Books on Slovenia
% of GDP
Update No: 108 - (30/05/06)
Slovenia the EU vanguard
Slovenia is the happiest of the former communist countries, if largely due to
One reason for its good fortune is that Tito, the former leader of Yugoslavia,
was half-Slovene. He allowed Slovenia a relatively free market economy, well
aware of its distinctively bourgeois and mercantile traditions, bordering as it
does on both Austria and Italy.
It is a beautiful country, high in the Alps, a Balkan Switzerland that cannot
fail to do well. It has by far the highest standard of living of the former
The cognoscenti in Brussels and elsewhere understand this very well. Slovenia
was admitted to the EU on time in 2004. It is absolutely onside to be admitted
to the euro-zone next year.
Still there are problems
Although Slovenia enjoys a GDP per capita substantially higher than that of the
other transitioning economies of Central Europe, nevertheless, it needs to speed
up the privatization process and the dismantling of restrictions on foreign
investment. About 40% of the economy remains in state hands, and the level of
foreign direct investment (FDI) inflows as a percent of GDP has been the lowest
in the region for some time.
This latter fact is not surprising. The Slovenians are extremely wary of being
taken over by Italian mafia groups who have been very active elsewhere in the
Balkans, notably in close-by Montenegro, now heading for independence from
Serbia, not exactly free from gangster influence either. They have a whole range
of complicated restrictions on FDI with this in mind.
The Slovenes are keen to be - and to be seen primarily as Europeans, not
Balkans, which geographically they are only marginally, indeed one might now say
Commission Gives Thumbs Up to Slovenia's Euro Bid
Hence the immense significance of belonging to the euro-zone. The European
Commission has said in its recent report that Slovenia is ready to adopt the
euro on 1 January 2007. The thumbs-up paves the way for Slovenia to become the
first among the countries that joined the EU in May 2004 to adopt the euro.
According to the Commission's convergence report for Slovenia, released in
Strasbourg on 16th May, the country is in compliance with all the membership
criteria, which is why it should be allowed to join the eurozone on 1 January
2007. The positive assessment was upheld by the European Central Bank in a
separate report on Slovenia's readiness for eurozone membership that it released
in Frankfurt on the same day.
The reports are the first in a series of steps leading to the confirmation of
Slovenia's bid to join the eurozone. EU leaders are now expected to vote on
admitting Slovenia to the eurozone at their summit on 15 and 16 June. Moreover,
EU finance ministers are expected to take a final vote on the legal basis for
Slovenia's membership on 11 July.
"Slovenia meets all the convergence criteria - a result of stable policies
and reforms," European Commissioner for Economic and Monetary Affairs
Joaquin Almunia said. "However, it is important to stress that Slovenia
will not have completed all the work by introducing the euro. The euro has its
benefits and responsibilities, foremost to retain stability of public
finance," Almunia added.
Moreover, the commissioner stressed that Slovenia must now speed up
"practical preparations to make the switch to the new currency
smooth." In his opinion, this includes measures to prevent unwarranted
In its report, the Commission concludes that Slovenia meets all Maastricht
criteria for eurozone membership: its inflation is 2.3% (0.3 pp below
requirements), while the general and total government deficits are well below
what is prescribed.
Despite the overall positive assessment, Slovenia has been urged by the
Commission to keep working on public finance sustainability. The pension system
is seen as the biggest problem in this respect.
The Commission also concluded that Slovenia has not faced any great instability
with its currency, the tolar, which has fluctuated only slightly around the
parity rate of SIT 239.64 for one euro. since Slovenia entered the ERM II
mechanism in June 2004. Moreover, it says that long-term interest-rates, which
stood at 3.8% in March, are well below the reference value of 5.9%, while it
also finds that Slovenia has adopted all relevant legislation for the euro.
Meanwhile, the Commission included a number of recommendations in the report.
Among others, it says that Slovenia should take steps to privatise its financial
sector and calls on Slovenia to keep implementing regulations of the common
Follow my neighbour
Slovenia needs good relations with its neighbours, as we all do. Slovenian
prime minister Janez Jansa said that he was sure Bulgaria and Romania would join
the EU on January 1 2007.
Jansa was on a visit to Bulgaria, invited by his Bulgarian counterpart Sergei
Stanishev. Jansa said that he believed that the European Commission would
recommend an on-time entry to Bulgaria to encourage reforms in the judicial
system and home affairs sector.
Bulgaria's efforts to fulfil EU membership criteria should be given proper
recognition, Jansa said. The prime minister added that Bulgaria and Slovenia had
similar positions on the developmental perspectives of countries from
South-Eastern Europe. These include Serbia's EU membership application and
Kosovo status negotiations. The two countries also share a common interest in
preserving security and stability in the Balkans.
Bulgaria would do their best to follow Slovenia's example and fulfil all
euro-zone requirements, Stanishev added. On September 29 2005 Slovenia ratified
Bulgaria's EU accession treaty.
The two prime ministers agreed that Bulgaria and Slovenia should co-operate not
only politically, but economically as well. Stanishev and Jansa discussed
possibilities for exploration of the South-East European market by organising an
international business forum with the two countries' participation.
They signed agreements for co-operation in the economy, education, science and
culture spheres for the period from 2006 to 2008.
The reasons for Slovenia to be reckoned with;-
Slovenia on CNN
From now on, an advertisement for Slovenia can be seen on CNN. The
advertisement with the slogan 'Slovenia: A Diversity to Discover' and wonderful
images of famous sights will be broadcast until the end of June and again, after
the summer break, in autumn.
The advertisement features distinguished names from the world of sport and
culture. At the beginning top climber Martina Cufar climbs the bell tower of a
church in Piran. The mountaineer Davo Karnicar, who achieved international fame
by skiing down the world's highest peaks, zigzags through vineyards. The
Lipizzaner horses, a breed created in Slovenia, will delight with their dressage
More information on how to get here, where to go and what to do in Slovenia, can
be found on the website www.slovenia.info, which is maintained by the Slovenian
Tourist Board. The Board believes that by advertising on CNN, Slovenia will gain
wider recognition and awareness among key target groups in Europe and Asia.
Whatever else, many people who perhaps have never heard of this small country,
will see for the first time just how attractive it is.
CPC hopes to enhance party ties with Slovenia
The Communist Party of China (CPC) is seeking to enhance ties with major parties
of Slovenia, a senior CPC official said recently, New Europe reported.
Wang Jiarui, head of the international department of the CPC Central Committee,
said in a meeting with a delegation from the Democratic Pensioners Party of
Slovenia, headed by its General Secretary, Pavel Brglez, the CPC wishes for
further exchanges and cooperation with major Slovenian parties.