Annex. Progress in main structural reforms

Ring-fenced assets should be fully disposed of the end of the mandate of the BAMC and not transferred as currently envisaged to the sovereign holding company to avoid a permanent postponement of the resolution of impaired assets.

With a prolonged mandate until 2022 the BAMC is enabled to sell all its assets. The Termination strategy and action plan is expected to be completed in 2020.

In the context of the single supervisory mechanism framework, the bank supervisor should more closely monitor banks’ adherence to regulations and guidance, and encourage banks to improve their risk management.

In the context of managing non-profitable loans, the banks are establishing a system of early detection of increased credit risk. The Bank of Slovenia has created guidelines for gradual elimination of impairments for investment and better reporting systems. The Bank has also prepared guidelines for establishing Early Warning Systems.

The law on a central credit register (a database of credits and credit resists and other exposures) was adopted in November 2016.

Encourage distressed firms to apply early for insolvency procedures by better law enforcement concerning the liability of debtors that fail to apply for insolvency procedures in a timely manner, encouraging balance-sheet insolvent borrowers to apply, and distinguishing between honest and fraudulent bankruptcy.

Amendments to the Criminal Code in July 2017 enhanced the scope for criminal sanctions for infraction of the “Abuse of Position or Trust in Business Activity” and “Defrauding Creditors” laws.

Ease restructuring of distressed businesses via simplified fast track in-court reorganisation of small and medium-sized enterprises and establishment of a legal framework for out-of-court restructuring.

In 2016 additional insolvency legislation was adopted, including a shortening of the judicial part of personal bankruptcy proceedings. In addition, previously adopted preventive restructuring proceedings for large and medium companies were extended to small companies. The simplified compulsory (restructuring) proceeding remains applicable to micro companies. At end-2015, the Bank Association of Slovenia adopted Restructuring Guidelines for micro, small and medium-sized companies (SME), which were prepared in association with Bank of Slovenia.

Enforce the existing legislation that limits the duration of certain insolvency procedures. Ultimately, the objective is to end all insolvency procedures within one year.

The 2017 Doing Business Index shows that the duration of insolvency restructuring procedures have dropped below one year.

Continue to gradually cut the combined generosity of unemployment benefits, social assistance and other transfers for the unemployed and inactive persons to increase work incentives and strengthen fiscal sustainability.

No action taken.

Raise pupil-teacher ratios in pre-primary and lower secondary education and class sizes in primary and lower secondary education to reduce costs. Introduce universal tuition fees along with means-tested grants and loans with income-contingent repayments to ensure to boost spending efficiency.

No action taken.

Consider further cutting replacement rates by lowering effective accrual rates and calculating pension rights over lifetime contributions.

No action taken.

Develop equity markets by eliminating political interference into management of listed companies, improved rights of minority shareholders and enhancing operational and financial independence of the Slovenian Securities Market Authorities.

In 2015, the legislative protection of minority shareholders was improved with the introduction of a minimum successful bid threshold of 50% + 1 share.

Streamline processes for accessing business premises, land and building permits.

In mid-2017, measures to accelerate the process of issuing building permits and spatial planning were presented in Parliament.

Broaden access of the unemployed to active labour market policies by merging the Employment Service of Slovenia and the Centres for Social Work.

No action taken.

Implement the government’s unified innovation policy and monitor its progress. Improve collaborative links between major stakeholders of innovation policy.

In 2015, the Smart Specialisation Strategy was adopted, which defines priority areas for R&D investments and innovations.

In 2016 innovation partherships to improve collaboration between stakeholders were created. In addition, the framework for co-ordination and monitoring was strengthened.

Use more extensively research vouchers, funded with EU funds, to promote green innovation.

No action taken.

Upgrade the railway system and improve efficiency of railways, especially in the freight sector.

Since 2015, several investment projects to upgrade the railway infrastructure were implemented.