Slovenia: Country Background Report

Slovenia: Country Background Report

97-554 F
Updated November 30, 1999
CRS Report for Congress
Received through the CRS Web
Slovenia: Country Background Report
(name redacted)
Specialist in International Relations
Foreign Affairs and National Defense Division
Summary
Slovenia seeks membership in the European Union and NATO and is considered to
be among the top candidates currently aspiring to join each organization. Independent
from the former Yugoslavia since 1991, Slovenia has focused on consolidating its
transition to a democratic market economy and integrating into western institutions. By
most assessments, Slovenia has been successful in these efforts, especially in comparison
with the conflict-ridden experience of the other former Yugoslav republics. This report
provides background information on Slovenia, and may be updated as events warrant.
Background
The area that is now Slovenia was originally settled by Slavs in the 6th century. By
the 9th century, "Slovenia" was incorporated into the Holy Roman Empire where it
remained until it became a member of the Austrian Hapsburg Empire in the 14th century.
When the Austro-Hungarian empire collapsed at the end of World War I, Slovenia joined
Serbia and Croatia in the "Kingdom of Serbs, Croats, and Slovenes," later renamed
Yugoslavia. During World War II, Slovenia was partitioned between Germany, Italy, and
Hungary. The Slovene Liberation Front joined with partisan forces led by Josip Broz Tito
to liberate Yugoslavia in 1944-1945. In 1945, Yugoslavia became the Federal People’s
Republic of Yugoslavia (later the Socialist Federal Republic of Yugoslavia), of which
Slovenia was one of six constituent republics. Tito ruled until his death in 1980.

Under Tito, Yugoslavia played a maverick non-aligned role during the Cold War.
Tito embarked on limited economic reforms that sparked some economic growth in the
1950s, but the Yugoslav economy began to stagnate in the 1970s. Slovenia, the most
prosperous Yugoslav republic, sought greater decentralization in the Yugoslav federation.
In a December 1990 referendum held in the republic, nearly 90% of participants favored
independence. On June 25, 1991, Slovenia formally declared its independence from
Yugoslavia. After a brief conflagration, the Yugoslav federal armed forces pulled out of
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Slovenia on July 18, 1991. Slovenia gained international recognition as a free,
independent country in late 1991 and early 1992, and became a member of the United
Nations in May 1992.
Political Institutions. On
December 23, 1991, the Slovenian
Slovenia at a Glance
assembly passed a new constitution
defining Slovenia as a democratic
Area:
20,273 sq km (7,906 sq mi); slightly
smaller than New Jersey
republic and a legal and social state with
Population: 1.97 million (1999 estimate)
power divided among the legislature, the
Ethnic groups:
Slovenes: 91%
executive, and the judiciary. As a
Croats: 3%
parliamentary democracy, the president
Serbs: 2%
Muslim: 1%
serves as head of state and is the
Others: 3%
commander-in-chief of Slovenia's defense
Religious groups: mostly Roman Catholic; some
forces. The government, the highest
Lutheran and Eastern Orthodox
executive body, is headed by a prime
GDP/capita:
$10,000 (1998 estimate)
Leadership
minister who is proposed by the president
President:
Milan Kucan
after consultation with the various
Prime Minister:
Janez Drnovsek
parliamentary groups. The government
Sources: U.S. Department of State, CIA World Factbook.
is answerable to the National Assembly,
the highest legislative body, which
consists of 90 members, each elected to
four-year terms. The National Council, with 40 councilors elected to five-year terms,
serves as a legislative advisory body representing sectional and local interests, with the
power only to initiate and delay legislation. The Constitutional Court, whose nine judges
are elected by the National Assembly, is the ultimate authority on the constitutionality of
statutes.
Current Political Situation. Slovenia's most recent parliamentary elections were
held in November 1996. The results brought about a four month period of political
paralysis. Prior to the vote, three right-wing opposition parties, the Christian Democratic
Party (SKD), the Slovenian People's Party (SLS), and the Social Democratic Party (SDS),
aligned themselves as the "Slovenian Spring" coalition. It was thought that the alliance
formed between these three groups would offer the best chance of upsetting the
stronghold of the ruling Liberal Democratic Party (LDS). The LDS won a plurality of the
vote (27%) but struggled to form a government. In February 1997, the LDS brokered a
coalition agreement with the center-right Slovenian People’s Party (thereby splitting the
“Slovenian Spring”) and the small Democratic Party of Pensioners (DeSUS). The “grand
coalition” currently holds 50 of 90 seats in the National Assembly. Under the power-
sharing arrangements, Drnovsek remained Prime Minister; Marjan Podobnik and Janez
Podobnik, both of the SLS, became Deputy Prime Minister and president of the National
Assembly, respectively. The next parliamentary elections are scheduled to be held by late
2000. The current government is expected to finish its mandate. In November 1997,
voters re-elected incumbent Milan Kucan to be President for a five-year term. Kucan won
by a large margin over a divided opposition.
Economy. Of the six republics of the former Yugoslavia, Slovenia accounted for
only 8% of the total Yugoslav population, but its economy was the most advanced and
industrialized. With a well developed industrial and manufacturing base, modern
infrastructure, and a trained and efficient labor force, Slovenia's economic future as an

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independent country appeared bright. The dissolution of Yugoslavia produced a short but
severe economic slump, largely due to dislocations in production, employment and
ruptured trade ties. Slovenia’s economy resumed growth in 1993 and in subsequent years
GDP has grown about 4% annually. Slovenia has one of the highest per capita income in
the region (around $10,000). Inflation decreased from over 200% in 1992 to under 8%
at the end of 1998, thanks to tight monetary and fiscal policies. Unemployment has
remained high, at about 14% in 1998, according to Slovenian figures.
Key to the economic transition has been the government’s emphasis on opening the
economy to trade and investment. A recent priority has been on accelerating privatization
of the country’s large public sector, especially in banking, telecommunications, and energy.
In addition, further economic and administrative reforms consistent with the aim of joining
the European Union remain a priority. Over two-thirds of Slovenia’s trade is with
European Union countries. Slovenia maintains free trade agreements with many countries
on a bilateral basis, with the European Free Trade Association (EFTA), and is also a
member of the Central European Free Trade Agreement (CEFTA).1
Human Rights and Freedoms. According to the State Department's Country
Reports on Human Rights Practices in 1998, no major human rights problems were
evident in Slovenia. The constitution prohibits torture, inhumane treatment and arbitrary
arrest, guarantees the right to a fair public trial, political rights, and respect for civil
liberties. The report assessed that the Slovenian government respected the rights of its
citizens, the judiciary was independent of the government, and that the media enjoyed full
freedoms. An ombudsman deals with individual human rights problems. Minorities
generally are treated fairly in practice as well as in law; however, several thousand non-
Slovene residents remained without citizenship because of slow governmental processing
of citizenship applications.
Foreign Policy and Defense
Slovenia's main foreign policy goal is to achieve full membership in international and
European organizations, especially the European Union and NATO. A successor state to
the former Yugoslavia, Slovenia has been largely able to distance itself from the prolonged
violent ethnic conflict experienced in Croatia, Bosnia, and Kosovo. Slovenia became a
member of the United Nations on May 22, 1992. It has also joined the International
Monetary Fund (IMF), the World Bank, the World Trade Organization, the Organization
for Security and Cooperation in Europe (OSCE), the Council of Europe, the Central
European Free Trade Agreement (CEFTA), and a number of other international
organizations. At the end of 1999, Slovenia concludes a two-year term as a non-permanent
member of the U.N. Security Council.
European Union. In October 1994, Slovenia's negotiations with the EU on an
association treaty (the first step toward eventual full membership) were blocked by Italy's
right-wing government over a property dispute that dated back to World War II. By
March 1995, after a new Italian government came to power, Italy lifted its veto on EU
negotiations with Slovenia; in return, Slovenia agreed to negotiate with the EU and Italy
Economic
1
data from U.S. Department of State Fiscal Year 2000 Country Commercial Guide for
Slovenia.

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on property rights. The two nations agreed to a compromise arrangement in the
framework of the EU association treaty negotiations, under which all EU citizens would
be allowed to buy property in Slovenia, on a reciprocal basis.2 On June 10, 1996, Slovenia
signed an association treaty with the EU, becoming the 10th associated EU member, and
simultaneously applied for full EU membership. Italy has meanwhile expressed full
support for Slovenia's eventual membership in the EU and NATO.
In March 1998, the European Union opened accession negotiations with six candidate
countries: Slovenia, Poland, Hungary, the Czech Republic, Estonia, and Cyprus. In its
November 1998 progress report on candidate countries, the European Commission
criticized Slovenia’s poor record of adopting the acquis communitaire, the EU’s body of
law. In contrast, the Commission’s October 1999 update praised Slovenia’s “impressive
efforts” to accelerate harmonization in the intervening year. The report also noted
continued areas of deficiency, especially in public administration and judicial reform, delays
in court proceedings, delays in the denationalization process, and the need for further
privatization. Safety and ownership issues regarding Slovenia’s nuclear power plant at
Krsko, which are tied in with Slovenia’s relations with Croatia, are likely to represent
additional negotiation topics with the EU. Slovenian officials have stated that Slovenia
should be ready for EU accession by the end of 2002.
The Kosovo crisis in 1998-1999 created a new momentum to the EU’s approach to
enlargement. The European Commission recently recommended that six additional
candidate countries (Slovakia, Bulgaria, Romania, Latvia, Lithuania, and Malta) be invited
to open accession negotiations in 2000. In June 1999, the European Union endorsed the
Stability Pact for Southeastern Europe, a broad international initiative intended to enhance
security and stability and to promote economic recovery in countries of the region. A
summit meeting of participating Stability Pact countries, including Slovenia, and
international organizations was held in Sarajevo in July. Three working groups, or
roundtables, were established on: economic reconstruction, development, and cooperation;
human rights and democracy; and security issues. The Slovenian government has
expressed full support for the activities and projects of the Stability Pact.
NATO. Entry into NATO has been a stated goal of the Slovenian government since
1993. Slovenia joined NATO’s Partnership for Peace (PFP) program in March 1994 and
has since actively participated in PFP exercises and other PFP-related activities. In spite
of support from some NATO allies, Slovenia was not invited to open membership talks
with NATO at the Madrid summit in July 1997. The Madrid summit extended invitations
to Poland, Hungary, and the Czech Republic, but declared an “open door” policy with
regard to additional invitations. The three invited countries formally joined the alliance in
March 1999. Officials from many NATO countries have said that they would consider
Slovenia favorably in the next round, whenever such a decision is made. At the April 1999
Washington summit, NATO instituted a Membership Action Plan to help prepare aspirant
countries for future alliance membership. The summit also singled out for praise the
“front-line” countries surrounding Yugoslavia, including Slovenia, for their role in
supporting NATO’s air war.
2The Financial Times, June 10, 1996.

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During NATO’s Allied Force operation, Slovenia supported NATO’s intervention,
offered NATO use of the country’s air space, and assisted in NATO-led humanitarian
efforts in Albania. A clear majority of the population supported the NATO action, in
contrast to the more negative public opinion registered in other countries in the region
(including among NATO allied countries). Six Slovene Army officers are to join Kosovo
Force (KFOR) headquarters at the end of 1999. Slovenia currently also contributes a
flight crew to NATO’s Stabilization Force (SFOR) headquarters in Bosnia, and military
police personnel to SFOR’s paramilitary Multinational Specialized Unit. It also
contributed a medical unit to the Italian-led humanitarian operation in Albania, Operation
Alba, in mid-1997.
Slovenia had to build up its armed forces from scratch after achieving independence
in 1991. The armed forces have undergone a steady process of reform and restructuring.
In February 1998, the government adopted a National Strategy for Integration into NATO,
which remains the country’s roadmap for NATO membership. The Slovenian Armed
Forces currently total about 60,000, mostly reservists. Over the next decade, the reserve
structure is to be reduced to 33,000 while the professional component increases. With
about 5,000 professional soldiers and 5,500 conscripts participating in 7-month service
rotations, the Slovenian army totals 10-12,000 men at any given time. Under the
restructuring plan, the armed forces will be comprised of rapid reaction forces, main
defense forces, and support defense forces. The Slovenian army is building a professional
motorized infantry battalion for use in international peacekeeping activities. 1998 defense
expenditures amounted to about $272 million, or 1.8% of GDP.3 The government plans
to increase defense spending to 2.3% of GDP in 2003.
Regional Relations. Slovenia participates in numerous regional cooperation
initiatives, including the Central European Initiative, CEFTA, the Southeastern Europe
Cooperative Initiative (SECI),and, recently, the Stability Pact for Southeastern Europe.
Slovenia and Croatia have maintained several unresolved bilateral issues since they both
gained independence in 1991. In October 1999, Croatian Prime Minister Zlatko Matesa
made his first official visit to Slovenia. The two governments concluded an agreement on
property rights and expressed willingness to seek solutions to the remaining issues. These
include the demarcation of their common land and sea borders, joint ownership of the
Krsko nuclear power plant, and Croatian citizens’ foreign currency deposits in a Slovenian
bank. None of these issues is considered a threat to regional stability, though both sides
have said that they seek to resolve all of them as soon as possible. Slovenia has yet to fully
normalize relations with Serbia-Montenegro. Several succession issues among all of the
former Yugoslav republics remain unresolved. In November 1999, Slovenia along with
Bosnia, Croatia, and Macedonia drafted a U.N. General Assembly resolution that would
require Serbia-Montenegro to reapply for U.N. membership. During the Kosovo conflict,
Slovenia hosted several thousand Kosovar refugees, including several hundred refugees
that were evacuated from refugee camps in Macedonia.
3CIA World Factbook; Slovenian Ministry of Defense web page [http://www.mo-rs.si/].

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U.S. Policy
The United States recognized Slovenia as an independent country on April 7, 1992,
along with Croatia and Bosnia-Herzegovina. The Clinton Administration has supported
Slovenia’s efforts to eventually join the European Union and NATO, although it favored
limiting the first wave of NATO’s eastern enlargement to Poland, Hungary, and the Czech
Republic. Since the April 1999 NATO summit in Washington, Administration officials
have reiterated that they remain supportive of NATO’s “open door” policy with regard to
further enlargement of the alliance.
President Clinton visited Slovenia in June 1999, the first U.S. President to do so.
Clinton thanked Slovenia for its support of NATO’s operation in Kosovo and called
Slovenia a model for the region and “an excellent candidate for NATO.” As part of that
visit, the United States and Slovenia concluded four bilateral agreements on taxation,
export financing, non-proliferation, and scientific and technological cooperation. U.S.
foreign assistance to Slovenia under the Support for East European Democracy Act, which
provided over $12 million in transition assistance to Slovenia, ended after Fiscal Year
1996. The United States continues to provide bilateral military assistance to Slovenia.
The United States ranks ninth among foreign investors in Slovenia.

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