The European Commission warned Slovenia about the weakness of its banking sector and the need to introduce structural measures in its annual Competitiveness Report released in Brussels on Wednesday. In terms of the competitiveness of its industry, Slovenia has been placed in the middle tier.
The middle tier features countries which are doing well in certain areas, while facing difficulties in others, according to the report, which measured the competitiveness of EU members on the basis of ten indicators.
Slovenia, which is in the company of Cyprus, Greece, Italy, Malta and Portugal, needs structural measures in order to boost growth and competitiveness and improve productivity. It should also improve the business environment to attract investments and encourage exports, the Commission said.
Slovenia has one of the lowest shares of foreign direct investments relative to the GDP among the EU newcomers - 31% in 2012, says the report, also pointing to the inefficiencies in insolvency proceedings among the bottlenecks hampering investments.
The weakness of the banking system is also highlighted, as it remains unstable and limited in terms of loans. Improving banks' balance sheets and recapitalising banks which operate well are the most important conditions for stabilisation of the economy, according to the report.
In terms of innovation, Slovenia is around the EU average, but the relative success has to be maintained, which requires investments financed by the state and focusing on measures to encourage research and innovation.
The Commission also says that Slovenia's labour productivity is below the EU average. The country should speed up implementation of the energy legislation and pay special attention to transport infrastructure, as CO2 emissions are above the EU average.
Source: Sloveniatimes
