The collapse of communism in Europe at the end of the 1980s and early 1990s opened up Eastern Europe's markets to foreign investors. But while foreign capital was needed in countries like Slovenia, there were also reservations about what it might do to the country.
Since gaining independence from Yugoslavia in 1991, Slovenia has had mixed feelings about the way ahead. On the one hand, its domestic market of 2 million is not large enough to produce companies that can compete with European or global powerhouses. For some people, alliances and mergers with foreign banks would serve as a springboard into bigger markets. But for others, there is the concern that giving up state-run banks to foreign ownership would be surrendering too much control. They would prefer the Slovenian political establishment to maintain a guiding hand.
Goran Novkovic, the deputy editor of the daily newspaper Finance:
"You often hear about this fear that foreign owners would have a negative effect for customers, but I don't agree with that, because the thing that would occur is that banks will be depoliticised, something which is currently a problem."
So far, the state has been reluctant to give up its influence on national banks. A recent U.S. Department of State report noted that in Slovenia there were generally "a number of practical impediments to increased foreign direct investment" coupled with "continued administrative barriers to business." But the state's grip has been relaxing, slowly. A 35% stake of Slovenia's largest bank, Nova Ljubljanska Banka, was recently sold to a Belgian bank. Italians bought stakes in Banka Koper, Austrians in Krekova Banka.
Questions are still swirling around Slovenia's second-largest bank, Nova Kreditna Banka Maribor, (NKBM) which will develop a privatisation plan this year. The government recently appointed a new supervisory board for the bank. But Slovenia's Prime Minister Janez Jansa was quick to note that the government would maintain controlling stakes in the bank and that shares in NKBM would be sold according to whoever could provide the most benefit to Slovenian taxpayers.
Mr. Novkovic believes no major changes are on the way for NKBM:
"The only big change would occur if a big, foreign strategic partner would come in and bring them into eastern markets. However, there is not a big possibility that something like this will happen. Probably what will happen is that the bank will be depoliticised and costs will be cut. It's quite possible that even with privatisation the bank will stay on the domestic market."
In some European countries, such as Estonia, foreign owners run over 90% of the country's banks. Although Slovenia is comparable to Estonia in terms of size, it does not share its willingness to let go of its banks. Its path seems to be marked instead by moving slowly, cautiously and with constant reservations.
Whether this proves to be beneficial for the country or not remains to be seen.
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