Slovenia Country Brief
Background
Located in Central-Southern Europe, Slovenia borders Hungary to the north, Croatia to the east and Italy and Austria to the west. Slovenia has 47 km of coastline. Slovenia is home to over 2 million people (June 2008 est). The capital of Slovenia is Ljubljana.
Slovenia is a democratic republic, with a bicameral parliamentary system. It declared independence from the former Yugoslavia in 1991. In 2004 Slovenia achieved EU and NATO membership. On 1 January 2007 Slovenia joined the Eurozone. On 21 December 2007, Slovenia joined the EU Schengen zone. Slovenia was the first former communist member of the EU to hold the rotating Presidency of the European Union ( January to June 2008).
Bilateral Relations
Relations between Australia and Slovenia are based on small, but growing, trade relations and strong community ties. Australia recognised Slovenia as an independent state on 16 January 1992 and established diplomatic relations on 5 February that year. The Australian Embassy in Vienna is accredited to Slovenia and an Australian Honorary Consul is based in Ljubljana. Austrade covers Slovenia from Warsaw. Slovenia has an Embassy in Canberra, and a Consulate-General in Sydney.
Australia has a small but active Slovenian migrant community, many of whom migrated to Australia in the 1950s and 1960s. The 2006 Census recorded 16,085 people of Slovenian origin living in Australia, with most living in Melbourne and Sydney. More than 14,000 Australians visited Slovenia in 2005 and Australia is also a popular destination for Slovenian tourists and students.
Australia's trade with Slovenia is modest. Two-way trade in 2007-08 totalled A$70 million, with Australian exports accounting for A$15 million, while imports were A$55.6 million. Australia's major exports to Slovenia included aluminium ores and medicaments. The main imports from Slovenia in 2007-08 included trailers and semi-trailers, rubber tyres and household type equipment.
Australian retailer Harvey Norman opened a furniture retail store in Ljubljana in 2002. In 2005 Aristocrat Leisure Limited, an Australian based, global entertainment company obtained a 50 per cent share in the Slovenian company Elektroncek Group BV. Opportunities exist for Australian businesses in infrastructure development projects and sectors such as IT, pharmaceuticals, banking, insurance and telecommunications.
Political
The President of the Republic is the Head of State and is elected by popular vote every five years, for a maximum of two terms. Dr Danilo Turk was elected President in November 2007. The President is the Supreme Commander of the Armed Forces who,despite having chiefly ceremonial powers, retains enough moral authority for the system to be characterised as a 'dual executive'. The powers of the President include nominating the Prime Minister after consultation with parliamentary groups and, in rare circumstances, the power to pass laws and dissolve the parliament.
Legislative power is vested in the Head of Government, the Prime Minister, and a Council of Ministers (Cabinet). Both the Prime Minister and the Council of Ministers are elected by parliament. In September 2008 Borut Pahor, leader of the centre-left Social Democrats, (SD) was appointed Prime Minister after his centre left wing political party the Social Democrats (SD) won the most seats in the general elections.
The bicameral Slovenian parliament is made up of, the 90-member National Assembly, and the 40-member National Council. The National Assembly is elected for four years and comprises 38 directly elected deputies, 50 members selected on a proportional basis and two non-elected representatives of the Hungarian and Italian minorities. The National Council, which exercises an advisory function, has 22 directly elected members and 18 non-elected members representing various social, economic, trading, political and local interests.
Slovenia’s new government was sworn in on 21 November 2008. Prime Minister Borut Pahor’s centre-left cabinet took office on 24 November. The centre left coalition government is made up of the Social Democrats (SD), “Zares” (For Real), Liberal Democracy of Slovenia (LDS) and the pensioners party DeSUS. The four parties together hold 50 of 90 seats in parliament. Pahor has promised to combat the effects of the financial crisis, cut taxes, reform the health and pension systems, and increase investment incentives. Other priorities include combating climate change and promoting the expansion of renewable energy sources.
Economic
Slovenia’s economic performance has been much stronger than the other former Yugoslav states, making Slovenia one of the strongest economies among the new members of the EU. Slovenia’s financial institutions, which have a high level of local ownership, are in a better position than most European States to weather the financial crisis. However, with exports supporting 80 per cent of the Slovenian economy, Slovenia’s future will be influenced by the impact of the crisis on other European countries, particularly Germany and Italy (which together take 40 per cent of Slovenian exports). Services account for 63 per cent of Slovenia’s GDP; industry 34 per cent; and agriculture only 2 per cent (which accounts for 1 per cent of the workforce). Unemployment was between 5.5 and 8 per cent in 2008.
Slovenia was the first of the new EU members to join the Eurozone (1 January 2007). Slovenia boasts the highest GDP per capita in Central Europe and its economy is growing twice as fast as the rest of the Eurozone (6.8 per cent in 2007), a result of stability in domestic demand and export activity. Due to its macroeconomic stability, favourable foreign debt position, and EU membership, Slovenia consistently receives the highest credit rating of all former soviet economies. Many commentators, however, still regard Slovenia as a protected economy in which competitors continue to struggle against the state’s large ownership stakes in significant companies. It is estimated that as much as 40 per cent of corporate capital is state owned.
Privatisation and increased investment opportunities remain key economic policy issues for Slovenia in 2009. However, reform in these areas is slow and difficult due to the consensus-based nature of Slovenian policy-making. Slovenia also faces an urgent need to reform its welfare system, particularly its pension and health system, in response to the rapid ageing of its population. Slovenia’s employment protection is high compared to other European countries and its labour movement is not very active.
Foreign Policy
Slovenia became a member of the EU on 1 May 2004 and held the rotating Presidency of the Union in January-June 2008. Slovenia joined NATO in March 2004,.Slovenia is also a member of the Council of Europe.
One of the goals of Slovenia’s foreign policy is to ensure stable relations with its neighbours – Austria, Italy, Hungary and Croatia. Slovenia works alongside other Central European countries within the Central European Initiative and Regional Partnership and contributes to the stabilisation of South Eastern Europe within the Stability Pact. Slovenia is a member of many international organisations and regional initiatives, including in 2005, chairing the Organisation for Security and Cooperation in Europe (OSCE).
Slovenia currently has over four hundred troops deployed on foreign peace-keeping missions, a reflection of its commitment to international conflict resolution. Slovenia restructured its armed forces in 2006, primarily to participate in NATO operations outside of Slovenia. Its security priorities are focused on the Balkans, but it has also sent troops to Afghanistan, as part of the United Nation’s International Security Assistance Force (ISAF), and military trainers to Iraq.
Trade Opportunities
The port at Koper, modern rail and road transport networks that connect with central Europe, membership of the Central European Free Trade Agreement (CEFTA) and the EU, and traditional business ties with the other former Yugoslav republics, give Slovenia a strong platform as a base for businesses wishing to do business in the central and eastern European markets Domestically opportunities exist in energy, particularly renewable energy and traffic logistics. Further opportunities will arise through the new government's commitment to construct a second nuclear reactor block at the Krsko Power Plant, Slovenia’s only nuclear power station.
Privatisation of state assets is one area where Slovenia has lagged behind other Central European countries. Some progress was made in 2002, with the partial sale of Slovenia's largest bank, Nova Ljubljanska Banka (NLB) Lek, the country's largest pharmaceutical company. Further privatisation projects, in the banking and manufacturing sectors have been on hold since 2003, slowing down the restructuring process. Despite the government’s renewed efforts in 2006 through its privatisation program for the sale of state stakes in banks and major utilities no progress has been made, and the state is expected to hold minority stakes in any privatised company.
Last updated: 15/01/2009