The European Bank for Reconstruction and Development (EBRD) is launching a new means of judging the progress made by a single country in making its commercial law internationally acceptable. Slovenia is the first country to be assessed, in a report published recently.

The new tool, known as a “Country Law Assessment ‘, draws on more than a decade of experience by the bank in tracking legal transition across central and eastern Europe and the Commonwealth of Independent States. Each assessment evaluates core commercial laws using international standards as a benchmark – and takes a hard look at how laws actually work in practice, drawing on the views of local lawyers working in private practice.

Slovenia, for instance, is found to have made extensive reforms in the legal system it inherited from the former Yugoslavia. Its path towards joining the European Union earlier in 2004 has been smoothed not only by the establishment of a market-oriented economy and stable democratic institutions but also by significant progress in its legislative alignment to the acquis communautaire. Yet, although it has developed a legal system comparable to that of other advanced transition countries in central and eastern Europe, the assessment reveals that a number of aspects of Slovenia’s commercial law remain to be reformed. A draft law on concessions, prepared with EBRD assistance, is designed to improve the situation. Insolvency laws are in particular need of reform, as reflected in the assessment which identifies where specifically the law is deficient.

Assessments for other countries will be released when the corresponding country strategy is published on the bank’s website.

The Country Law Assessments are published primarily for the benefit of those who make or influence legal reform policy in the countries in which the EBRD operates. It is hoped that they will also be of value to everyone interested in understanding the commercial laws in the region and how they work.

More than a decade of substantial and continued reforms led Slovenia to membership in the European Union in May. Yet important challenges lie ahead, in particular for the country to pursue its economic integration in the EU and play an active regional role, the EBRD says in its new strategy for Slovenia.

The Slovene authorities have identified a greater level of competitiveness and internationalisation as key objectives for the development of the economy. Challenges include the growth of domestic companies at national and international level, attracting further foreign direct investment, enhancing the business climate and fostering the development of small and medium-sized enterprises and services.

Improved access to long-term finance will create jobs, support diversification of the economy and help reduce regional disparities.

Therefore, the EBRD will focus on the support of the local corporate sector through equity and structured finance, including financing of cross-border investments.

The bank’s priorities as outlined in the strategy are:

  •  In the enterprise sector, to support the restructuring and expansion of local companies and share risk with foreign investors. The bank also stands ready to support viable privatisations of the remaining state enterprises.
  •  Besides improving access to long-term finance, in the financial sector, to support equity funds for regional investment. The bank supports the privatisation, restructuring and integration of the banking and insurance sectors.
  •  In the infrastructure and environment sector, to facilitate private sector involvement in close concert with the EU.

The EBRD has supported 34 projects in Slovenia worth €1.7bn. It has recently completed an analysis of Slovenia’s commercial laws – the first of a series of such analyses of legal transition across central and eastern Europe.