Slovenia is no longer the Switzerland of Eastern Europe – but perhaps not the Cyprus or Ireland, either.
Slovenia’s government is confident that it can now dodge the bullet of an international bailout, announcing on Thursday that it would be able to cover a whopping €3bn recapitalisation of its troubled banks from its own resources, despite that sum totalling nearly 10 per cent of GDP. While the announcement has been made with a palpable sense of relief in the tiny eurozone country, questions remain about implementation – and whether the absence of international pressure will allow Slovenia to stall on much-needed reforms. Continue reading »
Croatia’s accession to the European Union on July 1 may have been hugely significant for a country putting years of Communist dictatorship and subsequent war behind it. But its first three months of membership have been characterised by economic decline, rather than the hoped-for resurgence. And the immediate outlook is not much sunnier. Continue reading »
By Ben Aris of bne
Despite its current financial woes, Slovenia is the most prosperous country in Emerging Europe, according to the latest annual prosperity index from the Legatum Institute. Armenia comes in last.
While income is an important part of prosperity, the institute has broadened the definition to take into account of some of the non-material things that make life worth living, as defined in sub-indices such as “Safety & Security”, “Personal Freedom”, “Social Capital”, “Education”, among others. Continue reading »
By Jean-Marc Peterschmitt of the EBRD
Slovenia is facing its most serious economic crisis since it joined the European Union in 2004 – a crisis that has shattered previous convictions and conventions about how the country ran its economy. This is welcome. Even more welcome is the determination of the current government to implement decisive measures that aim to put the country on a path of sustainable and stable growth. Continue reading »
The court verdict that this week found Janez Jansa, the former prime minister, guilty of accepting bribes in the long-running “Patria” procurement scandal surprised many and has further polarised the Slovene population.
For many outside observers, including European Union officials, it was a step in the country’s much-needed fight against corruption. But for Jansa’s conservative faithful, it was a shock – as shown in this video where one ardent supporter outside the courthouse castigates the “crazy judges”.
But will the verdict make any difference to the practical ethics of doing business in Slovenia? Continue reading »
Slovenia’s former prime minister has been found guilty of taking bribes in a €278m arms deal in the biggest case of alleged corruption to surface in the troubled ex-Yugoslav republic.
Janez Jansa follows two other former premiers in the south east Europe to be convicted of financial wrongdoing, the ex-leaders of Croatia and Romania. Meanwhile in Serbia, the country’s richest businessman was arrested late last year for alleged embezzlement. A long-run campaign by the EU against corruption in its present and future new member states may finally be producing results. Continue reading »
It was glum faces in Slovenia last week: not only was it the coldest May since the 1970s, but the month ended with news that the economy had slumped a shocking 4.8 per cent in the first quarter.
What to do? Well, successive governments in Ljubljana have insisted they are working hard to support small business, especially start-ups, to boost the economy and employment. Sounds good but, alas, Slovenes at the coal face tell a different tale. Take Vasja Golar, aged 29, from the small, north-east town of Gornja Radgona. Continue reading »
Question: What’s the link between a national airline, a global-brand ski factory and an organic flour producer?
Answer: none at all, except in Slovenia, where any half-aware citizen would immediately recognise them as state-owned companies being prepared for privatisation to raise the cash to bail out Slovenia’s heavily indebted banks and balance the national budget. Continue reading »
By Dalibor Rohac of the Cato Institute
Slovenia, once celebrated as the poster boy of central and eastern Europe, is now widely perceived as yet another sick man of the eurozone. With bond yields close to those of Portugal and a Moody’s downgrade for one of the country’s largest banks, rumors of an imminent bailout abound — though vehemently denied by Alenka Bratušek, Slovenia’s prime minister.
To solve their problems, Slovenians should look north, as their woes resemble the afflictions facing the Baltic states only four years ago. Continue reading »
Given that the new Slovenian prime minister has had to talk down suggestions that the country is the next Cyprus, Slovenes could do with a boost.
Perhaps in the form of a few extra days skiing this year? The unseasonal arctic conditions have brought fresh snow to the Alpine slopes – and a late boost to ski centres. Continue reading »
By Petra Lesjak of KD Funds
Alenka Bratušek became Slovenia’s new prime minister last week, the first female head of government of this Alpine state of 2m people. She could hardly have had a tougher start to the job, as Monday’s last-minute deal to rescue Cyprus left many wondering if Slovenia might be next in the queue for a bailout.
Slovenia needs to refinance approximately €1bn in treasury notes by June. Its banks have a hole in their combined balance sheets of about €4bn. The banks still have liquidity but it is streaming out of deposits that they are paying heftily for – about 4 per cent a year for 12-month deposits. Bratušek and her new government have a lot of work to do. Continue reading »
The crisis in Cyprus has renewed concerns about the stability of the EU’s emerging markets, potentially ending the region’s recent run of good luck when it comes to market sentiment.
Poland, the Czech Republic and even Hungary have been able to borrow at very low rates, while the region is showing signs that the economy bottomed out towards the end of last year and should recover by the second half of this year. Continue reading »
By Luka Orešković of Provectus Capital
Last week, political change captured the global headlines. Pope Francis took over leadership of 1.2bn Catholics, matched by Xi Jinping, with his official ascendance to the presidency over 1.3bn in the People’s Republic of China. In between Beijing and the Vatican, and somewhat less noticed, the 2m people of Slovenia were also facing a change in government, with the center-right premier Janez Janša set to be replaced by Alenka Bratušek, the center-left head of Positive Slovenia.
With the European Commission forecasting an economic contraction of 2 per cent this year, and increasing talk of a bailout, the new government will face a challenging 12 months. Continue reading »