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German, Slovenian companies better prepared for economic cooling

Ljubljana, 23 October (STA) - Economic cooling is a reality which will also affect Slovenian companies, says German-Slovenian Chamber of Commerce head Gertrud Rantzen. Still, there is no reason for pessimism, as companies, both in Slovenia and Germany, are better prepared for a potential new crisis, which she does not expect to be as bad as the Great Recession.

Rantzen partly agrees with a recent statement by the Slovenian economy minister that mass media are prophesying a new crisis, and since we want it so badly, we will get it.

The German business official said at today's talk on Slovenian-German cooperation in Maribor "there is often more talk about a crisis than there is substance to it".

Nevertheless, Germany's economy has seen signs of lower growth for some time, but it was clear the high growth rates from recent years would slow down sooner of later, she said.

"This is already happening and there are several reasons for it," Rantzen said, pointing to the US-China trade war and the unfinished story around Brexit.

In Germany, car manufacturers are having the hardest time, which is also a result of efforts to adapt to new environmental standards, which require more investment.

The construction and services industries are still doing relatively well, which could however not be said for retail, Rantzen said.

"The current calculations show a 1% drop in economic growth, and for the time being the drop seems to be modest, yet it will probably not be short-lived.

"Still, it will not be as severe as a decade ago. Companies are now better prepared for it," said the official.

She believes a bigger problem for the German economy is a shortage of trained staff, which is also a problem in Slovenia.

Rantzen noted the Slovenian economy could feel the drop in growth in Germany, especially car industry suppliers, some of which have already said they have fewer orders.

"Both German and Slovenian firms learnt a lesson in those times, and now bet not only on short-term profits but are more cautious, also thinking about less ideal times."

She considers the Slovenian economy an important partner of Germany's, proof of which is a rise in trade in goods from the initial EUR 4 billion to some EUR 12 billion, double that with much bigger Greece.

But there is more potential for cooperation to be tapped into; given the population ageing, innovative healthcare and wellness solutions could prove a niche.

There is also great potential in energy, and some also in the food industry, which is however harder to enter.

"In Slovenia there are many small but very innovative companies which can definitely be interesting to German companies, it's just that a way to them should be found.

"Their advantage compared to other East European companies is their ability to manufacture a product as well as German companies yet still at a much lower price."

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