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Solid Slovenia: A Buzz Interview with Jan Gorjup of Kirm Perpar

Solid Slovenia: A Buzz Interview with Jan Gorjup of Kirm Perpar

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The business situation in Slovenia remains solid, although several challenges worsening prospects for the future are present – from the worker shortage to increasing prices and indications of a potential slowdown – while the country works on its green transition and considers reforming its tax, pension, and health systems and employment legislation, according to Kirm Perpar Partner Jan Gorjup.

“For the last few years, both businesses and lawyers in Slovenia were dealing with multiple challenges, including a shortage of raw materials and workers, and consistent price increases leading to inflation,” Gorjup begins, noting that “those challenges are not unique to the country, but are prevalent among medium-sized and larger companies, particularly those focused on exports.” To mitigate the increased costs, he says “businesses seek to pass them on to customers and buyers. However, the ability to do so varies across different sectors. It is crucial for European countries to work together to address these challenges collectively, as the consequences extend beyond the borders of any single state.”

As an example, Gorjup mentions “the recent announcement from Germany regarding changes to their criteria for foreigners to start working or be employed in Germany. Slovenia acts as a transit country for people from the Balkans who are seeking employment in Germany and other northern European countries. The easing of restrictions by Germany, particularly for less qualified positions, could potentially impact Slovenian companies that rely on foreign workers.”

And while the shortage of raw materials has somewhat improved, Gorjup reports “there are indications of a potential decrease in business activity. We are still busy, as are our clients, but there is a sense of change in the market.” One contributing factor, according to him, “is the increasing interest rates, which are still on record levels. Additionally, concerns have been raised about high real estate prices across Europe, all this potentially leading to a slowdown in economic activity.”

For instance, in Slovenia, “we recently saw a notable change in the trend with a decrease in real estate prices in Ljubljana during the first quarter, marking the first time since the COVID-19 pandemic began,” Gorjup says. “This could be seen as a natural slowdown following a period of high economic activity. The impact of the pointed out market conditions varies across different fields, making it difficult to provide a comprehensive overview.”

The regulation of prices has also been a prominent topic in Slovenia, driven by the government's objective to curb inflation and its negative consequences. According to Gorjup, “initially, the focus was on energy products, with the reintroduction of regulations for fuel prices, followed by electricity and gas prices. More recently, attention has turned to regulating prices for additional health insurance.” And broader reform discussions in Slovenia are ongoing, he points out, “with not much clear other than scarce information of such reforms on taxes, the pension and health systems, as well as on employment relations, especially in the public sector.”

Turning to the green transition, Gorjup says “Slovenia remains committed and has recognized the need for a second nuclear power plant. The project is to be developed near Krsko, but limited information is available to the public about its current stage.” According to him, “the green transition topic is significant across Europe, with ESG the natural next step from a legal perspective. The EU is developing legislation in this area, and states will follow, but large corporate systems are already introducing their own ESG rules, which are relevant for Slovenian companies operating in the global market today.”

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