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Tuesday, July 23, 2024

(Interview) Blaž Cvar: “The more members in the chamber, the stronger we will be in representing small businesses against the government”

ByLea Kalc Furlanič

 Blaž Cvar, after a year of leading the Chamber of Craft and Small Business of Slovenia, emphasises the crucial role of the chamber in representing the needs of small businesses in negotiations with trade unions and the government. Especially at this time, when the government is not conducting the most consistent social dialogue with them.

Therefore, Blaž Cvar calls on craftsmen and entrepreneurs to join the chamber in as large numbers as possible, even though membership is not mandatory: “The more of us there are, the stronger we will be in negotiations with the government.”

DEMOKRACIJA: It has been a year since you became the president of the Chamber of Craft and Small Business of Slovenia (OZS). How satisfied are you with the work done?

Cvar: The success of our work in the first year of this mandate is best judged by our members. We are committed to achieving results and representing our members who voluntarily join our organisation. At the beginning of our mandate, we had to deal with the so-called energy crisis, caused by various factors, including the war in Ukraine. This crisis has led to several problems that the economy had to face. Furthermore, during this year, we have mainly focused on the competitiveness of the economy and the acceptance of the current government’s reforms.

DEMOKRACIJA: So, others to judge, but can you say to yourself that you have made significant progress?

Cvar: I can assure you that I will always give my best to represent and justify the trust placed in me, and to achieve the objectives expected of the President of the Chamber of Craft and Small Business throughout my mandate. The best indication of this will be the preservation or even the increase in the number of members in the chamber, which we closely monitor. For now, we are prepared to face other challenges that lie ahead, including those that are more development-oriented for our self-organisation, not just for representing our members in negotiations with decision-makers.

“I CAN ASSURE YOU THAT I WILL ALWAYS GIVE MY BEST TO REPRESENT AND JUSTIFY THE TRUST PLACED IN ME, AND TO ACHIEVE THE OBJECTIVES EXPECTED OF THE PRESIDENT OF THE CHAMBER OF CRAFT AND SMALL BUSINESS.”

DEMOKRACIJA: OZS has about 20,000 members, and membership is voluntary. Is this not unique? In neighbouring countries, artisans, entrepreneurs, etc. are connected in a mandatory manner.

Cvar: That is true. We do point that out, as in Slovenia, in 2013, the Craft Act was changed, which required our chamber to abolish mandatory membership. In other countries, representing the economy through such organisations is mandatory, meaning that all economic entities – artisans, entrepreneurs, large companies – contribute to the functioning of these organisations. Consequently, representing the economy is easier and perhaps more meaningful and constructive for the chamber in those countries. In Slovenia, however, we are committed to supporting our work only by those who voluntarily pay membership fees. Therefore, the majority of the economy does not contribute anything to the representation of the chamber. One of our goals is to change this uniqueness into a form of representation fee, and let the state decide to support organisations that are striving for the good of the Slovenian economy. Yes, the state publishes tenders, but they are intended only for direct companies. However, we persistently seek ways to stay afloat.

DEMOKRACIJA: What were your expectations when you took over OZS, which issues have you been able to accomplish, and what lies ahead in the future?

Cvar: Our goals are to maintain membership, acquire new members, and especially open up to young or new businesses. We want to embrace development-oriented companies and further improve the reputation of our organisation, which already has solid foundations dating back more than 50 years. We are committed to appearing in the public eye in the most appropriate manner. In addition to our monthly magazine “Obrtnik”, we started publishing on a mobile website (application). Here, we provide daily updates on our activities, and artisans and entrepreneurs can access information related to legislation, consultations, and assistance. In March, we also launched a regular weekly programme called “Vizionar” on RTVS, where we showcase successful artisans and entrepreneurs and promote professions, especially those in high demand. We believe this is particularly important during the current labour shortage crisis. We have more ideas on how to approach young and new members.

 

DEMOKRACIJA: How are representatives of business associations (OZS, GZS, KGZS, Cooperative Union of Slovenia, Association of Employers of Slovenia, etc.) involved in negotiations with the government and trade unions regarding changes in legislation?

 

Cvar: Social dialogue is very important in every country. In Slovenia, this happens within the framework of the Economic and Social Council (ESS). Recently, employers have been quite critical of this social dialogue because it has been subject to violations. Both trade unions and employers have raised concerns about this. Important decisions, such as healthcare reform, long-term care, etc., are being made without the necessary thorough discussion, which is required to make these decisions correctly, responsibly, and in consensus with all social partners. These decisions are fast-tracked directly to the government and parliament. All of this is due to pressure from the obligations we have in the recovery plan, which is related to obtaining European funds, under the pretext that we need to change part of the legislation in a short period. The same goes for the Employment Relationships Act (ZDR). Otherwise, we will not be eligible for European funds, so now we are in a hurry. This causes significant headaches because we have to deal with all areas at once, and we no longer know when and how to respond. It is impossible to keep up and make responsible decisions. We are critical of this situation. We believe that everything needs to be stopped, put all the reforms on the table, assess their implications in terms of finances and administration, and consider them holistically, as some areas are closely interconnected.

“IT IS HAPPENING THAT IMPORTANT DECISIONS, SUCH AS HEALTHCARE REFORM, LONG-TERM CARE, AND OTHERS, ARE BEING MADE WITHOUT THE NECESSARY SPECIAL DISCUSSIONS THAT ARE NEEDED FOR THESE DECISIONS TO BE MADE CORRECTLY, RESPONSIBLY, AND IN CONCENSUS WITH ALL SOCIAL PARTNERS.”

DEMOKRACIJA: Have you presented or proposed this to them?

Cvar: Yes, but there is currently no willingness to consider a comprehensive approach. We negotiated the Employment Relationships Act for 10 months. We agreed to support the law only on the condition that we adopt only essential changes. These are the implementation of two European requirements – mandatory 48-hour rest and five additional days of leave for care. However, we received a bunch of demands that shook the negotiations. Both long-term care and pension reform can quickly burden the economy, so we need to be cautious. Suddenly, we can find ourselves in an unfavourable situation again. If Germany sneezes today, we might catch a cold in six months.

DEMOKRACIJA: How do you take action if the ESS regulations are violated?

Cvar: The state should respect the ESS operating regulations. If it does not, we will report to the European Commission (EC), which will have to take action. Whether there will be mediation or the employers’ side will withdraw from the ESS, I cannot comment at this moment because we will decide together. These are the options that await us. We probably will not stand by and allow this to happen.

DEMOKRACIJA: But this could take time?

Cvar: It is not necessary to wait long for action from the EC. The European Commissioner’s primary function is to ensure appropriate social dialogue in individual countries. The day before yesterday, I spoke with the EC Ambassador in Slovenia, and she was quite concerned about what I reported to her. If the government does not want to listen to our comments directly, then we will take action in that way.

DEMOKRACIJA: What did you highlight regarding the proposed Long-Term Care Act?

Cvar: In the section of the Long-Term Care Act that deals with financing long-term care, we cannot agree, as the law stipulates that the funding is shifted onto the shoulders of employers. Especially, we cannot agree because in our chamber, we mainly represent small entrepreneurs. This includes the self-employed, of which there are over 100,000 in Slovenia. Together with farmers, the number increases to almost 200,000 individuals who will have to contribute a whole two percent of their wages for Long-Term Care Act, which could amount to 1000 euros or more per year, depending on their income. This is a considerable amount of money. We argue that financing long-term care should be addressed through a separate law. Let the Long-Term Care Act be adopted without the provision on financing, and let’s resolve that issue through national consensus. We are aware that this area needs regulation; we will all need long-term care someday, but there are also other ways to address it. Long-term care is closely related to healthcare and healthcare reform. We believe that with the 4.5 billion euros or even more funds that we collect for healthcare in Slovenia, it is still possible to achieve some optimisation. So, we could obtain 280 or 300 million euros for Long-Term Care Act from the healthcare fund or from the funds currently collected for healthcare purposes. The burden on the healthcare fund is reduced with the introduction of Long-Term Care Act, which means that a significant portion of the required funds is already available. And if, as we predict, we are to reform Slovenia’s healthcare, optimise the basket of services, we might be able to find 7 or 8 percent for Long-Term Care Act.

“WE NEED TO ADVOCATE FOR AN ECONOMY THAT FILLS THE BUDGET AND HELPS CITIZENS. WE WANT TO ACHIEVE CONSENSUS THAT DOES NOT DESTROY THE ECONOMY. BUT THE STEPS MUST BE CAUTIOUS AND NOT HASTY.”

DEMOKRACIJA: Earlier, you mentioned the prolonged negotiations on the Employment Relationships Act (ZDR) …

Cvar: With the Employment Relationships Act (ZDR), due to the demands of the trade unions, eight tough nuts to crack “emerged” that would need to be addressed. However, the negotiations were suspended, and the law was sent for public consultation; it will soon be approved. Employers are extremely critical of the additional financial burdens that are again imposed on the higher cost of labour. According to the OECD, it is entirely clear that this is misguided and that it is advisable to reduce labour costs. This government promised that (I am referring to wages, net pay, and contributions), but it is working in the opposite direction of its promises, with every change it introduces. With each change, we gain one or two percent or more; in the case of the pension reform, it could even be 5 to 6 percent. With the ZDR, we were highly critical of the possibility of shortened working hours. If we did not have workforce issues in Slovenia, especially in certain professions, then it would not be such a serious problem. We all know where technological development is going; in the future, we will probably work less in highly developed societies but receive the same or even higher payment. However, at this moment, only some industries can afford that. It is not feasible for the public sector or most sectors where a physical presence at the workplace is necessary, such as in hair salons, catering establishments, etc. They suggested a voluntary decision for a 6-hour workday, but this means that this sector will become increasingly less competitive. Even the public sector is not keen on a shortened workweek; for example, healthcare and public administration cannot afford it.

DEMOKRACIJA: How did they even come up with such an idea? Following foreign examples?

Cvar: Every policy wants to be popular. We have no problem with that. We also want to cooperate with them. Let the policy work for the good of the citizens. However, we must advocate for an economy that fills the budget, which can realise such ideas for the citizens. Therefore, we want to achieve a consensus, a social agreement, that does not destroy one part of society, in this case, the economy. The steps must be cautious and not impulsive. This is an impulsive step because we have not done any analysis of what kind of society we are, or if we have a majority of industries that could afford a shortened workweek.

DEMOKRACIJA: Why do you advocate for the establishment of the waiting for work measure?

Cvar: This measure needs to be prepared in advance. At the moment, while we have work and orders, it may not be needed. However, we must be prepared for any crisis. Let’s remember the COVID-19 crisis. The government had to deal with making decisions from one day to the next. Fortunately, it managed to keep some industries in good condition even though they were closed for a long time. But under time pressure, decision-making becomes difficult and irresponsible, and mistakes can happen. That is why we say that we should learn from these experiences and prepare for the possibility that the recession spreading from Germany could reach us. Some industries, such as metal processing and woodworking, have already warned us about this vulnerability, as they are subcontractors for large companies in Germany and Italy. We were vulnerable during the economic crisis of 2008 and 2012. Currently, orders are gradually decreasing, but it could happen suddenly.

“OZS HAS ABOUT 20,000 MEMBERS, AND MEMBERSHIP IS VOLUNTARY. THIS IS UNIQUE SINCE NEIGHBOURING COUNTRIES MANDATE ASSOCIATIONS FOR CRAFTSMEN, ENTREPRENEURS, ETC. IN OZS WE ARE TRYING TO ATTRACT AS MANY MEMBERS AS POSSIBLE TO STRENGHTEN ECONOMIC ENTITIES IN NEGOTIATIONS WITH THE GOVERNMENT AND THE UNIONS.”

DEMOKRACIJA: Do you have hope that your dialogue with the government in the Economic and Social Council (ESS) will improve?

Cvar: By nature, I am an eternal optimist. I never lose hope. One of my good traits is perseverance. I have demonstrated this in the past when we received “no” as an answer multiple times. However, I firmly believed in the right direction and persisted until we eventually reached a solution, whether it was a compromise or not. So, this time as well, I will do everything, or we as an organisation will do everything, to achieve appropriate solutions to the best extent possible for our members and the economy.

DEMOKRACIJA: What are your plans regarding the scope of work in the Chamber of Craft and Small Business until the end of 2023 or the end of your term?

Cvar: As I mentioned before, we want to get much closer to the economy and convince entrepreneurs and craftsmen to join us in as large numbers as possible in a positive way. The more of us there are, the stronger we will be in persisting to achieve concrete social dialogue.

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