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Vol 2, No 39
13 November 2000
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EC Progress Reports 2000EC 2000 Progress Report on Slovenia
Brian J Požun

The "2000 Regular Report from the Commission on Slovenia's Progress towards Accession" was released on Wednesday, 8 November. Overall, Slovenia was judged to be well on its way towards membership, and all signs indicate that Slovenia will be among the first countries admitted to the Union, probably in 2003 or 2004.

Despite the fact that the EC cautioned the government earlier this year that the parliamentary crisis of April to June would have a negative impact on the Report, this does not seem to have happened. The Commission is generally satisfied with many key areas—most importantly, the internal market, agriculture, veterinary law, energy and environment. Several other key areas were criticized, however, such as denationalization, judicial backlogs, reform of public administration, low levels of foreign direct investment, duty-free shops and border concerns.

The Report was received by the Slovene press with reserved satisfaction. Journalists proudly stressed the advances made, especially with regard to agriculture and energy. However, the EC's criticisms were also dissected, with most attention being drawn to the problem areas of administrative reform, denationalization, foreign direct investment and the border and other unresolved issues between Slovenia and Croatia.

Economic and political criteria

According to the Report, Slovenia essentially meets all political criteria, though with numerous reservations. The major problems the EC sees in this area include the fact that the legislative process is too slow and reform efforts have made no headway. The Report does give Slovenia credit, however, for treating EU-related laws with priority and recognizes that efforts have been made to accommodate them more quickly.

The EC would also like to see Slovenia direct more attention toward judicial reform, which was also highlighted as a major problem in last year's report. The major issue here is the large backlog of pending court cases. However, the press pointed out that the backlog was lowered by four percent from the end of June 1999 to the end of June 2000.

Denationalization is a perennial problem between Slovenia and the EC. It was highlighted once again in the 2000 report, and not without reason: as of August 2000, eight years after the necessary legislation was passed, only 53.7 percent of relevant property has been denationalized.

Many of the EC's criticisms of Slovenia's alignment to the EU's political criteria mirror those of the country's Ombudsman for Human Rights. In his fifth annual report, released in May 2000, the Ombudsman cited that most complaints of human rights violations stemmed from administrative problems that could be solved by reform. Judicial backlogs and the slow rate of denationalization, two other serious concerns of the EC, were also discussed in that report.

Slovenia essentially meets all economic criteria, but the EC sees more room for improvement in this area than in the political area. While some countries were called "functioning market economies" in their reports, Slovenia was among those countries who merely "can be regarded as a functioning market economy." More reform is necessary for the country to advance to the next level.

The Report points out that the country has had significant macroeconomic stability and steady growth and that the "legal and institutional framework for a market economy is largely in place." However, it takes issue with many things. Pension reform, slow rates of privatization and low levels of foreign investment have been problems for several years, and the current report discusses all three at length.

Public administration reform

As discussed in CER last week, reform of public administration is becoming a big issue even within the country. The Ombudsman's report states that the majority of human rights violations within the country stem from poor administration.

Currently, Slovenia has more than 18,000 civil servants. The EC Progress Report maintains that further recruitment is necessary, as well as more extensive training.

The EC Progress Report also discusses the need for reform of public administration under Political Criteria, and states that "little progress has been achieved in this respect since the last Regular Report as important pieces of legislation which are to provide the basis for reform have not yet been adopted." One of the major laws in this field, however, the Law on Civil Servants, has yet to even be prepared.

Duty-free shops

Slovenia's reluctance to close its duty-free shops on the borders with Italy, Austria and Hungary has become a much greater problem than it should be. Slovenia is criticized under the tenth chapter of the Report, on taxation: "Despite Slovenia's commitment under the Europe Agreement to end the duty-free status of the shops on its land borders by July 1998, this still remains to be implemented."

The closure of the duty-free shops is not only causing problems between Slovenia and the EU, but also between factions within Slovenia itself. Maribor mayor Boris Sović has emerged as a vocal critic of the government's plan to close the shops by 1 January 2001, a plan which will most probably not be enacted due to the fact that Parliament was unable to pass the necessary legislation in time. Sović feels that Slovenia would be best served by closing the shops the instant the country gains accession to the Union and not a moment before. Also, a program for converting the duty-free shops into regular shops must be in place.

Regional development

Slovenia was not particularly criticized for its regional policies in the Report, but the government has come under fire from within. Under chapter 21, on regional policy and co-ordination of structural instruments, the Report says, "In the last few years, Slovenia has developed the necessary structures for the implementation of the Structural Funds after accession." There are some criticisms, but none of much significance.

As it stands, there is no regional government in the country, and Slovenia would not be eligible for EU funds tagged to regional authorities. So in March, the government decided on a plan to divide the country into two regions: one region composed of Ljubljana and its hinterland, and a second comprised of the rest of the country. The plan was presented to the EC in May, but the Commission has yet to comment.

However, in the past week regional policy was pushed to the fore. The daily Delo reported that the mayors of all 12 municipalities in the northern Koroška (Carinthia) region have begun an initiative to bolster Slovenia's programs for local self-administration and regionalism, and ultimately to have a ministry of regionalization established in the government that is to be formed in the coming weeks.

Given the fact that the prior government had failed to name a state secretary for local self-administration, little was done in the field of regionalism in that government's mandate. According to the mayors, analysis of employment, economy, infrastructure and education statistics show great disparities among Slovenia's regions and this would best be addressed by a new ministry.

In Večer, Maribor mayor Boris Sović spoke out against the proposal to divide Slovenia into two regions. According to him, regional disparities can only be generalized into three regions: west (Primorska), central (Ljubljana) and east (Maribor, Prekmurja). The east has the lowest level of development and the highest level of unemployment and should, he argues, be granted separate status in regional development programs.

Border regulation

Border-related issues are discussed under chapter 24, "Co-operation in the field of justice and home affairs," of the Report. The Report says that "the overall situation and level of alignment in the Justice and Home Affairs area is in general good, with the exception of border control, on which further efforts are still needed."

The EC criticizes the fact that no significant progress has been made with regard to border control issues and maintains that the country must devote considerably more attention to this. In particular, the EC mentions the disputed border with Croatia along the Bay of Piran and the fact that control along the border must be tightened since Slovenia has become a major transit country for illegal immigration.

Momentum to resolve this and other outstanding issues with Croatia was seen earlier this year, with the arrival of Mesić to the presidency of Croatia, but perhaps now with a new parliament and the new developments in Yugoslavia, greater impetus can be found to finally resolve these issues.

Membership by 2003?

Even with the Commission's criticisms and the fact that Slovenia still has a long way to go before it meets all membership criteria for the European Union, the government insists it will be fully prepared by 2002. The new government should be constituted in the next weeks, and EU preparations are its most pressing duty.

The politically left Liberal Democrats (LDS) are currently trying to form the new government and have indicated that they are interested in involving the
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right-wing SLS+SKD Slovene People's Party in the governing coalition. However, this may not be the best of plans. A more secure coalition composed of left-center parties such as the LDS and the United List of Social Democrats (ZLSD) would provide the government with considerably more stability, and thereby increase its chances of staying on track for EU accession by 2003.

Steps are already being taken to resolve the key problem areas of denationalization, judicial backlogs, reform of public administration, low levels of foreign direct investment, duty-free shops and border concerns. As the report indicates, progress has been made, just not enough. There is a realistic chance of solving these problems within two years, but for this to happen, the government must remain stable. A crisis like that of last spring cannot be allowed to be repeated.

Brian J Požun, 13 November 2000

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