With Slovenia, he qualified for the 2000 UEFA European Championship after eliminating Ukraine in the qualifying play-offs, which was the country's first-ever appearance at the major tournament. At the tournament, Slovenia earned draws against FR Yugoslavia and Norway, and lost to Spain. Slovenia also managed to qualify for the 2002 FIFA World Cup, where they lost all three matches against Spain, South Africa and Paraguay. After the first game, Katanec had a huge argument with the team's star player Zlatko Zahovič, who was sent home. He resigned immediately after the World Cup. On 2 November 2002, he became the new manager of Olympiacos. Under Katanec's command, Olympiacos played worse than expected, and on 7 February 2003 the club terminated his contract with immediate effect due to poor performances and a bad atmosphere in the team.