In Slovenia, everything revolves around energy, according to Rojs Peljhan Prelesnik & Partners Managing Partner Robert Prelesnik, with the government capping energy prices for large companies, beefing up subsidies, and considering capital injections for major energy players.
"In the past few weeks, more or less everything has been about energy and energy prices in Slovenia," Prelesnik says. "Our prime minister comes from the energy sector – he’s been the director of Slovenia’s largest energy traders, and now energy is his primary focus."
"Just last week, the government issued a decree defining the maximum energy purchase price for large companies, helping them to face the winter," Prelesnik notes. "The decree is in force since November 30. Prime Minister Robert Golob labeled the EU’s proposal to cap gas prices at EUR 275 per megawatt-hour as inadequate, and the lack of unity as a bad message, so they took the matter into their own hands," he reports. "In addition, another bill offers around EUR 1.2 billion in subsidies to help with the high prices of electricity, gas, and steam," Prelesnik says, and adds that the government is also injecting around half a billion euros in December into Slovenia’s main electricity producer, the HSE power group.
In addition to this, Prelesnik highlights that "Slovenia’s largest trader of gas, Geoplin, signed a contract with an Algerian company, Sonatrach, for three years, on providing 300 million cubic meters of gas per year." Previously, Geoplin had an agreement with Gazprom, he points out, "on importing gas from Russia, but now that is more or less off the table." He adds that, interestingly, with the recent decrease in gas prices, Geoplin will not require a capital increase but will only get an extension of a loan by Petrol, which will provide the needed liquidity.
"Also related to energy, on Friday, our prime minister met the Hungarian prime minister and opened a completed high-voltage power line between Slovenia and Hungary," Prelesnik continues. "Slovenia did not have powerline connections with all neighboring countries, and now it is complete. The parties announced that Slovenia will likely construct a pipeline to connect Hungary to alternative sources, to achieve energy independence."
Unrelated to energy, Prelesnik adds that there are significant tax law updates as well: "Last week, the government announced that the tax reform passed by the previous government, back in March, will be reversed. The previous government lowered the taxes but the current government wants to reverse that, announcing that the new tax is a key to fiscal stability." However, Prelesnik says that the upper chamber of the parliament vetoed the change, "arguing that it is not the right time for increasing taxes and that higher net salaries should be the priority. The bill will now require another procedure through parliament."
Still, Prelesnik says that the data looks promising. "Unemployment decreased by 20% compared to last year. We reached 10% inflation – mostly due to an increase in food and energy prices – but still, exports rose by 22% on a yearly basis and imports were also 21% up." Pharmaceuticals and automotive exports are still significant, he says, "but there is a sense of things potentially slowing down." Finally, Prelesnik highlights that the real estate market is also experiencing a slowdown: "there is no substantial decrease in prices yet, but we see fewer transactions."