The troops withdrew, Yugoslavia accepted the loss of the republic and, after an agreed three-month moratorium, the new state was recognized internationally. A new constitution was introduced in December 1991, and a year later Milan Kucan was elected president. Slovenia has started negotiations with the European Union with a view to gaining associate status. This dialogue had been vetoed by Italy because of a dispute, now resolved, over compensation for land near Trieste that Italy was forced to surrender in 1944. The early years of independence were difficult, with high inflation and a decline in the standard of living.
Recovery is now under way.
The tolar is stable and the economy is growing. The privatization programme, slow to get under way, is now gathering pace. The government is investing in infrastructure and, in particular, in road and rail links to its Adriatic port at Koper, in expectation of trade from there into central Europe. The tourist industry is also expanding, as Slovenia's ancient spa towns are refurbished. Privatization, a likely key to future prosperity, has so far proceeded rather slowly.