STA, 16 January 2019 - Slovenia regrets that the UK parliament failed to confirm the Brexit divorce deal last night. Prime Minister Marjan Šarec said that the UK should rethink whether Brexit is really worth pursuing or whether this is a dead end and staying in the EU is the better solution.

A statement from the prime minister's office on Wednesday said that the divorce deal was a fair compromise, a balanced document, that allowed a regulated and controlled exit for the UK.

Slovenia will continue to support the approval of the deal in the EU, as the document is the best solution for the future and a necessary foundation on which to build relations after 2021.

Similar to the rest of the EU, Slovenia expects the UK government to present a plan on future steps as soon as possible. The statement also expresses hope that "the coming weeks and months will see enough political wisdom to avoid the worst outcome".

Slovenia's key wish is to preserve constructive and comprehensive cooperation even after Brexit, which must in no way infringe on the rights of citizens of Slovenia and other EU countries living in the UK. On the other hand, Slovenia will guarantee "an appropriate level of rights for UK citizens" living in the country.

Foreign Minister Miro Cerar also expressed regret over the vote. He tweeted last night that the EU had negotiated in good faith and with the wish to preserve constructive cooperation in the future.

Parliamentary Foreign Affairs Committee chair Matjaž Nemec commented on the situation for the press, saying that the process was "a good lesson for us" and that he hoped that "this will sober up the global political arena".

"When politicians become politicasters, when personal and party interests are put before those of the state and its citizens, there is populism that diverts attention from the real picture."

"All those who caused this in the UK have remained well hidden and no longer expose themselves, while regular people will start feeling immediately what it's like to be a third country citizen in relation to the EU," said Nemec.

He added it was hard to predict what would happen next. It is also hard to say whether the country will hold another referendum.

The House of Commons turned down the divorce deal with 432 votes against and 202 in favour last night. Subsequently, the opposition Labour Party requested a no-confidence vote against Prime Minister Theresa May.

The motion will be put to a vote this evening and if May is ousted and a government coalition cannot be formed within a fortnight, the UK will face an early election.

However, this is not a very likely scenario, according to Jure Vidmar, a professor of public international law at the University of Maastricht.

While the divorce deal was voted down due to infighting in the Conservative party, "bringing down the deal is one thing and bringing down one's own party is a different matter altogether," he told the STA.

If she survives the vote, May has said she will present an alternative plan by Monday. But at least in the short term the EU will not be able to offer anything but some sort of a political declaration, said Vidmar.

These have already been offered and did not convince the sceptics. This could only be done by abolishing the Irish safeguard, which is impossible for the EU, he believes.

"Northern Ireland is the main issue of Brexit and it is practically impossible to resolve. The reintroduction of border controls in Ireland would undermine the peace treaty," said Vidmar.

A no-deal Brexit or an extension of the deadline are the two possible scenarios. The extension could lead to a new deal under which the UK would remain a part of the single market and the customs union, he believes.

The other possibility is a new referendum in which voters would decide between May's divorce deal and remaining in the EU, said Vidmar. An early election is not very likely but cannot be excluded.

All our stories about Brexit can be found here

Chamber of Commerce worried about impact of no-deal Brexit on exports

STA, 15 January 2019- The Slovenian Chamber of Commerce and Industry (GZS) assessed ahead of today's Brexit deal vote in London that there is a 20% chance of a no-deal scenario and that this could reduce Slovenian exports by a fifth.

The GZS's analytics department estimates that Slovenian exports of goods to the UK rose by 11% to EUR 615m in 2018, while exported services were up 9% to EUR 210m. In case of a no-deal Brexit, goods exports could fall by up to 20% in a year, although they would later probably rise again.

A similar reduction would also be experienced by Slovenian exports to other EU member states with close trade ties to the UK, the chamber wrote in a press release.

A no-deal Brexit would present a strong blow in particular to the movement of people, goods, services and capital, with cooperation already being affected by the current uncertainty.

A direct impact has been felt above all by multinationals and regional companies with a two-way value chain and in particular involving Germany, France, the Netherlands and Belgium. Indirectly affected are the supplier companies, meaning also a number of Slovenian companies.

A no-deal Brexit would also mean the reintroduction of border checks and thereby a fourfold increase in the time needed to cross the border. Slovenian hauliers conduct EUR 40m worth of transport for British clients a year, the GZS said, while also highlighting additional costs related to the diverging of standards for products and services.

HMA Honey in July 2018. Photo: JL Flanner

UK Ambassador: Britain Remains Open for Business, Despite Brexit

STA, 16 January 2019 - British Ambassador to Slovenia Sophie Honey assured Slovenian businesses on Wednesday that they would receive ample support, regardless of how the UK leaves the EU, with or without a divorce deal.

The UK will provide businesses the maximum scope of information and clarity so they can prepare for future relations, she told an event on the future of economic cooperation post-Brexit a day after the British Parliament voted against Prime Minister Theresa May's Brexit deal.

She said the British government has prepared advice for British businesses while the Slovenian authorities were doing everything they can to prepare companies for any changes.

The ambassador also stressed that the UK would remain an ideal destination for Slovenian exports and start-ups.

All our stories about Brexit can be found here

STA, 21 December 2018 - The autumn Eurabarometer poll shows that 38% of Slovenians have a positive attitude towards the EU and 18% have a negative attitude. In general, 43% of Europeans think positively about the EU and 20% have a negative attitude towards the bloc.

Half of Slovenian respondents said that they felt like their voice mattered and 45% said it did not. Moreover, 72% said they felt like EU citizens, while the average EU share was at 71%.

The poll also shows a record 75% support for the economic and monetary union, as well as the euro; the support is highest in Slovenia, at 86%.

Nearly 50% of Europeans believe that the bloc's economy was doing well, while 38% think the opposite. In Slovenia, 65% believe the EU economy is good and 29% think the opposite.

The poll suggests that 40% of Europeans are concerned by migrations, 20% are worried about terrorism and 19% by the state of public finance.

In Slovenia 58% of the respondents are worried by migrations, 20% are worried about terrorism and 13% are worried about the economy.

The Eurobarometer poll was carried out between 8 and 22 November. It included 32,600 people from across the EU.

You can get the full PDF report, in English, French or German, here

STA, 17 December 2018 - A report on Slovenia's EU funds drawing commissioned by former Minister Marko Bandelli, who was forced to resign in November, points to serious issues at the Government Office for Development and European Cohesion Policy that could cost the country up to EUR 68m in EU funds.

Bandelli ordered a new report after his team found irregularities in the old report, reads an attachment to the report, which was initially planned as public but was sent to Prime Minister Marjan Šarec separately after the Alenka Bratušek Party (SAB) and Šarec agreed on Bandelli's successor.

The leaked document, obtained by the STA, points to irregularities such as discrepancies between the data on the drawing of EU funds available to the public and those available to his office.

IT seems to be one cause of the problem

The government office has had issues with the information system for some time now, but Bandelli's team said in the document that the trouble with the system, which has compatibility issues with the IT system at the Finance Ministry, was such that "it poses a serious threat that Slovenia will (permanently) lose the awarded funds for the first time this year".

Slovenia has to use the EU funds earmarked for the country until 2015 by the end of this year. According to Development and European Cohesion Policy Office State Secretary Nevenka Ribič, Slovenia could lose around EUR 68m because of the issues.

"I hope we'll bring the figure to zero on time, but I cannot make any promises. We're working on it," she said, adding that it had appeared at first that more than EUR 180m were at risk of being lost.

Moreover, the leaked document says that the office was not quick enough in tackling the issues in the previous term, when it was led by Alenka Smerkolj.

According to the document, an audit carried out by the company KPMG unveiled these issues, but the office failed to act on it.

On the other hand, Igor Lakota, the deputy government secretary-general who headed Smrekolj's cabinet in the previous term, told the STA on Monday that the report did not paint a realistic picture.

There have been issues, he acknowledged, but the audit by KPMG led to Smrekolj finding a new contractor for the IT system, which managed "to resolve some of the key issues we had".

In turn, the payments mainly started in September, and Lakota says that only EUR 19m in EU funds are still under threat at the moment, but that these claims are to be sent to the Finance Ministry, "so all the funds will be taken care of".

Lakota may be fired and investigated by the police over irregularities

Moreover, Lakota and three other employees of the office in the previous term, point fingers at the previous government's decision to keep the office and the Finance Ministry on separate IT systems instead of using a single one.

"This has led to a very complicated system ... for the ministries and the end uses of the funds," they said in a response to the document they sent to Šarec, who is reportedly seriously considering letting Lakota go.

Commercial broadcaster POP TV reported that Lakota is a person of interest in two investigations related to his stint at the office, with the police investigating the IT system and connected public procurement, and the public inspectorate investigating alleged irregularities with which Lakota increased his monthly earnings by around EUR 600.

STA, 6 December 2018 - Interior Minister Boštjan Poklukar welcomed in Brussels on Thursday the EU Council's partial agreement on the reform of Frontex, the European border guard, which includes a stronger mandate in the returns of migrants and cooperation with third countries. Slovenia meanwhile remains reserved with regard to the remaining elements in the reform proposal.

Poklukar said on the sidelines of the Justice and Home Affairs Council session that Slovenia supported the stronger mandate and cooperation with countries beyond those directly neighbouring on the EU.

It is however reserved about the remaining points of the proposal, which also seeks to establish a European Border and Coast Guard standing corps of 10,000 operational staff with executive powers by 2020.

Photo: frontex.europa.eu

Slovenia is in principle in favour of a gradual formation of a standing corps, it is however reserved about the 10,000 figure, Poklukar said.

He also noted that it had still not been possible to see under what criteria or by which key responsibilities would be divided among member states.

Poklukar reiterated that all European police forces are facing staff shortages and that this is also a major problem of Slovenia's police force.

The minister moreover expressed Slovenia's interest to have its missions sent to Western Balkan countries.

Since Frontex, the European Border and Coast Guard Agency, already has a lot of possibilities for cooperation with third countries on the basis of existing legislation, Poklukar expects concrete steps already in the coming months.

Photo: frontex.europa.eu

In line with expectations the ministers failed to make a breakthrough in a bid to find a comprehensive agreement on reform of the EU's asylum system.

European Migration Commissioner Dimitris Avramopoulos repeated that time was running out and some key dossiers would have to be agreed before the Euro elections in May.

Considering a lack of progress on asylum reform, the commissioner called for breaking up the asylum package, by passing five dossiers right away, while continuing debate on the two most contentious ones, including mandatory refugee quotas.

Minister Poklukar said that Slovenia would like the issues resolved and that "this must be in a package", but he did say that much debate would still be needed to align views.

STA, 3 December 2018 - Slovenia will take over the rotating EU presidency for the second time in the second half of 2021, having already held it in the first half of 2008. Preparations started less than two weeks ago with a several-month delay. The costs are estimated at EUR 75-80m. Finding qualified staff has been identified as the biggest challenge.

Slovenia's presidency of the Council of the EU in 2008 was praised as successful, but the stint in 2021 will be much different as the role of the country holding the presidency has changed significantly after the 2009 Lisbon Treaty, which introduced president of the European Council and the foreign policy chief.

The presidency of the Council has thus lost influence: the prime minister of the EU presiding country no longer chairs the European Council, and its foreign minister no longer represents the EU externally.

Almost all government departments will be involved

Preparations for Slovenia's presidency started with a delay of several months because of the general election and government formation, which Prime Minister Marjan Šarec confirmed in a recent interview with the STA.

The government launched the preparations on 22 November with the appointment of Igor Mally, a state secretary at the prime minister's office, as head of the project.

The project will be headed from the prime minister's office, but the preparations will involve virtually all government departments.

According to Mally, a rough staffing plan was made at the beginning of the year and the experiences of the countries holding the presidency have already been reviewed.

350 full-time jobs will be created, starting next year

In 2008, the project of EU presidency cost EUR 62.3m. Considering inflation, and the costs of other countries of a similar size that recently held the presidency such as Estonia, Slovakia and Bulgaria, the costs are estimated at EUR 75-80m, Mally said, adding that a more reliable estimate would be made at the end of February.

Most of the funds will go for the 350 full-time jobs. Officials in Brussels and Ljubljana agree that finding the right staff and providing them with proper training will be a major challenge.

Ministries will start hiring at the beginning of next year, but most of the job vacancies are expected to be filled in 2019 and 2020.

Compared to 2008, ministries now reportedly have much less staff with required skills. Ten years ago, a pool of staff experienced in European affairs was available as part of the Government European Affairs Service.

After the EU presidency, many of these people got a job at EU institutions and the service was merged into the Foreign Ministry.

Mally said that those who were actively involved in the 2008 presidency would train the new staff.

A packed schedule over the six-month EU presidency

During the six-month spell, the country will preside over around 30 ministerial sessions and more than 2,000 various working meetings and host around 15 ministerials at home.

Since most of the meetings will be held in Brussels, the Slovenian permanent representation there will need to be expanded - both in terms of staff and rooms.

Mally expects 119 officials to be sent to Brussels, which means the number of staff at the representation office will almost triple.

The office will thus have to at least temporarily move to new premises and a decision on this is expected to be made shortly, according to Mally.

Most of the meetings in Slovenia will be held at the Brdo Conference Centre, which Mally believes is the most suitable venue from the financial, logistic and security points of view.

The priorities of Slovenia's EU presidency will be determined in cooperation with Germany and Portugal to ensure continuity of the agenda. The trio also cooperated ten years ago.

An obligation and an opportunity

Among the possible topics that could be Slovenia's priorities Foreign Minister Miro Cerar recently mentioned the issue of integration of the Western Balkans, security in the face of migration, the strengthening of the welfare state, and modernisation and digitalisation.

Slovenia's Ambassador to the EU Janez Lenarčič, who was European Affairs Ministry state secretary during Slovenia's first stint at the helm of the EU, believes the presidency is both an obligation and an opportunity for the country.

Mally said each presidency wanted to leave a mark. "It's a matter of ambition. Either you want to carry out the presidency merely as a routine or you want to take advantage of the opportunity to make a difference, which is what Slovenia is aiming for."

STA, 26 November 2018 - Education Minister Jernej Pikalo discussed how to prevent anti-Semitism at Monday's session of the EU's Education, Youth, Culture and Sport Council in Brussels, pointing to the thin line between freedom of speech and hate speech and noting that the educational system played the key role in preventing the spreading of hatred.

The discussion was held at the initiative of the Austrian presidency of the EU in the context of the recent anti-Semitic attack in a synagogue in Pittsburgh, US.

Pikalo said that all European societies had the problem of defining the line between freedom of speech and hate speech, which was why all kinds of deviations were taking place.

Related: Our stories on hate speech can be found here

The minister stressed that more proactivity in the prevention of spreading of hatred towards any individuals or groups would be introduced in the educational system.

"Policies and approaches in this field must be especially sensitive and proactive, because we must not allow any of the historical situations we were in to repeat," Pikalo stressed.

He said that the Holocaust must not be only a history lesson, but a lesson for the present time, adding that Slovenia was playing an active role in that respect.

Slovenia sends teachers to Israel each year

Pikalo noted that around 50 teachers from Slovenia went to Israel every year as part of an educational programme, adding that Slovenia also had curricular and extracurricular activities which promoted democratic awareness.

In the context of hate speech, the minister also commented for the press on the call by Prime Minister Marjan Šarec to state-owned companies to reconsider pulling ads in the media which instigate hate speech.

Related: Our stories on Jewish Slovenia are here

Pikalo said that he supported Šarec's call. "It does not matter at the moment what direction the matter will take," he said, noting that the prime minister was not calling on the companies to act, but to consider an idea.

The EU ministers also discussed youth-related topics, focusing on the question of how to best implement the new European strategy for youth.

Slovenia wants greater integration of EU education

Pikalo said that from now on, the sessions of the government council for youth will feature relevant ministers, who would get better acquainted with the problems and challenges faced by the youth sector in Slovenia.

The ministers further discussed the Towards a European Education Area by 2025 document, a new initiative recently unveiled by the European Commission, which includes the idea to establish a network of European universities.

As a country which wants to be at the core of the EU, Slovenia wants to be connected in the field of education, said Pikalo, while noting that educational policies were always national policies.

The minister said that he had received initiatives from two Slovenian universities for cooperation at the EU level, adding that his ministry supported such integration.

STA, 25 November 2018 - Nobody is excited about Brexit, we are saving what we can, Prime Minister Marjan Šarec said in Brussels after the Brexit deal was endorsed at Sunday's extraordinary EU summit. "We opened a parachute about half-way before the ground and now we're counting on it to ease the consequences of the fall," he said.

The leaders of 27 EU member states confirmed a comprehensive and complex divorce agreement with the UK that deals with the rights of citizens, financial settlement, the border on the island of Ireland, a transitional period and a non-binding political statement on future relations.

Šarec said the meeting was over relatively quickly and that everything had gone smoothly and in line with expectations. "We're all aware that it's not a happy occasion, but if the ratification is successful we have prevented the worst," he said.

Premier pa pozdravlja, da je EU-27 s potrditvijo sporazuma prispevala k temu, da bodo negativne posledice izhoda manjše, kot bi bile sicer. Izrazil je tudi upanje, da bo britanska stran v prihodnjih tednih in mesecih ravnala preudarno.

?Thierry Monasse/STA pic.twitter.com/NBNpeEjJ4X

— Vlada Republike Slovenije (@vladaRS) November 25, 2018

May prefers a deal to no deal

In the second part of the meeting, the EU leaders were joined by British Prime Minister Theresa May. According to Šarec, May expressed her satisfaction with the deal, bearing in mind that the only other alternative would be a non-deal, which would mean big problems.

Slovenia believes the deal reached was the best possible solution in the given situation, regardless of the fact that some in the UK say that more could have been achieved, Šarec said.

He said the negotiation team led by Michael Barnier had done a very good job and should be congratulated. He rejected criticism that the team only talked to Berlin and Paris in the end, saying that it was logical that more attention was devoted to the most affected countries.

The UK was a tough negotiator and it would not be fair to judge their negotiation skills from the outside now, Šarec said.

But the Slovenian prime minister warned that the work was not over yet. The Brexit deal now faces the toughest challenge in the British parliament.

Šarec is moderately optimistic about this, believing in the sound judgement of British MPs.

#EU27 leaders formalise #Brexit agreeent during special #EUCO meeting. @eucopresident pic.twitter.com/PBSUbMpBar

— EU Council TV News (@EUCouncilTVNews) November 25, 2018

You can read all our stories about Brexit and Slovenia here

STA, 21 November 2018 - The European Commission has established that Slovenia'a draft budgetary plan for 2019 is at risk of non-compliance with the requirements of the Stability and Growth Pact. It has called on Slovenia to take appropriate measures and send a revised plan back to Brussels at least a month before submitting the 2019 supplementary budget to parliament.

The assessment published on Wednesday had been expected, as the new government, which took over in September, has sent the draft budgetary plan for 2019 under the no policy change scenario while it has recently engaged in changes to social transfer and pay policies. Slovenia also received the same mark last year.

The European Commission has called on Slovenia to take measures to bring the budget in line with the EU rules, especially when it comes to the difference between the recommended and planned structural effort and the difference between the recommended and envisages rate of growth of primary net expenditure.

Four other countries at risk of non-compliance

Joining Slovenia in the group of countries at risk of non-compliance are Belgium, France, Portugal and Spain.

The Finance Ministry said that Slovenia would sent to the Commission next year a draft budgetary plan which would be "as compliant as possible with the EU rules". It will be prepared along with the 2019 supplementary budget.

The ministry added that it had already informed the Commission in mid-October, when the draft plan was sent to Brussels, that a new draft would be made at the beginning of next year.

It said that the plan had been submitted under the no policy change scenario because "it is completely usual that right after a government change draft budgetary plans do not include envisaged measures."

The European transport commissioner, Slovenia's Violeta Bulc, commented on the assessment of Slovenia's budget by pointing to graphs for the last 15 years and recognising "very demanding, but successful steps Slovenia has made in the last four years."

According to Bulc, Slovenia has recorded a very good economic growth in the recent years, driven by strong investments and increased exports. The growth of public investments will continue to have a positive effect on GDP, she added.

The commissioner stressed, though, that Slovenia should not forget about the need to maintain stable public finances and ensure sustainable growth. This means a careful increase in public spending - of wages and social transfers.

Slovenia has addressed its macroeconomic imbalances

In a written statement, Bulc pointed to two aspects which represent a risk for the proposed budget to fail to comply with the requirements of the Stability and Growth Pact.

"What needs to be adjusted is the difference of 0.3% of GDP in state expenditure and the difference of 1.4% of GDP in reducing debt to up to 60% of GDP," she added.

Meanwhile, Slovenia will not undergo an in-depth review of macroeconomic imbalances this year for the first time after 2011.

The decision was expected as the European Commission announced in March that Slovenia had fixed its macroeconomic imbalances, six years after it had entered the excessive macroeconomic imbalances procedure.

All our stories on Slovenia and the European Union can be found here

STA, 13 November 2018 - Marko Bandelli has resigned as development and EU cohesion funds minister after being told to do so or face dismissal by Prime Minister Marjan Šarec. The decision was announced after a session of the Alenka Bratušek Party (SAB), whose head accused Šarec of using double standards, while she also announced a stepped-up push for higher pensions.

Bratušek, who called today's session of SAB's executive council after Šarec told Bandelli to resign over efforts to use his government clout to impact a local election, praised Bandelli's work, while adding he was also capable of accepting responsibility and was thus resigning.

While Šarec was also critical of Bandelli's performance as minister, the main issue seems to have been his communication style, in particular when getting involved in the election race in the municipality of Komen (SW), where he was mayor until recently.

Bratušek suggested that Šarec was using double standards in this respect and should apply the same criteria to all government officials, meaning "those he has defended and those he plans to defend in the future".

Speaking about the party's situation, she said SAB did not enter the government to have three ministers but to work for the benefit of the people, of the young and of pensioners.

While giving up Bandelli, Bratušek took the opportunity to stress the party would insist in what have been SAB's demands for significantly higher pensions - these come as government faces demands from public sector and after a raising of the welfare allowance.

Also mentioning demands related to the healthcare system and the young as non-negotiable for the party, Bratušek said the party would demand explanations at the next coalition meeting on how the commitments from the coalition agreement will be honoured.

"The deadline for the bills to be adopted is 1 January 2019, which means we're actually a little short on time," she said, accusing Šarec of violating the coalition's agreement.

This also applies for the procedure for dismissing and replacing a cabinet minister. Šarec was supposed to have first discussed the situation with Bratušek, she however found out about it from the media and through Facebook.

"If these are the communication channels that the coalition will be using then our time here will be preciously short," Bratušek said.

Meanwhile, Bandelli, who threatened one of the mayoral candidates in Komen with leaving the municipality without the support of his department and of the Infrastructure Ministry, rejected Šarec's accusations regarding the delayed action plan for the drawing of EU funds. He argued he had gotten a lot of work done in the past two months.

"I replaced the main director of the body that carries the main responsibility for EU funds phasing, we changed the operative model and started fixing the problems with the IT system that had dragged on for five years," Bandelli told the press.

He also took a jab at "people currently employed around Šarec", saying some of them were in fact to blame for the mistakes that were made in the past in the phasing of EU funds.

The Commission for the Prevention of Corruption (KPK) had welcomed Šarec's call for Bandelli to resign, labelling the minister's acts and threats as unacceptable.

The anti-graft watchdog said that Bandelli had violated the code of ethics for government and ministry officials, stressing that "it was not a single act".

The KPK noted that Bandelli had also promised to help Komen residents address heavy traffic on a local road in return for forming a list of candidates for the local election and backing the party where he is vice-president.

It said that the minister's integrity had been undermined in this case too, adding that such "disputable practices should not take place in the Slovenian political space."

The watchdog thus welcomes the prime minister's decision and understands it as a sign of support for the idea of integrity of officials at the most senior posts in the country.

Bandelli, who is expected to return to parliament, announced he would continue to work for SAB, the party he helped establish.

Previously: Local Elections - Šarec Orders Bandelli to Resign After Threatening Candidate in Komen

STA, 13 November 2018 - The EU Court of Justice has ruled in favour of a Slovenian company that filed a complaint against Austria over the system of bonds set down in the country's law on the prevention of payment and social dumping. According to lawyer Rudi Vouk, this is a landmark ruling that will have a positive effect on Slovenian companies doing business in Austria.

Čepelnik, a company based in Prevalje near the Austrian border, challenged the law after its client in Austria paid around EUR 5,000 to authorities in Völkermarkt in the company's place as a deposit for alleged violations instead of paying the company's invoice.

The EU court concluded that the legislation of a member state which allows the recipient of services to suspend payments to the contractor or to pay a security to guarantee the payment of a potential fine in place of the contractor "goes beyond what is necessary for attaining the objectives of protecting workers, combating fraud, in particular social security fraud, and preventing abuse".

The ruling is in line with the opinion of EU Advocate General Nils Wahl, who issued an opinion on the case in May. He said that measures like this system of bonds are in violation of the European directive on services and definitely exceed the scope of what is needed to enable national authorities to enforce national labour legislation.

Rudi Vouk, an Austrian lawyer of Slovenian descent, told the STA that the ruling was significant for Slovenian companies doing business in Austria.

Before the ruling, companies were in constant danger of their clients having to pay bonds for them in the event of the slightest alleged infringement of law. Additionally, potential clients were also aware of the possibility and potentially avoided Slovenian contractors.

"This danger has now been eliminated because the European court concluded that [the system of bonds] is not proportionate with the goals. Austrian legislators will have to annul the relevant provisions," Vouk said.

He added that other provisions, including those about minimum fines for infringements, "which are absurd", remain in place.

They have also been challenged at the EU court and given the latest ruling, there are reasons for optimism that the court would decide in a similar manner, Vouk added.

Čepelnik is one of the 121 Slovenian companies that complained with the European Commission over high fines and enhanced control of foreign companies providing services in Austria.

Other stories on the relationship between Slovenia and Austria can be found here