EBRD Plans to Withdraw from Slovenia in 2010, Official Says
The head of the European Bank for Reconstruction and Development's (EBRD) operations in Slovenia has said the institution plans to withdraw from Slovenia in 2010 because there is no longer a need for its presence here.
The EBRD, which invests in countries making the transition to a market economy, has plans to invest in Slovenian companies until 2010, after which it intends to leave the country, Francois Lecavalier told a press conference in Ljubljana on Friday.
"Slovenia has achieved transition... This probably means that the EBRD can stop investing in Slovenian companies in 2010," the EBRD's director for Slovakia, the Czech Republic, Hungary and Slovenia said.
He explained that the withdrawal of the EBRD from Slovenia did not mean that the bank would no longer work with Slovenian companies, as he believes that they will continue to be partners in investing in less developed countries.
According to him, the EBRD is pleased with the current state of the Slovenian economy. He said Slovenia's economic success was reflected by its forthcoming adoption of the euro.
"But this success is based on past macroeconomic performance. The country really can't rest on its laurels. It has to keep going forward and that means taking action to improve competitiveness."
According to him, Slovenia must persist with efforts to implement structural reforms, as this is the only way to attract investors.
The measures taken in the tax department must now be followed by changes in the structure of public spending, he added.
There needs to be a "reduction in the role of the state in the economy", Lecavalier added.
He said he welcomed the government's plans for the privatisation of telco Telekom Slovenije and the Slovenska industrija jekla steel group, but added that it was time to see results.
Moreover, Lecavalier said that Slovenia needed to improve corporate governance in order to offer greater protection to small shareholders. Red tape must be cut in order to facilitate enterprise, he added.
He also called for labour market reforms: "If you cannot fire people, you will not hire people."
According to Lecavalier, the EBRD is interested in taking part in the capital injection at home appliance group Gorenje. He said the capital increase was an opportunity for the state to reduce its role in the company.
Commenting on the operations of NLB, the largest bank in Slovenia, he said it failed to achieve its goal of becoming a strong regional player.
He put the failure down to a lack of capital and added that the EBRD would, in its capacity as a financial investor in NLB, put pressure on the management to implement the bank's strategy.
Lecavalier added that the EBRD would be willing to take part in the privatisation of NKBM, Slovenia's second-largest bank. He added there had been little progress on this front so far.
While saying that the NKBM was neither a poor nor a great bank, Lecavalier said there was no need for it to be sold to a foreign bank.
According to him, the state must launch the sale of the bank in order to maximise its takings from the sale. The EBRD could act as a financial investor by buying a 10-15% stake, he added.
The EBRD has so far invested over EUR 600m in the Slovenian economy. The value of its current portfolio in Slovenia stands at EUR 266m.
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