Author: pengovsky

I was about to write some more on Igor Bavčar and his fall from grace, but it will have to wait a couple of days, as good old World War II themes are again on the agenda. This time it’s about whether a street in Ljubljana should be named after Josip Broz Tito.

Josip Broz – Tito

In socialist Yugoslavia every republic and region had a town or a city named after Tito. There were Titograd (Montenegro), Titovo Velenje (Slovenia), Titova Korenica (Croatia), Titov Drvar (Bosnia-Herzegovina), Titovo Užice (Serbia), Titov Veles (Macedonia), Titova Mitrovica (Kosovo) and Titov Vrbas (Vojvodina). On top of that there were countless streets, roads, squares, circles, boulevards and avenues, but – curiously enough – no airports However, with ascent of democracy most of these topographical items (my use of euphemisms impresses even myself) were renamed in favour of other heroes or geographical features. Thus, in Ljubljana Titova cesta (Tito Street) was split in two and renamed Slovenska cesta and Dunajska cesta – Slovenian Street and Vienna Street respectively. But some survived. While Velenje dropped its adjective. it did retain its very own Tito Street. As did Koper and some other Slovene towns and cities.

However, in the wake of discovery of Huda Jama massacre, Janez Janša’s SDS (echoed by the entire political right wing) called for removal of any and all topographical references to Tito, as well as removal of his statues – although there is only one left on public display (you guessed it: in Velenje).

The call received a cool-to-frigid response, despite the fact that SDS ventured to portray Josip Broz – TIto as a mass murderer and a dictator. Or maybe that was the very reason for a muted response. Because while Tito was definitely responsible for post-war massacres (he was at the top of the military and political command structure) and he definitely was an authoritarian (oscillating between a harsh dictator and a benevolent non-elected leader, depending on circumstances), he also won the war, was instrumental in keeping at least part of Primorska in Slovenia and – last but not least – decentralised Yugoslavia to the point of making republics de-facto independent. Not to mention the usual socialist features of high employment and good social and health care.

In short, in Slovenia Tito is remembered for things both excellent and terrible.

However, in response to SDS’ call for complete removal of reminders of Tito from public spaces, Ljubljana mayor Zoran Janković started stirring the pot as he proposed that a new street, next to the future Stožice football stadium is to bear the name of Josip Broz Tito. Naturally, the right wing went apeshit, with Mlada Slovenija (youth organisation of NSi, Janša’s former coalition partner) going as far as saying that “Ljubljana cannot have a street named after Tito” and started collecting signatures against it all over Slovenia (mostly via internet).

Personally, I think the youth at NSi should go stick their heads in the bucket, because I will not have people from other parts of Slovenia telling me how streets in my city will be named. On the other hand, mayor Janković is needlessly stirring up shit, because there really is no need (neither political nor moral) to have a street named after Tito again – if another street had to be stripped of his name in the first place. As for SDS – their call is nothing short of rewriting history, a past time extremely popular with that particular party. Which shouldn’t come as a surprise, really. However – I have a distinct felling that there is a hidden agenda. Namely. if a street is stripped of it’s name, it will have to be renamed. No points for guessing after whom…

As the world economy is going down the shitter, Slovenian financial sector is along for the ride. Companies which as much as six months ago rocked the place and were seen as major players in everything from food industry to media are falling apart faster than you can say “Bohemian Rhapsody“. Naturally, we’re talking about Igor Bavčar and his Istrabenz and (at the moment to a lesser extent) Boško Šrot and his Laško brewery. Both Istrabenz and Laško have been targets of MBO’s, executed by Bavčar and Šrot respectively. With a little help from their former friend and his government they managed to get a carte blanche for buying out companies they ran. But as they lost favour with former PM Janez Janša they were styled as tycoon, with Boško Šrot being the main target of Janša’s revenge, for snatching Delo newspaper – a trophy much coveted by Janša – from under his nose. Igor Bavčar, on the other hand escaped rather unharmed as he and Janša were old war-buddies.

Igor Bavčar. Not Happy. (source)

But in the end it was Istrabenz which crumbled first, declaring insolvency in the middle of last week. The company has most of its assets invested in financial markets and suffered terribly from markets going south. Which would have been bad enough had things been orderly. But Igor Bavčar ran up an enormous debt, money which he used to expand and invest (unwisely, as it turned out) but also to finance his MBO – and in doing so he ran up a debt of about € 900 million (yes, nine hundred million euros), amounting to about 85% of the value of the company. Which is fucking bad and a clear case of casino economy.

Bavčar got in the game far too late stayed in for far too long. In the end his fortunes turned against him and his assets all but evaportated. At which point the banks got involved and wanted their money back. But there was a catch. For € 900 million of borrowed money Bavčar put up only € 200 million worth of assets, meaning that the banks gave the remaining 700 million just like that, hoping – just like Bavčar did – that capital returns will be big enough and will last long enough that extending a credit line exceeding the first US bailout package will not seem like a spectacular stupidity.

Well, it does.

As Istrabenz’s stock went into a freefall, crashing at a mere eight percent of its peak value, bankers finally got off their asses and started making nervous noises about their money. The fact that the company’s largest creditor, the Nova Ljubljanska banka (NLB) is partly owned by the state only complicates matters further. And then there are Istrabenz stockholders, who own a whole lot of worthless stock and must include it in their balance sheets. Among other things this has contributed heavily to Petrol, a partly-state owned oil-and-energy company to post a loss for the first time in the history of independent Slovenia.

Some are tempted to say that Istrabenz is too big to fail. Indeed, if it goes down the banks will lose the better part of those 700 million and it is quite possible that the government would have to use taxpayers’ money to plug the hole, a scenario Slovenia has once seen already – when the government of Janez Drnovšek opted to rid NLB and it’s Maribor rival NKBM of bad debts using taxpayers’ money and keep them rather than sell them dirt-cheap under an IMF dictate to some multinational corporation. On the other hand, some say that banks wouldn’t suffer as much and that Istrabenz should declare a bankruptcy, get rid of toxic assets and start afresh.

And now the banks on one side and the owners on the other side are quarreling about how to salvage the situation, whereas they’re mostly trying to salvage their face. Banks claim that they are the “economic owners” of Istrabenz, while true owners obviously dispute that and manoeuvre to have their people control the Supervisory board. Not that they did a brilliant job of supervising thus far.

And finally, there’s Igor Bavčar, CEO of Istrabenz whose share in the company he bought out is more or less worthless, but is reluctant to leave the post, just as a gambler doesn’t want to leave the table as long as there’s a chance of winning the big one.

But while Igor Bavčar is at the moment the most prominent of fallen financial angels, he is by no means the only one. Boško Šrot of Laško Brewery is apparently facing a similar fate, as is the investment industry as a whole. Apparently various investment firms, big and small, ran up as much as € 2.5 billion in debts, mostly putting up their investments as collaterals. And since the stock-market went down the drain, there is a real danger of these debts becoming highly toxic.

2.5 billion is a lot of money in Slovenian terms.

Minister of interior Katarina Kresal yesterday – as expected – survived the interpellation (effectively a vote of no confidence) called by Janez Janša’s SDS.

Katarina Kresal making her rebuttal. In the background: PM Pahor, ministers Svetlik and Lukšič (source)

Officially, the vote was called on the basis of Kresal wrongfully implementing the decision of the Constitutional Court concerning the so-called erased (note the “so-called” manoeuvre) saying (among many wonderfully stupid things) that issuing decisions on permanent residence will generate a wave of suits against the state which could amount to as much as a billion euros in damages and that The Quartet is solving an unimportant but potentially costly problem at a time when most people face economic hardship.

There were other rhetorical bravuras, mostly delivered by Janša’s chief attack dog and Goebbels-wannabe Branko “Gizmo” Grims, who took center stage during 14+ hours of parliamentary debate which was more or less a zillionth re-run of the same old story. However, this time the old stance of “erased-were-collaborators-and-deserved-what-they-got” was supplemented by linking their potential claims for compensation to economic crisis, saying the country cannot afford costs of judicial processes by 25.000 people and (what horror!) pay for damages.

Which is yet another example of how SDS pictures the rule of law: selectively.

On the other hand, Kresal enjoyed what was probably her most glorious moment to date. She delivered an extremely strong speech debunking claims of the opposition. But most importantly, she maintained that the issue goes to the very heart of human rights and that there should be no ifs and buts about it, if we are to have a rule of law in Slovenia. All in all she gave a very strong performance and came off as being able to hold her own. Which means that she made leaps of progress since she entered Slovenian politics a little more than a year ago.

As for SDS’s manipulations with the issue at hand, Kresal repeated a sentence by Abraham Lincoln and much later by Bob Marley, both of whom said that you can fool some people sometimes, you can even fool some people all of the time, but you can’t fool all of the people all of the time.

Not that this is the end of it. The opposition said that they will have the parliament form an parliamentary investigative committee which will investigate whether the issue of the erased is being solved properly. Which is just another way of saying that they will keep the issue on the back-burner until next election cycle when you can be sure it will explode once again, but in a much tougher economic environment.

They did it with the Roma in 2004 and won the elections. Question is will they fool enough people in 2012.

As of Monday the Government Institute for Macroeconomic Analysis and Development – the aptly named IMAD – published new forecasts for Slovenian economic growth.

PM Borut Pahor and finance minister Franci Križanič (brushed up from source)

Growth? Think again…

IMAD predicts that Slovenian economy will shrink by 4 percent in 2009, which would apparently be the largest economic downturn in history of independent Slovenia. Apparently even independence itself and consequent loss of Yugoslav markets didn’t hit Slovenian economy as bad as this. New unemployment projections now show that as much as 100,000 people might find themselves being laid off, which would bring unemployment to about 9 percent.

Admittedly, the people at IMAD are not the quickest of cats at the best of times (its former director some three years ago famously said that there is no way for a price of a barrel of oil to go above 100 dollars) and they have maintained until recently that Slovenia will experience minimal growth, but this prediction is a much-needed reality check. It means that the government of Borut Pahor will have to dig deeper, faster and harder than anything we’ve seen to date.

Among other things this means that rebalancing of the budget which the parliament is expected to approve today is more or less worthless and that finance minister Franci Križanič and his team will have to go – in the words of Wile E. Coyote – back to the old drawing board. When asked about it last week, Križanič said that the crisis will turn in the middle of this year. The problem is that he sounded as if the crisis must turn in the middle of the year. As if they just spent their last bullet.

PM Borut Pahor adopted a hitchiker’s attitude as is saying (in nice, big, friendly letters): Don’t panic!. Some quasi-experts think otherwise and say it’s time to panic. Both pieces of advice are wonderfully useless.

Lovely…