US embassy cable - 04LJUBLJANA349

UNCLAS  LJUBLJANA 000349 
 
SIPDIS 
 
 
DEPT FOR EUR/NCE, EUR/SCE, EUR/ERA, EB 
USDOC FOR 4232/MAC/EUR/EERIS/CEEBIC/BURGESS/ROGERS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, EAGR, PGOV, PINR, SI 
SUBJECT: SLOVENIA: CABINET RESHUFFLE LEADS TO NEW 
MINISTERS OF ECONOMY, EUROPEAN AFFAIRS, JUSTICE, 
AGRICULTURE, AND TRANSPORTATION 
 
REF:  A) LJUBLJANA 292 
      B) LJUBLJANA 333 AND PREVIOUS 
 
Sensitive but Unclassified.  Please protect 
accordingly. 
 
1.  (SBU) SUMMARY:  On 20 April, five new ministers 
were sworn in as "caretakers" for the remainder of the 
year.  The new ministers include three professors: 
Matek Lahovnik, Minister of Economy, Marko Pavliha, 
Minister of Transport, and Milan Pogancnik, Minister of 
Agriculture, and two technocrats, Milan Cvikl, a bank 
executive and Zdenka Cerar, General State Prosecutor, 
as Minister for European Affairs and Justice, 
respectively. [NOTE:  Biographic information provided 
starting on paragraph 5.  END NOTE].  We do not 
anticipate any substantive policy changes as the major 
political parties prepare for parliamentary elections 
to take place in the fall.  The government will focus 
its efforts on a smooth transition into the EU. 
However, intra-party quarrels such as FoMin Rupel's 
criticism of Cerar to lead the Justice Ministry preview 
an electoral campaign where party leadership will be 
challenged -- ushering in a new cadre of leaders.  END 
SUMMARY. 
 
2. (U) It was not until the early hours of 20 April, 
that the National Assembly approved the five 
nominations (presented as a package) with 51 
parliamentarians voting in favor, and 25 against. The 
approval was never in question, as the ruling coalition 
had secured enough votes.  The anticipated cabinet 
changes to replace departing Ministers for European 
Affairs, Janez Potocnik (Slovenia's EU Commissioner 
designate) and of the Economy, Tea Petrin (slated to 
become Slovenia's Ambassador to the Netherlands) turned 
into a full cabinet reshuffle as Slovenian People's 
Party (SLS) ministers stepped down after the ruling 
coalition decided to expel it from the decision making 
process.  The power play was prompted by SLS support, 
albeit tepid, of the opposition's attempt to remove 
both the Ministers of Health and Interior (ref A). 
 
3. (U) The reshuffling, however, took an interesting 
turn when FoMin Rupel sent a letter to Parliament 
criticizing the Government's decision to appoint Zdenka 
Cerar as Minister of Justice.  In the letter, Rupel 
claimed that Cerar's appointment was a defeat to 
"European principles of justice."  [NOTE: Some in the 
media speculate that Cerar's decision to investigate 
and to press charges against Rupel over the opening of 
a Diplomatic Academy prompted the FoMin's comments (ref 
B), where other sources observe that he is positioning 
himself as someone who could also work under a new 
opposition-led government, particularly now as some 
polls indicate the Social Democrat Party (SDS) leading 
the ruling LDS Party. END NOTE].  With the exception of 
Mr. Lahovnik, whose credentials have been challenged by 
some business executives and criticized by the media 
over comments he made during the nomination process, 
the other nominees have received positive assessments. 
The new ministers assumed their duties immediately. 
Senior ministry officials (State Secretaries) will 
submit their resignations, though no major changes are 
anticipated. 
 
4.  (SBU) COMMENT:  With elections coming in less than 
six months, the new ministers will be asked to "hold 
down the fort" until a new government is convened later 
this year.  The current interplay among the various 
party factions will determine the type of government, 
and the possible alliances that will be required to 
establish a coalition strong enough to survive.  The 
inner LDS struggles -- highlighted by Rupel's comments 
against Cerar's appointment -- have sent a strong 
signal that the elections are wide-open this year.  The 
intra-party squabbles are not limited to LDS, however. 
The opposition parties are also trying to define their 
own platforms, thus confounding their own aspirations. 
END COMMENT. 
 
5.  (SBU) START BIOGRAPHIC NOTES ON NEW MINISTERS: 
 
MILAN M. CVIKL, Minister of European Affairs 
 
Milan Cvikl was born on 20 March 1959, in the 
 
coalmining town of Velenje (north-central Slovenia). 
He received a Bachelors degree in Economics from the 
University of Ljubjana in 1983.  Six years later he 
earned a Master's degree in Economic Analysis and 
Planning.  He studied in Canada and the U.S. for a few 
months in 1983.  Cvikl was the recipient of a 
government sponsored academic scholarship for "talented 
students."  [NOTE: Active work in the Socialist Youth 
Organization was a precondition to receive this 
scholarship]. 
 
Cvikl joined the Bank of Slovenia immediately after 
completing his Bachelors degree.  Known for his hard 
work and assertiveness, he soon became deputy director 
of the Central Bank's Analysis and Research Center.  In 
1990, he joined a group of experts drafting monetary 
legislation as Slovenia was seeking independence. 
 
In 1990, Slovenia's first Prime Minister Lojze Peterle 
offered him the Finance portfolio.  He rejected the 
offer because he did not feel the position was 
"politically safe."  In the 1990's, Cvikl worked for 
Slovenia's largest commercial bank, Nova Ljubljanska 
Banka (NLB), the World Bank, and the Ministry of 
Finance.  At the World Bank, Cvikl worked on several 
World Bank projects related to central and southeastern 
Europe.  Starting in 1998 through 2000, Cvikl served as 
a State Secretary for Budget and Public Finance at the 
Ministry of Finance.  He was one of principal drafters 
of the public procurement legislation. 
 
Cvikl returned to NLB in 2000 as Assistant Executive 
Director, heading the Financial Management and Support 
Department.  In 2001, he became NLB's Chief Financial 
Officer, but failed to join the board of directors in 
2002 when Belgium's KBC Group acquired 34% of NLB. 
Cvikl has often lectured at the Center of Excellence in 
Finance (CFC) in Ljubljana. 
 
Cvikl is fluent in English and Serbo-Croatian, and has 
a passive knowledge of German.  He is married and has 
two children. 
 
 
MATEJ LAHOVNIK, Minister of Economy 
 
Lahovnik is 32 years old.  He received a Bachelors 
degree in Economics from the University of Ljubljana in 
1994.  In 1998 he received his Master's degree in 
Business Finance.  Lahovnik completed his PhD in 
Business Administration, Management and Organization at 
the University of Ljubljana in 2000. 
 
Lahovnik has been employed at the Faculty of Economics 
of Ljubljana University since 1993.  He has been a 
visiting researcher at Indiana University's Kelley 
Business School, specializing in strategic management. 
Lahovnik currently chairs the Business Administration, 
Management and Organization Department at the Faculty 
of Economics. 
 
Lahovnik is young and has no prior business experience. 
Although Slovenian business executives have declined to 
make official comments about his nomination, some have 
informally expressed concerns over his ability (or lack 
thereof) to deal effectively with the country's 
economic realties.  Lahovnik wrote a study on 
management buy-out for BTC, a leading real estate 
company.  Over the past twelve months, BTC has been the 
focus of intense media scrutiny over its business 
ethics conduct.  Addressing his detractors, Lahovnik 
explained that he worked on only one phase of the 
business operation. 
 
Lahovnik was a minor owner of defunct and bankrupt SIB 
Bank.  He sold his bank's shares in 2001, two years 
prior to the outbreak of the SIB financial scandal.  He 
has been a frequent speaker at business events and 
contributor to the leading financial newspaper, 
Finance.  In his articles, he has supported the listing 
of state companies like Telekom Slovenia at the Stock 
Exchange; establishing the second financial pillar; 
developing comprehensive tax reform shifting the burden 
away from the middle class; and reducing labor costs. 
 
Lahovnik has indicated that as Minister, he would like 
 
to focus his efforts on two issues:  increasing FDI 
inflows, and enhancing companies' competitiveness 
abroad. 
 
Lahovnik is not married.  He is fluent in English and 
German. 
 
 
MARKO PAVLIHA, Minister of Transport 
 
Pavliha was born on 15 December 1962 in Ljubljana.  He 
received his Bachelors degree in Law in 1986 from the 
University of Ljubljana.  He obtained his Master's 
degree from University of Split, Croatia, and McGill 
University in Canada.  He completed his PhD on Implied 
Terms of Voyage Charters in 1991 at McGill University. 
He passed the Slovenian Bar Examination in 1993. 
 
Pavliha was a research assistant at McGill University 
from 1989 through 1992.  In 1993 he became an Assistant 
Professor of Transport and Insurance Law at the 
University of Ljubljana. In 1999 he was promoted to 
Associate Professor.  Since 1999, he has spent time as 
a visiting professor at the University of Split, 
Australia's Queensland University, Belgium's Catholic 
University, and at the International Maritime Institute 
in Malta.  In 2004, Pavliha was promoted to Senior 
Professor of Commercial, Transport and Insurance Law at 
the University of Ljubljana. 
 
In 2003, Pavliha was elected one of Ten Most 
Influential Slovenian Lawyers, for the second time.  He 
has received several awards at home and abroad.  He was 
actively involved in preparing significant Slovenian 
legislation dealing with infrastructure, natural 
disasters, civil aviation, nuclear damage, insurance, 
and maritime issues. 
 
Pavliha is married and has two children.  He is a 
permanent English and French court interpreter.  He is 
also fluent in Croatian and German, and has passive 
knowledge of Italian. 
 
 
MILAN POGACNIK, Minister of Agriculture 
 
Milan Pogacnik was born in 1946.  He received a 
Bachelors degree from the University of Ljubljana in 
1971.  He obtained his PhD in Pathologic Morphology at 
the University of Ljubljana. 
 
Pogacnik started his professional career at the Faculty 
of Veterinary at the University of Ljubljana as 
Assistant Professor.  He was promoted to university 
professor in 1985.  In 1989, he became a head of 
Institute of Pathology and Forensic Veterinary.  In 
1990 he became a Dean of Faculty of Veterinary at the 
University of Ljubljana. 
 
Pogacnik is a respected scientist, researcher and 
policy worker in the field of veterinary and 
agriculture in general.  His contribution in preparing 
Slovenian legislation on veterinary and cattle breeding 
before and after country's independence has been 
significant. 
 
After accession to the EU, he anticipates that the most 
protected agricultural sectors, such as diary 
producers, will face serious challenges.  He is aware 
of his limitations, "I cannot solve all problems in the 
remaining six months," but indicated that he will work 
diligently to identify existing and potential 
bottlenecks affecting Slovenian agriculture. 
 
Pogacnik received the National Order of Highest Rank in 
2000. 
 
He is married and has two children.  He is fluent in 
German and English. 
 
 
ZDENKA CERAR, Minister of Justice 
 
Cerar was born on 17 September 1941 in Ljubljana, where 
she completed her school studies.  After graduating 
from the Faculty of Law, she worked as a law clerk for 
 
Ljubljana District Court. She passed the state bar 
examination in February 1969. 
 
In October 1969 she was appointed deputy municipal 
public prosecutor in Ljubljana and has worked as a 
prosecutor since that time.  From 01 March 1969 to 30 
September 1969, she was employed in the legal affairs 
section of the Republic Secretariat for Finance, 
handling appeals. 
 
In 1974, she was appointed deputy district public 
prosecutor in Ljubljana.  Following the reorganization 
of the judiciary, she was appointed deputy public 
prosecutor in Ljubljana and head of the General Crime 
Division in January 1979.  She held this position until 
January 1981, when she was appointed deputy High 
Prosecutor.  After a second reorganization, she was 
appointed as High State Prosecutor (January 1995 to 
September 1995). Following a successful candidature 
under the new State Prosecutor Act, she became Supreme 
State Prosecutor on 20 September 1995. 
 
In 1999, the National Assembly appointed Cerar General 
State Prosecutor.  During her five-year period as a 
deputy municipal public prosecutor in Ljubljana, she 
was also head of the juvenile division and was actively 
involved in this field in other institutions. 
 
She is married and has three children.  She was a 
member of the national gymnastics team, and a coach and 
referee after she ended her career.  She was also one 
of the co-founders of the Lawyer sports club in which 
she has been active as an official and sportswoman for 
over 20 years. 
 
Cerar received the National Silver Star Order of Merit 
in 1984. 
 
END BIOGRAPHIC NOTES 
 
YOUNG 
 
 
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