Books on Slovenia
% of GDP
Update No: 111 - (25/08/06)
The odd-man out
Slovenia was the first state in the Yugoslav federation to win independence as
Yugoslavia slowly and violently unravelled in 1991. There were 79 deaths, as the
Yugoslav army tried to quell the movement to secession to no avail. This was of
course a far lower death count than was to occur in neighbouring Croatia or
Bosnia. Slovenia, with a largely homogeneous population that is 90% Slovene, was
able to avoid the devastating wars that accompanied the rest of the federation's
Slovenia always had certain advantages over other Balkan countries and other
Communist countries of Eastern Europe. Not least, it borders both Italy and
Austria, and it enjoys a very small coastline (about 10 miles) on the Adriatic,
which together gave it readier access to the West than most other nations of
It was perfectly logical that it should have been the first to go its own way.
It had always been the odd man out in Yugoslavia, tucked away in the far north
in the Alps and with a standard of living five times that of the poorest
republic, Macedonia, down in the far south.
Model European state
Now it belongs to an entirely different federation, the European Union,
which it joined two years ago. And it seems to be thriving, while other new
members worry about losing their identity and are prone to mean-spirited and
Slovenia is almost a model new member of the union. In January, it will become
the first of the 10 countries admitted in 2004 to join the European currency
union. It will take Europe's coveted presidency for a six-month term in 2008,
the first of the new members to do so. Its per capita gross domestic product has
grown to 81 per cent of the European average. Some 80 per cent of its small
population - just under two million people - are connected to the Internet.
"We were able to start with the transformation immediately, and now we see
the difference," Prime Minister Janez Jansa said in an interview in his
office in Ljubljana. He meant that once Slovenia became independent of
Yugoslavia in 1991, it began the transition to a market economy straightaway.
"In 1991, people left Slovenia because they thought that things would be
safer in Belgrade," Jansa continued. "Now they are coming back."
But how, he was asked, has Slovenia apparently avoided some of the sourness of
other countries like Poland, where a new rightist government has criticized its
predecessors for having been so eager to join the union that Poland's interests
were sacrificed in the process.
Issues like these are easily manipulated, Jansa said, but to succeed, they need
a political force pushing them. "In Slovenia there were no strong political
parties that opposed" membership, he said.
Domestic strife all the same
Not that politics in Slovenia is without its troubles. Jansa himself is not
universally popular. Taking over from a social-democratic government that was in
power for a decade, he has promised a faster pace of privatisation and a
reduction of the state.
But according to his critics, he has increased the power of the government by,
for instance, winning enactment of a media law that enabled him to place party
loyalists in key positions in the commission that controls the government-owned
radio and television stations. He has gained influence over the largest national
newspapers by changing officials in the funds that own them.
"They totally control the biggest newspaper, the biggest radio station, and
the biggest public television station," said Anton Rop, a former prime
minister and a continuing rival of Jansa, describing what he said were the
effects of the change in the media law. "They are talking about reforms,
but they are anti-reform," Rop said.
He complains that soon after taking power, Jansa increased pensions, a popular
move but one that, in Rop's view, threatens Slovenia's historically low budget
deficit, which is necessary for membership in the European currency union.
"They like to talk about history," Rop continued, "especially
about what they did in the war for independence, but in reforms they are unable
to do anything."
Jansa has been involved in a continuing skirmish with Mladina, the magazine
where he worked when he was a pro-independence Slovene dissident in the 1980's,
but which has criticized him ever since he took power at the end of 2004.
In a much noted comment recently, Jansa darkly suggested that "some
editors" of Mladina, as well as other journalists, welcomed the Yugoslav
Army's interference in Slovenia or criticized the Slovene government during the
struggle for independence.
"From time to time I have the impression that he's still angry because he
was in prison," said Ali Zerdin, the current deputy editor of Mladina, and
a colleague of Jansa at the magazine in the late 1980's.
A hopeful outlook
Still, compared with Poland and its tilt toward religious nationalism, or
with Slovakia, where the governing coalition includes a right-wing nationalist
party, or even compared with France or the Netherlands, where public fear of
competition from cheap eastern labour has produced a deep disillusionment with
the European Union, tiny Slovenia seems to be experiencing little of such a
"People here are satisfied with their economic circumstances," Rop
said, in a statement that few European politicians could reasonably make.
The sights around the country confirm this view, from the numerous open-air
cafes in Ljubljana, a small capital with a jewel-like old city, redolent of the
Austro-Hungarian past, to the country's Adriatic seaside, linked to the capital
by a world-class superhighway, and crowded with visitors from all over Europe.
To be sure, Slovenia has a certain modest scale. Ljubljana's airport is tiny. In
the whole country there is only one soccer stadium adequate for international
play. There is no convention centre worthy of the name, nor are there any
five-star hotels. The country, a NATO member, has steadfastly supported the
United States in its foreign policy (Jansa met President Bush in Washington
recently), but its entire contingent in Iraq consists of four police trainers.
But Slovenia seems largely optimistic. "This is the first time that we have
our destiny in our hands," Jansa said. "It's a historic achievement.
Never was the neighbourhood, the region, Europe so kind to small countries. We
are aware of that, and we want to use this opportunity."
S&P sees limited budgetary room for manoeuvre
Slovenia suffers from fiscal flexibility that is below average for Europe,
Standard & Poor's Ratings Services said recently, New Europe reported.
As the measurement of fiscal flexibility forms a crucial factor in the sovereign
ratings process, S&P's has sought to quantify in a consistent and comparable
way the varying degrees of flexibility enjoyed by investment-grade European
sovereigns. In this way, a revenue flexibility index (RFI) and an expenditure
flexibility index (EFI) have been developed and combined into a joint FFI. The
index allows for cross-country comparisons of governments' ability to adjust to
adverse economic trends and to react swiftly and effectively in the wake of
economic shocks, by modifying debt-service payments. "On the revenue side,
Slovenia ranked 17, while on the expenditure side, it ranked 21," Standard
& Poor's credit analyst Tim Reid said. "This shows that Slovenia has
below-average fiscal flexibility due to constraints on both the revenue side and
the expenditure side."
EU finance ministers approve Eurozone entry
The European Union Eurozone finance minister recently formally approved
Slovenia's entry into the 12-country Euro currency zone on January 1st 2007,
making it the 13th member, Deutsche Presse-Agentur (dpa) reported.
To mark the decision celebrations were being held in Brussels, European
Commission spokesman, Johannes Laitenberger, said.
The vents scheduled included a performance by Slovenian singer Neisha and the
display of a large welcome banner at the commission building. The audience was
to include Slovenian Finance Minister, Andrej Bajuk, Slovenian Central Bank
Governor, Mitja Gaspari, EU Fiannce Commissioer Joaquim Almunia, Eurogroup
President Jean-Claude Juncker, Finnish Finance Minister and EU President, Eero
Heinaluoma and European Central Bank board member Juergen Stark, the commission
said. The commission - acting as Eurozone watchdog - said earlier that the Euro
conversion rate for the Slovenian tolar should be set at 239,640 tolars for one
Euro as of January 1st 2007. EU leaders meeting in Brussels earlier in July
formally approved Slovenia's Eurozone membership. The country - which became a
member of the EU in 2004 as part of the bloc's "big bang" enlargement
- is the first Central and Eastern European state to join the Eurozone.
Most of the other countries wish to join the Euro area between 2008 and 2010.
The commission in June urged Slovenia to speed up practical preparations for the
introduction of the Euro and said public fears over price increases must be
addressed. National sides of the Slovenian Euro coins are expected to depict
national landmarks and heroes. The one-Euro coin, for example, features Primoz
Trubar, the author of the first printed book in Slovenian in the 16th century.
The Eurozone club already includes Austria, Belgium, Finland, France (except
Pacific territories using CFP franc), Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal and Spain. The EU's single currency zone came
into existence with the official launch of the Euro on January 1st 1999. Monaco,
San Marino and Vatican City also use the Euro, although they are not officially
Euro members nor members of the EU. Montenegro and Kosovo, which used to have
the German mark as their de facto currency, also adopted the Euro without
signing any legal arrangements with the EU. Kosovo uses the Euro instead of the
Serbian dinar, mainly for political reasons.
Industrial output down 1.2% in July
Slovenia's industrial output rose 4.3 per cent year-on-year in July, but was
down 1.2 per cent on the previous month, the National Statistical Office
On a yearly basis, the volume of industrial production increased, mainly in
mining at 9.4 per cent. It was up 4.4 per cent in manufacturing, yet dropped 0.5
per cent in electricity, gas and water supply. Industrial production increased
year-on-year in capital goods industries by 8.8 per cent and in intermediate
goods industries by six per cent, but dropped by 0.6 per cent in consumer goods
industries. In the first half of the year, industrial production rose 6.3 per
cent over the same period last year.
Telecom buys Kosovo's provider
Slovenian Telecom has acquired the majority stake in Kosovo's largest internet
provider Ipko Net, just two months after it became owner of Macedonia internet
provider On.net, Makfax reported recently.
The Slovenian company paid 19.5 million Euro for the take-over of a 75 per cent
stake of the leading provider in Kosovo. On.Net is Macedonia's second largest
internet provider, covering 40 per cent of the country's market.