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LIFE IN TRANSITION
Miha Polak, Acting Head of Slovenia, EBRD.
Slovenia The Slovenian market requires EBRD to engage in areas where it remains important, such as equity fi nancing, capital market instruments, cross-border investments and green economy technologies. These are broadly areas where we see the main opportunities, with focus primarily on the manufacturing and services segment but also on fi nancial institutions given the ongoing consolidation in the banking sector. Also, the Slovenian private sector is vibrant with a lot of so-called “hidden champions”. These are successful SMEs serving niche markets or operating in the B2B segment. They rather stay invisible to a wider public and they are the type of innovative businesses the expansion of which the bank aims to support. As per challenges, the main problem is the slow pace of
privatisation and the role of the state. Slovenia did not undergo a comprehensive privatisation process during the 1990s. As a consequence, state involvement in the economy is still high and the profitability of Slovenian SOEs is low. But an even bigger problem is the (frequent) cross-ownership of companies, meaning that one
Jacek Kubas, Associate Director, Local Currency and Capital Markets Development, EBRD.
Poland and the Baltics Currently the Polish capital market is much less developed than most European markets. To address this issue, EBRD - in cooperation with the European Union SRSS - is advising the ministry of finance in developing a Capital Market Development Strategy (CMDS). The goal of the CMDS is to "identify necessary institutional and regulatory changes (including changes introduced by the European Commission within the frame of the Capital Markets Union), resulting in a growth of
the importance of equity and debt financing in the Polish economy”. The Capital Markets Development Strategy is a government deliverable arising from the Polish Responsible Development Strategy. It is the fi rst fi ve-year plan in a series of fi ve-year capital market development strategies that will be created to facilitate economic growth and promote Poland’s long-term development. The CMDS is the fi rst detailed national capital markets plan for Poland that builds on Poland’s classification as a developed market. It covers the period 2019-
entity owns another and vice-versa. While the interconnectedness of state-owned banks with poorly performing SOEs had contributed to the excessive debt build-up before the crisis, cross-ownership also adds to governance problems and provides insufficient incentives to improve productivity. •
2023. The ministry of fi nance, EBRD and EU SRSS are motivated to ensure the benefits will be dynamic, promoting the Polish capital markets to a new level of development and allowing them to be more competitive. Together with the relevant authorities, the EBRD has also come up with the idea of developing a joint bond and capital market for the entire Baltic region. Th is has essentially kick-started the idea of a pan-Baltic capital market. In November 2017, a Memorandum of Understanding was signed in Brussels by all the Baltic ministries. The purpose was simple: to create a panBaltic capital market in order to strengthen the respective economies and stimulate investment to create jobs – all in line with the European Commission’s Capital Market Union (or CMU) Action Plan and the EBRD’s priorities in the region. Th is resulted in an increased push for the reforms in relation to capital market, including creation and implementation of the framework for Pan-Baltic Covered Bonds. As a result, over the last two years we have seen an increased number of capital market transactions across the Baltics. •