Dragonja told Dnevnik's Saturday supplement Objektiv that cohesion funds are the most realistic development money available to Slovenia.

Other incentives, for instance for innovation, should mostly be repayable and accompanied by at least an equal contribution from the recipients and by transparency and effectiveness.

Dragonja said it was time to acknowledge that some companies will not survive and make sure that activity is expanded at those that are doing well.

He said Slovenia cannot afford a new investment cycle, one of the exceptions being the wood processing industry.

"We have invested a lot into state infrastructure. Companies also have capacities but they don't have enough competitive products. It is necessary to invest into technology and products and not into walls," the minister argues.

He announced two wood processing industry projects, while also proposing the search for niche areas. "We could develop a hybrid or exclusively electric engine in Slovenia that could be offered to the global auto industry," Dragonja said to demonstrate an example.

He wishes to see a to push forward in fields where Slovenia can be a leader, mentioning pharmacy and chemistry, organic food and bio technologies among other things, while noting that researchers also need some guidance in terms of how to sell products and knowledge.

Dragonja meanwhile indicated that the state has finally given up on former clothing giant Mura, while he will decide on stockings maker Polzela when he sees if state support for the company is sustainable.

He labelled the SPIRIT agency for the promotion of entrepreneurship, investment and tourism as more of a political than economic project.

Turning to the continuing credit crunch, he said that risk assesses is a key factor for banks, which need to be helped to make decisions easier.

This will be achieved by a guarantee schemes and a subordinated capital fund that would enter companies for a period of 5-10 years. While saying he would try to prevent the fund from becoming a separate institution, he wants to have a proposal for its formation drawn up in a month.

As regards the wider economic model, the minister said it was good that Slovenia was developing in the direction of a post-industrial country, but he added that things cannot work entirely without industry.

Europe will also need to reindustrialise if it wants to balance its unsustainable economic-social model, Dragonja noted.