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Janez Drnovsek

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% of GDP 


In 1918 the Slovenes joined the Serbs and Croats in forming a new nation, renamed Yugoslavia in 1929. After World War II, Slovenia became a republic of the renewed Yugoslavia, which though communist, distanced itself from Moscow's rule. Dissatisfied with the exercise of power of the majority Serbs, the Slovenes succeeded in establishing their independence in 1991. Historical ties to Western Europe, a strong economy, and a stable democracy make Slovenia a leading candidate for future membership in the EU and NATO. 

Update No: 075 - (28/07/03)

Slovenia to modernise its armed forces
Slovenia was quick to support the US over Iraq and expects to join NATO next year, as it is billed to do the EU. It realised the need for an updating of its armed forces.
It has long had conscription, inherited from the communist epoch. But it has scarcely needed a large military. Located largely in the Alps and its foothills, Slovenia is not much exposed to military assaults. When it declared itself independent in 1991, it had a short successful war with Belgrade in which it lost 79 soldiers. This was nothing like the violence that beset the secession of Croatia, and then Bosnia-Herzegovina from the Yugoslav Federation.
Within NATO, Slovenia will need a smaller, stream-lined force ready for peace-making and above all peace-keeping operations.
The armed forces of Slovenia are already going through major changes. This is obvious from a cutback in the number of personnel structures, while forces are becoming more professional.
Simultaneously, the mandatory conscription system is being taken out and contractual reserve forces are being set up. The conversion of the armed forces is a remarkably challenging and complex process aimed at creating modern and rationally equipped armed forces. The number of personnel is going to be cut back to something over 26,000 wartime manning. Of those 26,000, some 8,000 will be professional soldiers.
There will also be a reduction in the number of formations, with the end proposed to be two brigades and an air defence system with brigade-level command. At the same time, the now 6,000 man professional force has increased. Just in the past year 1,000 fresh soldiers were employed. The reserve forces have also been altered with a view to making a smaller contractual structure that will be better equipped in training and further involved in international peace-keeping operations. The Slovenian Armed Forces is made up of reaction forces, main forces and auxiliary forces. 

Slovenia ready for NATO 
Dimitrij Rupel, foreign minister of Slovenia, attended the first meeting of NATO members (19), including seven future members of the Western military alliance. Rupel said at the meeting that Slovenia, being very familiar with the situation in southeast Europe, is ready to take part in NATO tasks.
Eleven Slovenian soldiers are leaving for the ISAF-4 peace mission in Afghanistan, while Slovenia is to take part in the humanitarian field within the Human Security Network in Iraq. 

Slovenia looks north
The Slovenes are not really particularly Balkan in their geography or history. Todays state is made up of former Austro-Hungarian duchies and other territories with strong Roman Catholic tradition and never conquered by the Ottoman Turks. Also bordering Italy and as the northernmost former Yugoslav republic, they were always apart, a sort of mini-Switzerland in the communist world.
That is of course a contradiction in terms. There is no way one can be both capitalist banker and communist businessman, at least without torment of the soul. That was for long the Slovenes' predicament.
Their economy always worked better than those of their communist neighbours; but never as well as their capitalist ones. A rich relation of the East, but a poor relation of the West.
Now they look definitively Westwards, which in their geographical situation means northwards. They will be joining the EU on May 1st 2004 and are the best equipped of the entrant states to do well. 

Slovenia also looks south
The Slovenes know, nevertheless, that the greatest asset they have to offer the EU is their unrivalled experience and expertise in the Balkans. They are the natural gateway to the region, the one already 'Westernised' country where one can operate in familiar ways, while penetrating true terra incognita.
The Slovenes are, consequently, fervently hoping that EU expansion does not stop short at their own border with Croatia. Croatia and all the former Yugoslav republics deserve inclusion into the EU, with Slovenia holding the door open.
President Janez Drnovsek is the key player here. For over a decade the premier of the country, he is now happy to be an elder statesman, thinking of the long-term destiny of his people. He invited his counterpart in Croatia, Stipe Mesic, to Ljubljana in early May to mull things over. The timing is not quite right. The EU is absorbing 10 new entrants in 2004. It is in the doldrums economically and will need several more years to take on the idea of incorporating the whole Balkans. But when it does Slovenia will be the key. 

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Slovene-EU accord on liberalization of trade with farm products takes effect

A protocol on additional liberalization of trade with agricultural products between Slovenia and the EU took effect on 1st July. 
Erika Stular reported for Radio Slovenia: From now onwards, Slovenia will be able to sell to the EU 90 per cent of its exports without any duty or other contributions. The same conditions will also apply to 75 per cent of Slovenia's imports from the EU. Slovenia has agreed to a high level of liberalization for the majority of grains. It approved quotas for the EU of approximately 20,000 tonnes of wheat, 20,000 tonnes of corn and 30,000 tonnes of barley. On the other hand, Slovenia has received much larger quotas for exports to the EU for poultry and meat products and vegetables, and for the first time, quotas for bacon and honey have been introduced.
According to the Slovene side, the agreed quotas are favourable. On the basis of conclusions of the Association Council, also full liberalization of trade with processed products will came into effect on 1st July - this means without any duty or quota restrictions. In this way, trade in beer, alcohol beverage, chocolate, confectionery products and egg pasta will be fully liberalized for both sides. This trade will be carried out under exactly the same conditions as when Slovenia becomes a member of the common internal market.

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Mainly Slovene-owned bank buys majority of shares in Serbian bank

As of 4th July, the Frankfurt-based LHB bank, whose majority owner is Nova Ljubljanska Banka, owns the majority of shares in [Prva] Preduzetnicka Banka based in Belgrade, Radio Slovenia has reported.
The LHB bank based in Frankfurt owns 51 per cent of Prva Preduzetnicka Banka Belgrade. 

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Country's biggest investment set into motion

A company operating several Slovenian power plants, which is also a licence holder for the construction of a chain of five hydroelectric power plants on the lower Sava River, signed a contract for the construction of a dam for the first power plant which is to be erected at Bostanj, some 60km east of Ljubljan, Slovenia News has reported. 
The works are to kick off in July and finish by April 2006. The contract was signed by Holding Slovenske elektrarne (HSE) and two construction companies, GIZ Gradis Ljubljana and NGR Maribor. 
The deal granting HSE a licence to construct five hydroelectric power plans on the Sava was signed with the government in July 2002. The chain of five power plants on the longest Slovenian river is believed to be the biggest ever investment in Slovenia, estimated at 406m Euro.

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Slovene firm becomes largest telecommunication equipment supplier in Ukraine

The Kranj-based telecommunications equipment manufacturer Iskratel, in co-operation with its Ukrainian subsidiary Monis, signed a US$15.5m deal for the supply of the telecommunication system SI2000 with the second largest Ukrainian telecommunications operator, Utel, on 29th June, Iskratel said, STA News Agency has reported.
By signing the deal, Iskratel has already exceeded US$30m worth of business concluded in the Ukraine this year and has become the largest supplier of telecommunications equipment in this Eastern European country.
Ukraine and Russia are in fact the company's most important markets, as telecommunication markets there are still fairly unsaturated and offer great opportunities for growth in the future.
In April, Iskratel had already noticeably strengthened its market position in Ukraine as it signed a deal with Ukrtelekom, Ukraine's largest telecommunications operator, worth US$18.5m. Iskratel is to supply a part of the equipment for Ukrtelekom, while the rest (along with other services) will be provided by the subsidiary Monis from Kharkiv.
The project has also been supported by the Slovene Investment Company and the largest Slovene bank, Nova Ljubljanska banka (NLB), which has granted loans to the Ukrainian companies worth 80 per cent of the value of the deal.
NLB has recently signed a deal with the Kiev-based Utel, granting it a loan of US$9.1m for the purchase of the Iskratel telecommunication equipment, while Ukrtelekom (which is a 100 per cent owner of Utel) received a loan of US$10.5m, according to NLB.

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Slovenia offers 10m Euro aid to troubled clothing maker

The troubled clothing manufacturer, Mura, received a visit from Slovenian Prime Minister, Anton Rop, recently, Slovenia News has reported. The clothing manufacturer has received 10m Euro in aid from the government. The approved funds indicate a huge opportunity for Mura to guide the company towards a successful future.
One of the most crucial points is that most of the employees will not lose their jobs, Rop was quoted as saying. "The government will be overseeing the project with the active involvement of the ministries of economy and labour, and we will do everything we can for the project to succeed," said Rop, who travelled with Economics Minister, Tea Petrin, Minister for Regional Development, Zdenka Kova, and Minster of Labour, Family and Social Affairs, Vlado Dimovski.
The cabinet additionally decided to assign extra regional development funds to Pomurje, which is the least developed region in Slovenia, as well as areas along the border with Croatia, which will turn into the EU's outside border following Slovenia's entry into the EU. The Public Fund for Regional Development will provide the funding.
Pomurje will receive 430,00 Euro for the creation of a new business zone in Lendava, and approximately 300,000 Euro for a zone similar in Murska Sobota. 

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