Slovenia's economic institute urges government to speed up privatisation, introduce pension reform

Telekom Slovenije, D.d

10/12/2014 12:58

* Govt has sold only 3 of 15 firms on privatisation list 
    * Institute says sale of state assets crucial to growth 
    * Pension reform not expected until 2020 
 
    By Marja Novak 
    LJUBLJANA, Dec 10 (Reuters) - Slovenia's official economic 
institute urged the government on Wednesday to press ahead with 
privatisation and introduce pension reform. 
    The euro zone member announced plans last year to sell 15 
state companies as it narrowly avoided an international bailout, 
but only three have been sold so far. 
    "Privatisation is among the most important structural 
changes that are needed ... better management of firms is a key 
factor in increasing Slovenia's growth potential," Bostjan 
Vasle, the head of the institute, told a news conference. 
    He also said the government should implement pension reform 
as soon as possible to cope with an ageing population. 
    The government of the former communist country still 
controls about 50 percent of the economy, including its main 
banks, insurers and energy firms. 
    Prime Minister Miro Cerar's centre-left cabinet, which took 
over in September, has pledged to pursue privatisation and cut 
the budget deficit to below 3 percent of GDP in 2015, the 
official ceiling for euro zone countries, from 4.3 percent seen 
this year. 
    It has also talked about reforming the state pension system 
but only plans to implement the reform by 2020. 
    The biggest state asset up for sale is telecom operator 
Telekom Slovenia  TLSG.LJ , which the government aims to sell by 
the end of March, along with the country's second largest bank 
Nova KBM (NKBM). 
    The previous government had to pour more than 3 billion 
euros into the mostly state-owned banks, including NKBM, last 
year to prevent them from collapsing under a large amount of bad 
loans and enable the country to avoid an international bailout. 
    Slovenia's economy has rebounded this year after two years 
of recession although growth is expected to slow next year. 
    The statistics office reported on Wednesday that exports 
rose 9 percent year-on-year in October, while industrial output 
was 3.9 percent higher.  
    Deputy Prime Minister Dejan Zidan said last month that 
growth this year will be around 2.4 percent, above the 
government's forecast in September of 2 percent. ID:nL6N0TB1UL  
    "The (macroeconomic) figures are relatively good but ... 
medium-term movements on international markets remain uncertain 
so we can expect economic growth in 2015 to be lower than this 
year," Vasle said. 
    Export growth was likely to slow, he said. The institute 
said in September it expected GDP growth of 1.6 percent in 2015 
and in 2016. 
    Around 77 percent of Slovenia's exports, mostly cars and car 
parts, drugs and household appliances, go to other parts of the 
European Union. 
 
 (Reporting By Marja Novak; Editing by Zoran Radosavljevic and 
Susan Fenton) 
 ((Marja.Novak@thomsonreuters.com; +386-8-205-6369; Reuters 
Messaging: marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: SLOVENIA PRIVATISATION/