Challenges to COVID-19-related regulations, needed tax, healthcare, and pension reforms, a busy M&A market, and questions related to future public spending are at the top of the agenda for lawyers in Slovenia, according to Selih & Partnerji Partner Jera Majzelj.
In terms of legislative updates, she points out that "like elsewhere, one of the most controversial topics in 2021 has been and continues to be COVID-19-related regulations. Many of these laws have been challenged in the Constitutional Court of Slovenia for violation of constitutional rights." In addition, she says that "the parliament recently adopted a new Debureaucratization Act aiming to reduce bureaucratic procedures, while the government established a new office for digital transformation. Both topics are vital, however, the effect of these changes remains to be seen."
According to her, "there is a high demand for more significant reforms in relation to taxes, the healthcare system, and pensions. Companies have long expressed their concerns on issues such as lowering the taxation on salaries and bonuses, while the general public is concerned with the long-term sustainability of and access to the healthcare and pension systems, but we have not seen any real change so far."
Majzelj says that "from an M&A perspective, Slovenia joins the global trend of a booming market in 2021, with a number of big transactions, as well as increased activity in small and mid-sized companies. For instance, consolidation on the banking market continued when Hungarian OTP Bank signed a deal to purchase one of Slovenia’s biggest banks – Nova KBM. OMV’s sale of service stations business to MOL is another major deal to mention." According to her, other notable deals were acquisitions of private medical centers by insurance companies and funds, as well as acquisitions in the IT and digital sectors.
Majzelj notes that last year’s GDP growth was quite high: "According to the Bank of Slovenia estimates, GDP increased by 6.7% last year. In 2022, the bank forecasts a slower 4% growth." According to her, "this growth fuels a record employment rate. In addition, people have accumulated savings during the onset of the pandemic. During this time, interest rates were low, enabling people to borrow money and invest, for instance, in the real estate market, where prices are soaring." She highlights that "the state has also been generous with providing subsidies. Accordingly, we are seeing an increase in both private and public spending."
In terms of public spending, one of the biggest challenges is the allocation of subsidies and funds received from EU sources. "There’s a general worry that the funding received through EU recovery plans will not be used for strategic investments, digitalization, and green sustainable and innovative projects, but rather go into traditional infrastructure projects and maintaining the status quo," she says, concluding that the new government will have to address these challenges in the future.