects on the entire Slovenian economy and society as a whole," he has told the STA.

Kukavica says the coronavirus lockdowns hit the industry hard. In 2020, bookshops were closed for the most part of the year opening among the last businesses, which slashed the publishing industry's revenue by almost 7% from 2019.

Net sales revenue fell by almost 13% and net profit by almost 9%, while the situation improved to the 2019 levels last year, also due to the vouchers the government introduced to help tourism that could also be spent on books.

However, the current energy prices have now pushed up the prices of paper as the basic raw material used in the production of books, Kukavica says.

Slovenian Statistics Office data shows that industrial products in the group of paper production increased by almost 28% the first half of the year.

In the period between May this year and May last year, the price of paper doubled, says Kukavica, adding that forecasts for this autumn are rather uncertain.

"Although wholesalers have warehouses full of paper, they are not willing to disclose prices for the autumn period," he says, adding they will certainly depend on the price and availability of energy products.

Celjska Mohorjeva Družba, the eighth largest publisher in the country, increased its printing prices by 35-80% depending on the specifics of books over the past year.

At the same time, the Celje-based company faces longer paper delivery times and shortages of certain types of paper.

It says that their books will be more expensive, although it admits it "is not in a position to raise the retail prices as much as dictated by paper and energy prices".

Publisher Umco agrees the higher paper prices will affect the industry, but does not expect all book prices to rise to the same extent because books are published under different business models and receive different levels of subsidies.

Both Umco and Celjska Mohorjeva Družba support the "culture vouchers", with Umco also proposing lowering VAT on books and introducing subsidies for paper purchases.

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