Books on Slovenia
% of GDP
Update No: 106 - (23/03/06)
Slovenia, the Balkans forerunner
Slovenia joined the EU in 2004 with 10 mainly central European countries.
Following highly successful economic reforms, Slovenia appears to be the only
one of the 10 new members to be on track to join the euro single currency next
If Slovenia is the most advanced of the former communist states in the Balkans
by far, Germany is the key state in the EU, its largest and its paymaster. The
visit of new German Chancellor Angela Merkel to Ljublana is, therefore, no small
EU membership not 'next question' for Balkans, says Merkel
Merkel went to Slovenia on the Ides of March and announced in the fellow EU
country's capital a new geopolitical credo for the region. She said on March
15th that European Union membership was "not the next question" for
countries in the Western Balkans given the region's more fundamental problems.
Speaking at a news briefing with Slovene Prime Minister, Janez Jansa, Chancellor
Merkel said the current EU role in the Western Balkans was far deeper than mere
talks aimed at membership.
Financial aid, EU troops serving in the region, and economic development
programmes went "above and beyond classical membership negotiations"
conducted by the bloc, she said.
"Therefore, the question of full membership is not the next question. It is
rather about political stabilisation," said Merkel apparently referring to
Serbia and Montenegro, Bosnia-Herzegovina, Albania as well as Kosovo which has
been under UN administration since 1999.
Merkel noted that political stabilisation did not mean there could never be full
EU membership for these countries. But she stressed "the path in this
direction is totally different and depends on different steps."
The German leader said that with the exception of Croatia, which began EU
negotiations last year, this applied to the entire region.
EU foreign ministers, who met in Salzburg, Austria, were careful not to set any
deadline for Western Balkans countries to join the EU and added a new hurdle by
saying the "absorption capacity" of the present member states had to
be taken into account.
Both Merkel and Jansa said they did not believe that problems in the Western
Balkans could be resolved without the prospect of closer ties to the EU as a
Jansa termed the EU role in bringing peace to the region as
"essential," adding: "These countries are naturally European ...
and I believe they will fulfil the criteria for (EU) membership."
Barroso Sees Slovenia as Mediator in EU-Balkans Relations
Slovenia had already been singled out earlier in March as the key Balkan
interlocutor for Brussels by another major figure on the European stage.
"As we share our experiences about what happens in other parts of Europe
and the world, we turn to those who know a certain area. It is clear that
Slovenia knows this region best," President of the European Commission,
Jose Manuel Barroso, said on 2nd March.
Speaking to the press after meeting PM Janez Jansa during his first visit to
Slovenia, Barroso explained that Slovenia is expected to give its input to the
EU's "collective thinking" in shaping a policy on the Western Balkans.
He, moreover, stressed that the European prospects for the countries in this
region are especially important in respect to peace and stability. However,
these countries will become EU members only after they meet all economic and
political criteria, Barroso continued.
Barroso used the opportunity to praise Slovenia, saying that the country is
"a good example of success" among EU members. It will be the first
among the EU newcomers to adopt the euro, join the Schengen area and also
preside the EU, he added.
Meanwhile, PM Jansa told the press that European neighbourhood policy and in
particular the Western Balkans will be a priority of Slovenia's EU presidency in
the first half of 2008. He expects the discussion on the EU constitution to get
underway at that time. Moreover, the bloc will also have to focus on energy
policy during this period, Jansa added.
As he briefed Barroso on the country's preparations for the euro changeover,
Jansa said he does not expect any obstacles preventing Slovenia's euro adoption
on 1 January 2007. Addressing the implementation of the Lisbon Strategy, the
prime minister assured Barroso that Slovenia is "determined to meet its
part of the deal."
In the two years of its EU membership, Slovenia succeeded in efficiently drawing
EU funds, Jansa feels. However, he pointed to the need to reach an agreement on
the EU 2007-2013 spending plan by the end of April in order for EU members to
prepare for the allocated funds.
D&B Keeps Slovenia in the Top Spot in the Region
Slovenia remains firmly in the top spot in Eastern Europe alongside Slovakia,
according to the March report of the international rating firm
Dun&Bradstreet (D&B). Both have a DB2c rating, whereby Slovenia's trend
is still pointing upwards, Slovenia News reported.
D&B pointed out that Slovenia fulfils all the criteria for eurozone entry
planned for 1st January 2007, pending the convergence report which is to be
issued by the European Commission and the European Central Bank in October.
This means that Slovenia will be the first among the ten EU newcomers to join
the eurozone. The remaining two euro candidates, Lithuania and Estonia, have not
yet fulfilled all the criteria, D&B analysts say.
Data from the National Statistical Office showed that Slovenia's merchandise
export earnings rose 12% to SIT 3.4trn (EUR 14.19bn), while imports were 11.0%
higher over the same period at SIT 3.7trn (EUR 15.44bn). The merchandise trade
deficit therefore stood at SIT 0.3trn (EUR 1.25bn).
Slovenia's Central Bank has taken advantage of favourable inflation data in
January to cuts rates on key instruments by 25 basis points on 10 February,
D&B writes in its report. Despite the cut, the tolar has maintained a rate
of SIT 239.64 per euro.
The majority of Slovenians also remain in favour of the switch to the euro, with
58% looking forward to the changeover. The average support in the 10 new EU
states meanwhile stood at a much lower 38%.
EIB lends 43m Euro for rational use of energy
The European Investment Bank (EIB) said recently it has lent 43m Euro for the
construction and operation of the first pumped-storage power plant in Slovenia.
The project will decrease Slovenia's dependence on fossil fuels and help the
country to meet its commitments with respect to greenhouse gas emission
reductions, the financial institution said in a statement, New Europe reported.
The new hydropower pumped-storage power plant, Avce, with an output of 178MW
will be located on the Soca River in the Julian Alps close to Nova Gorica. The
plant will operate complementary to the existing hydropower plants on the Soca
River. It will supply electricity when there are high demands and use cheaper
energy in low consumption periods for pumping water into the plant's headwater
basin. The project will be promoted by the Holding Slovenske Elektrarne Group,
(Slovenian Electrical power Utility Company), that produces nearly 60 per cent
of the total electricity production in Slovenia and its subsidiary, Soxke
Elektrarne Nova Gorcia. The loan represents the first EIB financing in the
energy sector of Slovenia.
Lasko profits up, sales down
Slovenian brewer, Pivovarna Lasko, posted a slight rise in net profit for its
parent company last year, just-drinks reported recently.
The Slovenian brewer said that net profit at its parent company increased in
2005 by 7.1 per cent year-on-year, reaching 1.32 billion tolar (US$6.6 million),
while sales dipped slightly to 18.33 billion tolar from 18.54 billion tolar in
2004. Sales for the year were hit by the long and cold winter and a
disappointing summer, the company said. Exports plunged by 20 per cent for the
brewer, as sales in Serbia-Montenegro and Bosnia-Herzegovina fell. Lasko is the
largest brewery in Slovenia.
Slovenia remains at the top in the region
The February report of the international rating firm Dun&Bradstreet
(D&B) keeps the country firmly at the top in Eastern Europe alongside
Slovakia, Slovene Press Agency STA reported recently.
Both have a DB2c rating, whereby Slovenia's trend is still pointing upwards.
According to the report, Slovenia has improved the index of economic freedom,
which places it ahead of major EU countries such as France and Italy, as well as
fellow EU newcomers such as Poland, Hungary and Latvia. Reflecting on Slovenia's
preparations for the Euro changeover on 1 January 2007, the analysts have
established that a stable economy is the key to meeting the Euro adoption
criteria. They believe Slovenia should not have any problems entering the
Eurozone. The country met the inflation criteria for the first time in December
2005. Increased competition on domestic markets since EU accession will continue
to limit the pass-through of producer price growth in consumer prices, helping
to bring average inflation down to around 2.0 per cent by 2007.
Slovenia Ahead of EU Average in Mobile Phone Use
Slovenia is ahead of the EU average in terms of the number of mobile phones
users, the latest statistics from Eurostat show. According to data from 2004,
93.7 out of 100 Slovenians used a mobile phone, which was above the 89.6 per 100
average in the EU.
Moreover, Slovenia even outstrips the EU-15, where on average 92.5 out of 100
people used a mobile phone in 2004.
According to Eurostat, 1,849,000 Slovenians were users of mobile phone services
in 2004, which is 4,500% more than in 1996.
Leading the EU in terms of mobile phone users is Luxembourg, where there are 143
users per 100 people, meaning that some people have two subscriptions.
Meanwhile, Portugal was at the bottom of the list, with 60.5 mobile phone users
per 100 people.
However, in fixed line telephony, Slovenia trails the EU average of 49.6 lines
per 100 people, as it has 43 lines per 100 people.
Meanwhile, 47% of Slovenian households had an Internet connection in 2004, which
is 4 percentage points above the EU average.
Ministers agree to speed up works on 5th Pan-European Corridor
Transport ministers from Croatia, Hungary, Italy and Slovenia signed a joint
statement on speeding up future activities on the 5th trans-European transport
network, Slovenia News reported recently.
The Transport ministers, including Slovenia's Janez Bozic, moreover agreed to
cooperate in a bid to carry out research and analysis on the 5th corridor, and
give priority to the trans European transport network (TEN-T).
They also agreed to promote inter-operational satellite and radio navigation
systems, and coordinate supervision of safety in road, railroad, air and sea
traffic in line with international agreements.
Meanwhile, the Slovenian and Italian transport ministers, Janez Bozic and Pietro
Lunardi, signed a declaration of intent on building railroad sections Trieste-Divaca
and Divaca-Koper, and for receiving funds for this project from the EU.
In line with the document, an intergovernmental commission is to be established
to plan activities on these sections, Bozic told the press after the meeting.
According to the Slovenian minister, a bill on guarantees for taking loans for
modernising railroad infrastructure is already being prepared.
The funds allocated for Slovenia in the EU 2007-2013 spending plan will have to
be distributed, he added, promising that more funds will go for transport
infrastructure than in the past.
The Italian-Slovenian document envisages that the works on the Trieste-Divaca-Koper
cross-border railroad section are to begin next year and should be concluded by
2015, Lunardi explained.
The European coordinator for the 5th pan-European route, Loyola de Palacio,
reminded the ministers of the importance of the corridor, which needs an
integrated and coordinated policy, otherwise the EU will no longer be
competitive compared to the US, Japan and China.
She moreover stressed four priority tasks: building a modern and competitive
railroad transport axis, funding ports to make them competitive, developing
transport systems to face future challenges, and strengthening cooperation
between the countries.