Opinion of the Economic and Social Committee on "Slovenia on the road to accession"
Date: 2002-07-18
Institutions: European Economic and Social Committee
Subjects: Slovenia, economic situation, political situation, social situation, transition economy

7.10.2002

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Official Journal of the European Communities

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Opinion of the Economic and Social Committee on ‘Slovenia on the road to accession’

(2002/C 241/33)

At its plenary session on 30 and 31 May 2001, the Economic and Social Committee, acting under
Rule 23(3) of the Rules of Procedure, decided to draw up an own-initiative opinion on ‘Slovenia on the
road to accession’.

The Section for External Relations, which was responsible for preparing the Committee’s work on the
subject, adopted its opinion on 27 June 2002. The rapporteur was Mr Confalonieri.

At its 392nd Plenary Session of 17 and 18 July 2002 (meeting of 18 July 2002), the Economic and Social
Committee adopted the following opinion with 100 votes in favour and two abstentions.

Introduction

This document is the result of:

— discussion of the working document presented at the first
study group meeting on 30 January 2002 in Brussels;

— discussion of the subsequent preliminary draft opinion,
presented at the second meeting of the study group on
27 February 2002 in Brussels;

EU policies to candidate and non-candidate Central and Eastern
European countries. This is particularly valuable for the
stabilisation and cohesion of the Balkan region, where Sloven-
ia, a member of the Stability Pact for South-East Europe, has
proved to be an important bridgehead to the north, with
Greece fulfilling the same role to the south.

— hearings with representatives of Slovenian institutions
and civil society organisations arranged by the study
group on 13 and 14 March 2002 in Ljubljana;

3. Trade with the EU

— the meeting of the Section for External Relations in

Brussels on 27 June 2002.

The background information and observations contained in
the appendix constitute an integral and essential part of this
document.

1. Progress towards accession

1.1.
Slovenia has shown utmost willingness and ability to
forge links with the European Union in all aspects: politics and
institutions, economy and society, culture and communi-
cations. This is confirmed by the fact that 90 % of the chapters
contained in the acquis communautaire have been transposed
and implemented, and also by the development of trade and
cooperation with the following countries in particular, in order
of importance: Germany, Italy, France and Austria.

2. Strategic importance for the Balkans

Slovenia — the only country of the former Yugoslavia
2.1.
on the road to accession to the European Union — has
embraced the opportunities and potential available through

The above observations are echoed in the figures for
3.1.
trade. The value of exports from Slovenia has progressively
increased and in 2000 approached 60 % of GDP. Imports,
however, still exceed exports by 16%. It is significant that early
signs of an improvement in the trade balance were due to a
net increase in trade with non-EU countries, especially with
countries in the Balkan region, primarily Croatia. However,
throughout the past years and for the foreseeable future the
European Union will remain the main trading partner of
Slovenia. In the year 2000, the EU accounted for 68% of
Slovenia’s imports and 64 % of its exports, hence the country’s
29 % deficit in trade with the EU.

3.2.
Thus Slovenia has asserted and is strengthening its
position in markets of considerable interest to the EU. This
should be taken into account in the accession treaty and, in
particular, in establishing the country’s financial contribution
to the Union, in relation to EU financial aid programmes to
Slovenia. This is one of the key issues currently in discussion,
although on the basis of official declarations made by the
European Commission, it is certain that, following accession,
the EU will grant Slovenia financial aid — especially through
the Structural Funds — which, together with aid from other
programmes, will match Slovenia’s financial contribution to
the EU. This is in line with the European Commission’s
proposal that no new Member State should become a net
contributor on accession.

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4. Relations between populations in the run-up to

accession

Geographically and demographically (larger only than
4.1.
Luxembourg, Malta and Estonia in terms of population) as
well as economically, Slovenia will count itself among the
smaller Member States, which already outnumber the main
founding members of the Union, themselves leading econom-
ies on the world stage. The balance between large and small
countries will shift even further towards the latter after
enlargement. This demands careful attention in the Convention
for the reform of the EU, in which all concerned populations
should now be involved. The public has already delivered
some warning signs in several Member States, including those
which have not joined the euro.

4.2.
It is therefore necessary to make full use of appropriate
tools and forms of communication, especially the mass media,
television and the press, which have recently been the subject
of widespread institutional reform in Slovenia. At the same
time it is essential to strengthen direct, specific exchanges
through cross-border partnerships between economic and
social organisations capable of playing a significant role in
preparing Slovenians for the referendum that they will be
called upon to participate in before an accession treaty can be
signed. Social and economic interest groups must be specifi-
cally consulted, not only the 60 % that are currently in favour
of membership (according to official figures), but especially
the remaining 40 %, which represent a significant share of the
Slovenian population. There should be sustained support for
the strategic role which economic and social organisations,
and non-governmental and religious organisations, can play in
boosting direct communication between populations, which
would itself deepen the Union’s supranational cohesion. In this
context, Slovenia should be welcomed into the EU as a new
resource for the development of the Union.

5. Historical and cultural identity and minorities in the

run-up to accession

and western-style market economy. On the other hand, it is
essential to transcend the static, dated and over-simplistic
concept of ethnic groups. The differences between ethnic
groups only truly become incompatible when, through lack of
resources and no common authority legitimised by shared
values, the pursuit of competitiveness dictated by the market
economy takes precedence over solidarity.

5.2.
Protecting linguistic diversity in a supranational union
must be an essential pillar of the Convention for the reform of
the EU to guarantee linguistic equality, particularly for
languages such as Slovenian (a southern Slav language that
uses the Latin alphabet), which on a European level are classed
as minority. In this context, linguistic minorities can be more
widely recognised on both sides of national borders, e.g.
Italians and Hungarians living in Slovenia, and Slovenians
living in Austria and in Italy. Cross-border cooperation must
take significant account of these minorities.

5.3.
It is precisely this cultural diversity, which transcends
national borders, that underlies supranational unity of Europe.

6. The transition process: stability and cohesion, critical

points and opportunities

6.1.
The relative demographic and cultural homogeneity of
the population in Slovenia, as well as its position as an
economic interface between the European Community and the
former Yugoslavia (see the 1980 trade and cooperation
agreement and the Alps-Adriatic Working Community found-
ed in 1978), have enabled Slovenia to enjoy a smooth
and relatively painless transitional period towards pluralist
democracy and a market economy in a way that no other
CEEC has. Since the Republic of Slovenia was founded in
1991, convergence policies focused on accession and received
EU support, even though the Association Agreement (Europe
Agreement) was not signed until 1996, having been stalled by
the matter of restitution of pre-wartime property, which has
still not been fully resolved. In the light of the Union’s Stability
and Growth Pact, it is significant that Slovenia is among the
countries with the smallest public deficit which, despite having
increased in 2000, stands at just 25,8 % of GDP, caused for
the first time by foreign rather than domestic debt.

Slovenia differs from other countries of the former
5.1.
Yugoslavia in that from the early Middle Ages it had uninter-
rupted links with the German-speaking part of the Holy Roman
and Austro-Hungarian empires, from which the Slovenian
population claimed autonomy due to their different linguistic
identity. Recent conflicts in the Balkans have however shown
the importance of historical and cultural links (religious more
so than linguistic) in the transition to a pluralist democracy

6.2.
Internal stability and cohesion have been and remain
the government’s prime concern, in line with the accession
criteria established at the Copenhagen European Council in
1993. This has been most evident in the gradual nature of the
reforms, which however has been identified as a critical point
in the transitional process, especially concerning privatisation,

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opening up to foreign investment and financing, property
rights for foreigners and restitution of property expropriated
after the war. The results achieved already should not be
underestimated: inflation and unemployment have been con-
tained (currently inflation is still higher in Slovenia than the
EU average but unemployment is significantly lower), social
security protection, defending Slovenian citizens’ rights in
forms of rampant
privatisation, and protection from all
capitalism and financial speculation. However, persisting
obstacles to foreign investment and financing should not be
ignored, since they delay the restructuring, innovation and
competitiveness of businesses, and subsequently of the entire
economy.

6.3.
A large number of medium-sized industrial and agricul-
tural businesses, although being public-owned, were under
self-management by a system of cooperatives, as an alternative
to Soviet statism. For the most part, privatisation for these
cooperatives has meant assigning them to their former mem-
bers, having broken them up into small-sized companies that
now find it difficult to reform as cooperatives or as more
modern forms of businesses, which they need to do in order
to consolidate their capital and assert their place in the market.

6.4.
The policy to safeguard employment levels in the early
stages of the transitional period led to a degree of inflexibility
of the labour market, which in turn curbed the process of
restructuring the industrial sector. Traditionally, Slovenians
have a relatively high level of secondary and university
education and vocational training thanks to the pre-existing
education and training system, which has adapted relatively
easily to the new challenges through extensive reform.

6.5.
Only recently have conditions prepared the ground for
an opening up of the labour market to EU citizens. The recent
law on employment relations ensures that the necessary
framework is in place for this. Mutual recognition of pro-
fessional qualifications has yet to be completed, as has the
right
to free establishment and practice of self-employed
activities.

the EU’s monetary system. The annual reports produced by the
government agency UMAR/IMAD (Institute of Macroeconomic
Analysis and Development) on the general development of
Slovenia devote significant attention to the effects of economic
and social change on living conditions and human relations.

The general background to the transition process,
6.7.
infrastructure, regional, social and
to economic, business,
environmental policy,
is set out in the appendix to this
opinion, with special emphasis on the implementation of
privatisation measures, free movement and the role of the
public administration, the chambers representing the various
sectors of the economy, the social partners and civil society
organisations.

7. The role of the social partners and strategies for

future development

7.1.
Slovenia ratified the revised European Social Charter in
June 2001. The social partners are constantly involved in the
legislative process by means of representation in the National
Council, set up under the constitution as a consultative body
of the parliament. The Chamber of Commerce has hitherto
also represented companies in dealings with the government
and in collective bargaining with trade unions. This has
hampered trade union and contractual autonomy. However,
tripartite negotiations on a governmental level still prevail over
bilateral bargaining at sectoral or company level.
In this
context, a social contract for the period 2001-2004 is being
established, setting out a package of standards applicable to
pay, workers’ rights, health and safety at work, social security
and employment.

7.2.
This contract is part of a series of strategic programmes
and plans adopted by the parliament and the government
setting out extensive guidelines for the future:

6.6.
It is now time to focus on the new opportunities
available, so as to offer reliable and effective guidance for the
EU’s financial, business and professional sectors. However,
steps must also be taken to anticipate and avert the potential
risks to employment, working conditions and social security
associated with the full transition to a market economy and

— The strategic objectives to develop the labour market up
to 2006, approved by the parliament, focus on increased
training, programmes to get the unemployed back to
work, reducing regional
imbalances and bringing the
level of unemployment below the 6 % mark. This action
plan follows the joint assessment of priority employment
policies, as agreed in 2000 between the European Com-
mission and the Slovenian government.

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— The Strategy for Economic Development 2000-2006 sees
human resources as the key for the development of
competitiveness. The government agency UMAR/IMAD
is responsible for implementing this programme, which
corresponds to the Commission’s economic convergence
programme. In tandem with its economic and labour
market strategies, the government has recently drawn up
an action plan on moving towards the Information
Society, creating an efficient financial system and econ-
omic conversion and infrastructure. A specific plan for
developing SMEs and entrepreneurship has been adopted
by the government in connection with the EC policy on
enterprise.

work programme, to the general satisfaction of both national
and international opinion. As in Germany, expansion of
nuclear energy production is forbidden, and there are pro-
visions to gradually phase this out in favour of developing
sources of renewable energy. The national environmental
action programme provides for the mainstreaming of environ-
mental protection in a variety of policy areas:
industry,
transport, energy, agriculture and tourism. The national trans-
port plan is a prime example of this since it gives priority to
developing the two rail links (the east-west and north-south
trans-European corridors), which cross in Slovenia and are
deemed as strategic transport routes for the Union.

— The national plan for 2000-2003 on scientific and
technological research for businesses, run by the Science
Academy and the National Council for Research and
Development, involves Slovenia’s two universities and a
number of applied research centres — some of them
private — and targets integrated forms of public financing
(already around the EU average) and private funding.
Slovenian research centres have worked with efficiency
in the EU’s Fifth framework programme for scientific
research and are represented in the Committee for
scientific and technical development (CREST). Both the
Commission and the Council are keen to see further
cooperation between Slovenian institutes and their EC
counterparts in the forthcoming Sixth framework pro-
gramme.

However, urgent action is needed to strengthen insti-
7.3.
tutional machinery at regional level and improve administrat-
ive capacity so as to ensure that the Social Fund, Structural
Funds and Cohesion Fund are used properly. In this area, some
chapters of the acquis communautaire relating to regional
policy and direct payments to agriculture have not been
achieved.

8. Environment, transport, tourism, social services and

consumer protection

8.1.
Achieving the level of productivity in Slovenia required
by the EU’s framework conditions for accession may initially
have taken precedence over environmental protection. How-
ever, these framework conditions also contain EU environmen-
tal measures which Slovenia has now adopted, reaching a
significant level of progress even compared to Member States.
Thanks in part to economic relations that the former Yugoslav-
ia had with France, the Krsko nuclear power station produces
20 % of the electricity used in both Slovenia and Croatia. The
power station continues to benefit
from advanced safety
applications developed and honed under the Euratom frame-

8.2.
This is furthermore in line with the Convention on the
Protection of the Alps, which Slovenia signed with Austria,
France, Germany, Italy, Switzerland and the Principalities of
Liechtenstein and Monaco, and which it chaired for a long
time. Despite the fact that the EC became a member of the
Convention in 1991 and that it affects at least a third of
Slovenia, including the Triglav national park (2 864 m) —
Triglav mountain peak forms the national emblem — there is
no reference to the Convention in the Commission reports. A
package of specific measures on tourism was also set up in the
framework of the above Convention. However, the Com-
mission’s analysis of tourism focuses solely on the economic
aspects and lacks a broader outlook on the environmental
impact, on the effects tourism has on the labour market and
on the potential for market distortion in areas bordering the
EU.

The most pressing need is for information and action
8.3.
concerning social services and the health system in particular,
which in the past excelled in certain forms of surgery, so much
so that it attracted doctors and patients from Italy and Austria.
However, nowadays this trend has been reversed, due to the
curb in public spending in this sector. Somewhat worrying,
therefore, is the fact that the Commission merely states that
‘Slovenia also still needs to start implementing the planned
heath reforms to alleviate the burdens on the budget and
the
ensure long-term sustainability’. By the same token,
Commission gave a positive assessment of the new law on old-
age and disability pensions simply because it had cut spending
by 0,7 % of GDP in 2000 (in practice the result of offering
early retirement as an alternative to redundancy during the
main phase of restructuring).

8.4.
The national consumer protection programme for
2001-2005 includes specific measures and direct action to be
carried out by specialised government bodies with the constant
high-level involvement of non-governmental consumer organ-
isations recognised and financially supported by the govern-
ment.

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9. Strategic role of public and private management

9.1.
The national programme for the adoption of the acquis
communautaire, based on the 1999 Partnership Agreement
and revised on 31 May 2001, provides a detailed time-schedule
for achieving the priority objectives. The Commission Report
of November 2001 and the subsequent Laeken European
Council emphasise the urgent need to enact
the acquis
coherently and efficiently, which Slovenia has almost fully
achieved. To this end, the Commission and the Council have
called for early reform of the public administration and civil
service, and adoption of the proposed law on public agencies.

9.2.
Developing and training public management is of
importance, and Slovenia has established a
fundamental
Secretary of State to fulfil this role within the government and
an administrative academy, which has adopted a detailed
training plan. In turn, the Commission has supported twinning
projects, many of which have already been successfully
concluded with many more in the pipeline. The aim of these
projects is to assist
in achieving the most pressing and
important chapters of the acquis communautaire. Planning
and carrying out
these projects is done in cooperation
between Slovenian experts and European partners who offer
considerable expertise in the relevant fields. In this domain,
the organisations representing the public service have a major
task ahead of them and must be ready and able to cooperate
at transnational and European level, also with a view to
harmonisation of EU public administrations.

9.3.
Strengthening and training private sector management
is equally necessary to develop existing businesses and create
new entrepreneurial initiatives able to efficiently and effectively
seize the opportunities and potential offered by a market
economy and by full accession to the European Union.
in
The respective trade unions and business associations,

Brussels, 18 July 2002.

cooperation with their cross-border and European counter-
parts, could play an essential role in achieving this.

The free professions and their professional bodies are
9.4.
this process. Some professions have
an integral part of
cultivated fruitful cross-border
relations for many years
already, notably with the aim of ensuring reciprocal recog-
nition of the right to practise in their respective countries.

9.5.
In view of the close link between modernising public
administration and economic innovation, the public and
private sectors should work in tandem to ensure that rights
and duties are properly apportioned among all parties. Training
in specific areas could be organised jointly for the relevant
sectors of
the public service, private enterprise and free
professions — all of whom are represented in the European
Economic and Social Committee.

10.

Final considerations

10.1.
The transformation from a monocracy to a pluralist
democracy, from a state economy to a market economy, and
the subsequent changes to society, social relations and the
needs and aspirations that shape both individual and collective
behaviour have all been guided by existing models, for better
or for worse. With this in mind, it is important to cast a critical
eye over the EU itself and consider whether the policies it
pursues in all areas (politico-institutional, economic, social,
environmental and cultural) are compatible with a competitive
market economy that pursues high social standards and
sustainable development, from the standpoint of the candidate
countries.

Finally the EESC is of the opinion that the integration
10.2.
of Slovenia, like that of every country of South East Europe,
requires a comprehensive regional approach, appropriate
instruments for the implementation of a regional ‘policy’ and
the encouragement of regional cooperation.

The President

of the Economic and Social Committee

Göke FRERICHS