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155th regular session of the Government of the Republic of Slovenia

Photo: Nebojša Tejić/STA

Finance Minister to meet the EU Competition Commissioner on Friday

A delegation led by Finance Minister Mateja Vraničar Erman is due to meet EU Competition Commissioner Margrethe Vestager in Brussels on Friday, 10 November. The purpose of this latest meeting is the further discussion of progress in the search for possible alternative solutions regarding the realisation of the commitment to reduce the state's stake in NLB. The Minister will inform the Commissioner of the Government's view that it is not possible to proceed with the sale in the current circumstances and will present a proposal for an amended alternative to the commitment to sell.


In previous discussions with representatives of the Ministry of Finance, representatives of the European Commission have offered two possibilities as a compromise solution. The first of these consists of a minor reduction in the stake that the state is required to sell by the end of 2017, where it is essential that the sale should at least begin before the end of the year. The state would then have to sell the remainder of its stake by no later than the end of 2018. In exchange for reducing the stake to be sold in the first tranche, the European Commission would define additional compensatory measures. The second possibility offered involves selling an agreed percentage of the state's stake in NLB (50%) by the end of 2017 with a clause that, under certain conditions, gives the seller (the state) the right to receive additional compensation (the so-called earn-out clause). The selected solution could also be a combination of both possibilities.


The Minister will inform the Commissioner that neither of the proposed solutions is acceptable to the Government, since neither guarantees realisation of the key priority regarding the sale of NLB, i.e. the recovery of the greatest possible proportion of the funds invested by the state in its rescue. The significant fact here is that Slovenia would be unable to achieve the optimal price because of a factor not related to conditions in the market. The solution proposed by the European Commission would, in fact, mean selling the state's stake in NLB in circumstances in which the issue of transfer foreign currency deposits in Croatia is not yet settled, which would represent a risk of loss to taxpayers.


The Minister will thus inform the Commissioner that in the Government's opinion it is not possible to implement the commitment to sell in the present circumstances and under present conditions.


Consequently, the Minister will propose an amendment to the alternative to the commitment to sell that enables the optimal repayment of Slovenian taxpayers' money and maintains NLB as a powerful regional banking group, while at the same time not contravening EU state aid rules. In the opinion of the Government, such an alternative is possible and would adequately substitute the commitment to sell NLB.


It is a proposal that replaces the alternative to the commitment to sell, i.e. the sell-off of NLB's banking subsidiaries, with a compensatory measure on the basis of which NLB would pay an amount corresponding to 75% of the book value of NLB's banking subsidiaries into a so-called Fund of Funds. This would be conceived as a fund for European cohesion policy funds which are intended to provide repayable funding in the form of long-term and mezzanine loans, guarantees or capital investments to promote the growth and development of the Slovenian economy.


Under the terms of the proposed additional compensatory measure, Slovenia would renounce dividends for the period in which the bank is paying into the Fund of Funds. It is therefore a measure that would adequately address the situation that has arisen because the commitment to sell, which is a commitment of Slovenia and not of the bank, cannot be realised.


Regarding compensatory measures in the direction of limiting the distortion of competition, the Minister will take the view that the bank will already be limited by the fact that it will be unable to participate as a financial intermediary in placing resources from the Fund of Funds with final beneficiaries.


The Minister will also emphasise once again that the fundamental reasons that led to the formulation of a commitment to sell NLB, namely the problem of corporate governance, no longer exist (the corporate governance of the bank has significantly improved, while as a systemic bank NLB is, for example, under the direct supervision of the European Central Bank).


155th regular session of the Government of the Republic of Slovenia

At today's session the Government also determined the text of the draft Act amending the Auditing Act, by which the role of authorised auditors is defined more precisely, their independence is increased, and public supervision of their work is improved, thus increasing confidence in the professionalism and high quality of auditors' work. This is of great importance in view of the weight attached to audited financial statements in a market economy.


The Government also approved the draft Act on judicial protection for holders of eligible liabilities of banks, drafted by the Ministry of Finance following in-depth consultations with interested parties and experts. The draft Act prescribes the procedure for judicial protection for holders of eligible liabilities, which follows a decision of the Constitutional Court.


In connection with the treatment of children and adults with congenital heart defects and other cardiovascular conditions, and following the decision of 26 October 2017, the Government adopted an additional decision that reads as follows:


"In view of conditions in the field of the treatment of children and adults with congenital heart defects and other cardiovascular conditions, until such time as conditions are settled at the University Medical Centre Ljubljana, a Centre for the Treatment of Children and Adults with Congenital Heart Defects and Other Cardiovascular Conditions shall be established as an autonomous public healthcare institution. The Ministry of Health shall make all the necessary preparations to establish the public healthcare institution without delay or in the shortest possible time."



The Government also adopted a decision on the appointment of representatives of the founder to the board of the public healthcare institution University Medical Centre Ljubljana and their dismissal therefrom.

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