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Slovenia Needs Better Promotion as FDI Destination, German Executive Says (interview)

Ljubljana, 15 February (STA) - Slovenia should do more to attract foreign investors, the head of the Slovenian-German Chamber of Commerce and Industry Gertrud Rantzen believes. She has the impression that the chamber does more for Slovenia's business promotion than the government itself.

German companies are traditionally developing their business in a foreign country by building it up. They expect the state to offer them certain incentives to further invest and expand production, said Rantzen.

Governments in Central and Eastern Europe are much more proactive in offering foreigners the necessary infrastructure and tax incentives than here, Rantzen, who has been at the helm of the chamber since its founding in October 2006, told an interview with the STA.

The problem is not that there are no such incentives, but that they are not being promoted. Companies must try much harder to get them. When it comes to greenfield investment, administrative proceedings simply take too long, she explained.

Slovenia should also be promoted at events such as fairs and seminars, whereas the foreign and economy ministries should cooperate more with the Slovenian Chamber of Commerce and Industry (GZS) and us, she said.

Given that Germany as Slovenia's top trade partner is recovering from the economic turmoil, exports are pulling Slovenia up as well.

"The German-Slovenian business relations show a very clear trend [for the future]. The companies which have always bet on the German market... will develop nicely," Rantzen said.

According to her, Slovenian companies should focus on products with more added value. "Companies...should invest more into added value, improve the transfer of know-how into economy and invest into the future, especially human resources."

Asked how German companies survived the 2009 crisis year, Rantzen said that they had tried to keep as many employees as possible and offered them more training. "They knew that once the economy picks up again they will need a qualified workforce."

They also made use of state incentives and partly relied on their strong parent companies.

Meanwhile, Slovenian companies with close ties with Germany felt the positive effects of Germany's recovery with about a six-month delay. On the other hand, companies which focused on the domestic market or SE Europe and were not very export-oriented are still in trouble.

The chamber recorded no drop in membership due to the crisis. On the contrary, the interest in German-Slovenian business cooperation has increased. At the end of 2009 the chamber had 161 members and 173 at the end of 2010. "We expect to reach the figure 200 this year," the chamber president said.

Quizzed about the benefits of doing business on the Slovenian market for German companies, Rantzen highlighted geographic and cultural proximity to the German market. "Slovenia is also a good stepping stone for entering the wider region. Slovenia is appreciated as a credible and trustworthy partner."

Turning to the less favourable aspects of the Slovenian business environment, she pointed to high taxes, especially taxes on companies' revenues.

Asked about the future of the Slovenian-German business relations, Rantzen expressed hope that Germany would stay Slovenia's no. 1 trade partner and pointed to huge potential yet to be seized.

According to the GZS, trade between the countries was record-high in 2008, reaching EUR 8.2bn. In 2009, it dropped by 35%, but business ties between the countries remain close despite the crisis.

"Germany enjoys the advantage of trust in Slovenia. This is probably connected to the fact that Germany was the first important country to recognise Slovenia's independence and had also helped it on its way to independence. This is a very good basis for economic relations."

Rantzen said her chamber would continue to strengthen these ties, including by helping Slovenian companies enter the German market.

Asked about the benefits of a strategic cooperation agreement between Slovenia and Germany Slovenian PM Borut Pahor announced for this year, Rantzen said such agreements were useful, but had no direct effect on business. Business relations concern business among people, which is why they must be built by people, she said.

Similarly, she believes that the planned enhancement of economic and political cooperation in the eurozone will give fresh impetus to political and economic relations only if member states manage their public finances better and run their economic policies better.

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