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At the Business Breakfast of the American Chamber of Commerce – AmCham Slovenia, our guest Egon Zakrajšek, PhD, a Deputy Associate Director in the Division of Monetary Affairs of the Federal Reserve System in Washington, DC, revealed to many gathered leading Slovenian and foreign economists and foreign ambassadors his personal views on global, American, European and Slovenian economic and social situation.

In his opinion, immediate measures are necessary, as are urgent the complete, constructive – and above all – long-term solutions, that should base upon the analysis of past sore period and upon the thorough and realistic analysis of the causes for the global crisis that has been lasting for so long. He pointed out the consequences of such crisis, which are reflected in social situations, large and growing unemployment (especially in Europe, and in the USA as well), and consequently in lowering the standard of living. He explained that the unemployment rate has at the global level reached historic proportions and that the most problematic is the long-term unemployment in particular. Furthermore, he made a comparison of the level of GDP in Europe – the bad news is the recession in Italy and Spain, whereas there is a surprising percentage increase of GDP in Germany, which is encouraging news for all.

How to fill in the gaps in Slovenia in order it becomes more attractive for foreign investments: Egon Zakrajšek, PhD, believes it is of utmost importance first to find out and to get to the root of the actual problem (i.e. find out what DOES NOT work) and then based on the findings proceed. It has to be taken into consideration what do the foreign investors as well the VC dislike. It is definitely the sense of uncertainty in the market, high tax rates. »Slovenia has to generally change the environment, reduce tax rates, amend the laws, maximally increase the rate of transparency in operations at all levels – then the foreign investors will arrive!« is convinced Egon Zakrajšek, PhD. He is also convinced that the savings cuts are not adequate and expressed the necessity for the pension reform, the reform of labor market and rehabilitation of the banking system, which is practically insolvent. Egon Zakrajšek, PhD is aware that the problems are of course hard to avoid, however at regained fundamental trust in law and financial system, people will certainly recover again.

»Slovenia is a small market, but very highly educated, with good infrastructure and I do not see any reason why it could not be successful. The government must urgently invest in education, human capital and economic capital. The Slovenian »know how« is great! You only need a different manner of thinking«, is convinced Egon Zakrajšek, PhD.

»Parastatal tango«, where the state has too much of self-interests, may limit the growth of investments, he explicitly expressed his thoughts.

The 5 most important issues Slovenia has to attend to with priority according to Egon Zakrajšek, PhD:

1. »Cleanse« the banking system

2. Increase the level of responsibility and flexibility of the labor market

3. Solve the demographic problems and accordingly introduce necessary changes

4. Firmly change the pension system (the pension reform)

5. Open to foreign ideas and foreign capital

»… and you will succeed!« Egon Zakrajšek, PhD favorably concluded his thoughts.