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Slovenia Business Week no. 11: IMF: Market Integration and Denationalisation Primary Targets

The delegation of the International Monetary Fund (IMF) presented their viewpoints on the challenges facing Slovenia after the euro adoption, pointing out the further integration of the financial market and denationalisation as the primary objective

The delegation of the International Monetary Fund (IMF) presented on Wednesday, 14 March their viewpoints on the challenges facing Slovenia after the euro adoption, pointing out the further integration of the financial market and denationalisation as the primary objectives.

The budget analysis meanwhile revealed that Slovenia has to pay more attention to the long-term sustainability of public finances, the IMF representatives said at the seminar organised by the central bank Banka Slovenije.

Slovenia has achieved good results and changes are afoot, but they do not ensure sustainability of public finances in the long run. "The challenge is so great that it has to be focused on as soon as possible," said Anita Tuladhar of the IMF.

The budget has to be more flexible, said Tuladhar, adding that Slovenia should increase the efficiency of public spending and make changes in the pension system in accordance with demographic trends.

An analysis of the banking system, based on the data throughout 2005, shows that state ownership should be decreased, while the financial market should be more integrated into the eurozone.

The Slovenian market is less profitable and efficient than other EU markets primarily due to access barriers and the structure of ownership, said Rudolfs Bems.

The IMF analysis also shows that Slovenian banks are less profitable in comparison to the EU average and that the banking sector is still underdeveloped.

"The contribution of the sector to productivity and growth is below the potential," said the head of the IMF delegation Piritta Sorsa.

In the analysis of the Slovenian capital market, Jochen Rainer Andritzky has concluded that more major companies should enter the stock exchange, because the number of companies listed is relatively low.

"The entrance of Telekom Slovenije is a good and encouraging example," said Andritzky, adding that Slovenia should make efforts for further integration of the capital market into the EU markets and improvement of cross-border infrastructure.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency