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Slovenia: Stakes of at Least 80 Enterprises

Published: August 8, 2013; 11:27 · (Vindobona)

The Slovenian state owns shares in at least 80 companies directly or indirectly.

Slovenia: Stakes of at Least 80 Enterprises / Picture: © Vindobona.org

The Republic of Slovenia owns shares in at least 80 companies directly or indirectly. The book value of, according to 2011 data, comes at € 8.8bn or a little over 24 percent of the country's GDP. The injection of public money for direct recapitalization or payment of guarantees covers 1.4 percentage points of the country's budget deficit for 2011 which was 6.4 percent of GDP.

This is the base of the crisis Slovenia finds itself in at the moment. The country was shaken by a severe political crisis triggered by the complete lack of reforms, perspectives and a fully shattered confidence in the political elite’s capabilities to take the once Balkan and Central European phenomenon out of the trap of the past.

A recently published report by Ernst & Young, which was prepared in cooperation with Oxford Economics, estimates Slovenia’s economy to shrink by 4.9 percent of GDP in 2013 and to keep shrinking in 2014 when a reduction of 2.9 percent is expected. The key reason for the contraction will be an 11.1 percent decline in gross capital formations in 2013 and a 5.5 percent decline next year, the report says. Household consumption is expected to decrease 6.7 percent this year and 2.5 percent in 2014.

Ernst & Young also forecast the budget deficit to rise to 9.6 percent of GDP before dropping to 4.4 percent next year. In April investors were anxious the country could become the next Eurozone’s bailout candidate after Cyprus. However, the report by Ernst & Young predicts the country not having to require any financial aids from outside.

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