Responsible Body

Government Office for European Affairs (Služba Vlade republike Slovenije za evropske zadeve) Gregorčičeva 25-25A, SI-1000 Ljubljana, Slovenia Phone: +386 1 478 24 50 Fax: +386 1 478 25 00 E-mail: gp.svez@gov.si Web Page: http://www.svez.gov.si/index.php?id=391&L=1 Organization Chart

Mr. Janez Lenarčič Foto: Tina Kosec/BOBO.

Policy Overview

The Government Office for European Affairs (GOEA) is the central body of the Slovenian Government engaged in coordination of European affairs. Its key objective is to effectively promote Slovenian interests in the European Union. It is also instrumental in Slovenia's endeavours to participate in the policy-making within the EU institutions.

The Government Office for European Affairs is headed by Janez Lenarčič, State Secretary for European Affairs, who is assisted by Deputy Director Peter Ješovnik. The Office staff also includes many other experts in European affairs who gained their experience in Slovenia's accession negotiations with the European Union and coordination of preparations for membership.

As the central Government body in charge of coordination of European affairs, the GOEA cooperates with line ministries and other Government offices, Slovenian representative bodies abroad, the working bodies of the National Assembly of the Republic of Slovenia, and with the services of the EU institutions and bodies.

After the completion of the preparations for Slovenia's accession to the EU, the GOEA has been carrying out numerous tasks regarding the coordination of European affairs. These include coordination of participation of Slovenia as a Member State and its representatives in the work of the EU institutions and bodies. It also supervises the preparation of materials on the European affairs (other than Common Foreign and Security Policy) and participates in the parliamentary debate on such matters. It coordinates the implementation of applicable agreements with the EU and Slovenian activities regarding the technical assistance provided by the EU to third countries.

As early as January 2005, Slovenia initiated thorough preparations for holding the Presidency. The overall preparations for structuring the general policy guidelines and priority tasks at the highest level are managed by the Core Working Group for the EU Presidency, chaired by Prime Minister Janez Janša. For operational management and implementation of the project, Operational Group for the EU Presidency has been established. It is chaired by State Secretary for European Affairs. To provide him support for this challenging task, the Project Group for Coordination of Preparation and Holding the Presidency of EU has been established within the GOEA.

This Project Group is also the Focal Point for Slovenia's contacts with Germany and Portugal, the two countries with which the joint 18-month Presidency programme is being elaborated. It also cooperates with other Member States that will be holding the Presidency before and immediately after Slovenia and with the EU institutions.

Milestones

International Cooperation

Multilateral Cooperation

CoE - The Council of Europe

Operates within three main cornerstones of modern society: democracy, rule of law and human rights and fundamental freedoms. Main organisation dealing with sport within the CoE is the so called Committee for the Development of Sport Ena (CDDS). Its scope of activities are:

• implementation of SPRINT programme – help and assistance to new accession countries
• Sport for All (recreation) under the auspices of European Sports Charter (1992)
• Fight against violence in line with the European antiviolence Convention (1986)
• Fight against doping according to the European Antidoping Convention (1989)

Alps Adriatic Working Community

Besides other areas of activities Slovenia participates with the Alps Adria Working Community also in the area of sport within the Working Group for Sport. The main objective of 17 regions coming from 7 countries (Austria, Croatia, Germany, Hungary, Italy, Slovenia and Switzerland) is to deal with sport of young people from 12 to 20 years of age by organising School Sports Days and above all Winter and Summer Games of the Alps and Adriatic Working Community.

ENGSO – The European Non – Governmental Sports Organisations

Was recognised by the International Olympic Committee on the 12th of December 2001 on the basis of the article 4.5 of the International Olympic Charter. Its priorities are working on the questions of sport for children and young people, equal opportunities for sport for women and disabled, transparent and democratic leadership of sports organisations, voluntary work in sport, and significance of sport in the modern society.

EU - The European Union

The European Union has recognised the social and educational significance of sport and supports the so called European dimension of sport as it is defined in the Nice Declaration (2000) and provided in the new article III/282 on Education, Youth and Sport in the the new European Treaty (2004). Its main area of interest is not top sport or commercial sport, (dealt with the implementation of other EU legislation), but rather traditional values of sport, its social function, social democratic values, integration into society, health, inter-cultural and inter-religious dialogue, and the educational strength that sport has always had in the European territory.

UNESCO

Cooperation with UNESCO is carried out through National UNESCO Office and on the framework of the UNESCO International Charter on Phyical Education and Sport (1992) and the so-called Declaration of Punta del Este adopted at the 3rd Ministers conference in Uruguay, 1999. An important area covers common endeavours of the international community to stop the abuse of doping in sport by way of the UNESCO International Convention against Doping in Sport adopted at the 33rd UESCO General Conference on the 19th September 2005 in Paris. It was drafted before the 2006 Olympic Games, that were held in Turin, in order to provide for governments a legal background to act in line with the international fight against doping in sport managed by World Antidoping Agency (WADA) since its establishment in Switzerland in 1999.

Bilateral Cooperation

Bilateral cooperation covers in particular relations with neighbouring countries and certain carefully selected EU countries. It involves in particular the adoption of bilateral agreements on cooperation in sport. So far we have managed to sign Bilateral Agreement with Hungary and there are proposal for the bilateral agreements on cooperation in sport with Austria, Croatia and Russian Federation.

Main Documents

• Declaration on activities of the Republic of Slovenia in the Institution of the European Union in 2006
• Declaration on activities of the Republic of Slovenia in the Institution of the European Union in 2005
• Slovenia's priorities for the work in the EU Council in 2005 (Summary)
• 18 - month Programmme of the German,Portugese and Slovenian Presidencies

Slovenia vs. EU

The development report

Institute for macroeconomic analysis and development published the first Development Report (hereinafter the Report) in 2001, following the adoption of the Strategy for the Economic Development of Slovenia (SEDS). The primary purpose of this Report was to monitor the implementation of the SEDS. In 2005 the SEDS was replaced by Slovenia’s Development Strategy (SDS) whose implementation will continue to be monitored by the Report.

The Report presents the development level and developmental trends in four target areas and five priorities set out in the SDS. It does not, however, evaluate the implementation of the adopted two-year measures defined in the SDS and other measures defined in back-up documents (the Reform Programme for Achieving the Lisbon Strategy Goals of October 2005 and the Framework of Economic and Social Reforms to Increase Welfare in Slovenia of November 2005).

Slovenia’s Development Strategies

Slovenia's Development Strategy (SDS) defines four core national development objectives:

(1) the economic development objective – to exceed the average level of economic development in the EU in the first decade of EU membership, i.e. by 2013;

(2) the social development objective – to improve the quality of living and welfare of the population;

(3) the cross-generational and sustainable development objective – to apply the sustainability principle in all areas of development, including sustained population growth; and

(4) Slovenia’s development objective in the international environment – to become an internationally recognisable and established country.

Although raw data are only available for 2004 and partly for 2005, we give an assessment of development according to these core objectives.

(1) The objective regarding economic development

Slovenia has narrowed its developmental gap relative to the EU but the catching up has been too slow in view of the set objectives. In 2004 Slovenia achieved 79% of the average GDP per capita in PPS in the EU (81% according to the Eurostat’s estimate for 2005). This result ranks Slovenia 16th in the EU, one place higher than in 2000. However, if we compare EU countries according to the speed of their economic development in 2000-2004, Slovenia was only mediocre and ranked 8th to 10th.[1] If Slovenia continues to develop at such a pace it will only achieve 94% of the European average in 2013 instead of exceeding the average development level of the EU as set by the SDS. The comparison of real GDP growth rates leads to a similar conclusion. In 2000-2015, Slovenia’s average economic growth exceeded the average growth in the EU-15 by 1.6 p.p., while calculations indicate that it should have exceeded it by almost double this rate if the set strategic objective is to be met. These results show that Slovenia should bring about some radical changes in order to achieve the SDS goals.

Slovenia’s performance in the area of ensuring macroeconomic stability and employment was more favourable than the results regarding the competitiveness of the economy. Macroeconomic stability provided satisfactory conditions for development. According to macroeconomic indicators (except inflation), Slovenia was ranked in the upper half of EU countries, scoring highest in public debt which was only lower in four countries (the Baltic states and Ireland). Inflation continued to decrease in 2005 and converged with the Maastricht price stability criterion at the end of the year. The adoption of the euro in 2007 will additionally stabilise the national macroeconomic environment.

Economic growth also enabled a rise in employment. The employment rate is rising steadily and has been above the EU average since 2004. The unemployment rate is slightly below the EU average, as is Slovenia’s long-term unemployment, although the share of long-term unemployed is still high. The low employment rate of the elderly and high youth unemployment are a particular cause for concern. The situation in the labour market is still not satisfactory as regards employment although some progress has been made. Part-time employment represents the biggest unused potential where flexibility and employment could be enhanced.

Much poorer results were recorded in the area of competitiveness and promoting entrepreneurial development. In 2004, Slovenia was ranked in the last third among EU countries according to the competitiveness of its economy. Slovenia is still struggling with low productivity linked to the relatively unfavourable economic structure involving a high proportion of manufacturing, composed of high shares of labour-intensive and medium-tech industries that make up the bulk of Slovenia’s exporters. The entrepreneurial sector that could gradually replace the old low-tech industry and boost the development of those most dynamic, knowledge-based services by creating new firms and stimulating their growth is still underdeveloped. In addition, Slovenia’s FDI inflow is among the lowest in the EU. Knowledge-based market and non-market services have been strengthening gradually since 2000. Market services began to grow more intensively in 2004. The banking sector, which could play an important role in supporting dynamic entrepreneurial development, similarly remains poorly developed. Analyses made by international institutions (WEF, IMD, EBRD, World Bank) identify Slovenia’s weaknesses regarding competitiveness and entrepreneurship particularly in the following areas: efficiency of firms, infrastructure, competition, quality of the national business environment, state ownership in the corporate sector, legal certainty and tax burden (notably labour costs).

The competitiveness of the economy also importantly depends on the efficient use of knowledge for economic development. Compared to other EU countries, Slovenia scores high in indicators measuring developmental investment (public and private expenditure on education was ranked in the top third among EU countries, expenditure on R&D was ranked in the upper half while the situation in investment in ICT has deteriorated). On the other hand, Slovenia scores much less favourably in indicators measuring the effects of developmental investment in the development of a knowledge-based society (the population with a tertiary education, number of patents, share of researchers in the corporate sector, number of science and technology graduates, links between the public R&D sector and enterprises). Changes in this area in Slovenia were among the slowest in the EU (23rd place); somewhat more optimistic trends were only observed in the increase in expenditure on R&D. Slovenia’s ranking according to the technology index (WEF) for 2005 is thus unflattering as well, placing Slovenia in the last third of EU countries.

EU countries with rapidly growing economies rank[2] relatively high in the EU according to macroeconomic indicators of competitiveness and indicators of knowledge (particularly when comparing the achieved level of development).[3] Slovenia’s performance is roughly level with Lithuania’s, the former exhibiting slightly lower values in macroeconomic indicators and slightly higher values in indicators of competitiveness and knowledge. According to the pace of improvement in all three groups of indicators in 2000-2004, Ireland is in the lead among countries with rapidly growing economies, followed by Estonia and Lithuania. Slovenia is ranked in the middle, which confirms the correlation between all three groups of indicators and economic growth, where Slovenia also records a median score.

(2) The objective regarding social development

Slovenia has recorded very positive developmental results in the areas of a modern welfare state and higher employment. According to the indicators measuring the situation in these areas, Slovenia belongs to countries with favourable balances in the labour market and the social protection system. It has also performed relatively well in the areas of living standards, risk of poverty and income inequality. Slovenia’s poorest result in social development (12th place) was recorded in the indicator of long-term unemployment. These positive results in social development were achieved despite the lowering of expenditure on social protection as a share of GDP as a result of the pension reform that cut expenditure on pensions. Slovenia scores relatively high in the human development index and has small differences between male and female income. Slovenia’s at-risk-of-poverty rate is the lowest in the European Union when measured before social transfers and second lowest after social transfers. Despite these optimistic results, the low trust of people in institutions could present a developmental problem.

The EU member states with rapidly growing economies generally record lower scores in indicators of modern welfare state and employment[4]. International comparisons show that the level of social development in Slovenia is above the average relative to the achieved level of economic development.

Health care and health insurance are relatively good in Slovenia, while the conditions for development (in terms of public and private funds) relative to GDP are better than generally in the EU. Access to public services is relatively good as well. The main weaknesses are non-participation of part of the population in insurance schemes and long waiting periods. The latter is also the result of the deterioration of the ratio between the number of doctors and the population, which is below the EU average. This also affects the quality of health services.

(3) The objective regarding cross-generational and sustainable development

Slovenia scores around the EU average in terms of the integration of environmental components into economic development. The biggest burdens for the environment are energy intensity and the high consumption of nitrate fertilisers per unit of agricultural land. Other indicators in this area rank Slovenia in the highest third or the top of the middle third of EU countries. From 2000 to 2004, the integration of environmental issues into economic development in Slovenia increased more than in the EU on average (Slovenia was ranked 9th). An unfavourable result was only recorded in the share of road transport in total goods transport (19th place)[5].

Demographic trends in Slovenia are not sustainable. Slovenia was ranked 22nd in the EU according to the situation in 2000 and 24th according to trends in 2000-2004. The critical indicators here are low birth rates and the galloping growth of the proportion of the population aged over 65.

After the regional disparities measured in GDP per capita narrowed in the last two years they have begun to widen again. The main reason for this was the faster development of the capital city region, rather than a decline in Pomurska, the least developed region. Regional variation in Slovenia is small and among the lowest in the EU. The narrowing of cross-regional differences in unemployment that began to show in 2002 has continued, while regional disparities in income (measured as the personal income tax base per capita) have been small and stable since 1995. Similarly as at the national level, regional demographic trends are deteriorating. The population continues to concentrate in Central Slovenia while the number of people living in the peripheral regions is falling.

We can sum up that Slovenia’s development in 2000-2004 was unbalanced. The Strategy for the Economic Development of Slovenia (SEDS, adopted in 2001) advocated that the economic, social and environmental components of development should be balanced. Since Slovenia had the biggest gap vis-à-vis the developed countries in the economic area, faster economic development was prioritised in the SEDS in order to strike a better balance of overall development. Despite this strategic goal data show that during the implementation of the SEDS social development has overtaken economic and environmental development, the latter being measured only by the level of environmental protection integration into economic development.

Such uneven development is not uncommon in the EU countries with rapidly growing economies and partly reflects their different priorities and initial circumstances. The development mix has varied across the rapidly growing economies; however, in none of the ten other analysed countries did social and environmental development outstrip economic development. The situation in Slovenia is an anomaly that resulted mainly from a policy mix which focused on social development, the integration of environmental policies into economic development and macroeconomic stability while neglecting the competitiveness of the economy.

Role of the state in development

The institutional framework has not sufficiently supported development so far. Slovenia was only ranked 18th in the EU according to the IMD’s government efficiency index (2005). Slovenia also performs poorly according the WEF’s public institutions index (17th place in 2005)[6]. This report also points out several problems in different areas related to the efficiency of government bodies and public institutions. They may be divided into three groups: administrative and other barriers to development of enterprise and investment; persistently high ownership shares and management role of the state in the enterprise sector; and the too slow liberalisation of network industries and poor competition protection.

Cumbersome administrative regulations are a serious barrier to entrepreneurship (the time needed to obtain permits, costs of registration), investors (application for building permits) and the operation of enterprises (financial indiscipline, court backlogs). Some progress has been made with the programme aimed at reducing the administrative burden and its upgrading into the one-stop-shop programme. Court backlogs are still too long in the area of enforcement, which are very important for enterprises. Another critical area is spatial planning where land use is being restricted by complicated requirements for spatial documentation and a number of other restrictions that further prolong the building permit application procedures and raise their costs by requiring expert analyses. The operation of the land market is also still hindered by real estate registers.

State control and ownership remains high in the business sector and weakens entrepreneurial initiative. Although the government has adopted several plans to speed up the state’s withdrawal from company ownership, this has not happened so far. Privatisation programmes for the financial sector and network industries similarly remain on paper. The state’s large ownership and control share affect business initiatives of firms and consequently their performance, which is usually poorer than in privately owned enterprises. Company performance in Slovenia was also assessed as poor by international institutions (19th in the EU according to the IMD). Similarly poor results were identified by the WEF’s company operations and strategy index (21st place).

The liberalisation of network industries scored low as well due to the slow creation of competition and the relatively high market share of the incumbent operator even where competition exists. In telecommunication services, particularly in the mobile telephony sector where competition has already been created, the first positive impacts have been recorded as prices have started to fall. The price cuts seen in industrial electricity can similarly be attributed to the stronger competition. Due to the slow liberalisation of network industries and foreign mergers and takeovers in Slovenia’s small market, international institutions (EBRD, WEF) gave Slovenia unfavourable marks for competition. Further reasons were inadequate and insufficient control by the competition protection authority which focuses on concentrations rather than also restraining other kinds of infringement in the market.

The total tax burden in Slovenia is high, with above-average taxes being levied on both consumption and labour[7]. The overall tax burden in Slovenia totals 40.1% of GDP. This ranks Slovenia 10th among the EU countries, 10.7 p.p. below the leading Sweden and 11.6 p.p. above Lithuania which has the lowest taxes in the EU. Slovenia has particularly high taxes on consumption (4th place) and labour (7th place). On the other hand, taxes on capital are very low in Slovenia – only the Baltic states have lower ones.

The high level of general government expenditure as a share of GDP has been reduced over the last two years, but its structure and use are still not sufficiently efficient[8]

Slovenia is ranked around the middle among the EU member states in terms of the level of general government expenditure. However, the high expenditure on 'state-building tasks' in Slovenia (8th place) reduces the funds that contribute more to economic growth. Particularly the expenditure on economic activities, residential and spatial development are below the EU average in Slovenia. On the other hand, expenditure on education and health care places Slovenia in the upper half of EU countries. Low spending on economic activities in Slovenia is partly the result of inappropriate budgeting. Since this is generally the most flexible category of expenditure, the government cuts these funds (subsidies and investment transfers) when it needs to reduce the overall budget expenditure. High general government expenditure and its distribution have a negative impact on economic growth and development. The total expenditure should therefore be reduced and its distribution adequately restructured in Slovenia (these observations are not based solely on international comparisons but also on the recommendations of international institutions).

The efficiency of public finance in Slovenia is not optimal. The level of general government expenditure and other instruments (tax relief, state guarantees, loans, debt takeovers, etc.) alone does not warrant the successful achievement of goals financed by these funds and other instruments. It is evident that public funds in Slovenia are inadequately distributed and inefficiently spent in a number of areas (education, health care, research and development, state aid, social transfers). As a result, they also do not produce the desired outcomes. There are several reasons for this situation. The most important ones include the poor co-ordination of policies at the national level, budgeting that does not ensure quality control over financed programmes, and lacking records and post-evaluation of programmes and their impact on the recipients.

The government responded to the described deficiencies by adopting the SDS and subsequently the more detailed Reform Programme for Achieving the Lisbon Strategy Goals, thus joining in in the structural policies of the EU. In order to carry out radical changes in its economy and social policy, Slovenia further adopted the Framework of Economic and Social Reform to Increase Welfare in Slovenia, which is primarily aimed at boosting the competitiveness and growth of the economy. This aim must be backed by knowledge, quality jobs and an efficient and cheaper government. The reform addresses all key structural problems of Slovenia (business environment and administrative burden, privatisation, taxation, general government expenditure and its efficiency, and the spending of structural funds, both national and those acquired from the EU budget). The implementation of the reform has only been launched this year, hence the effects will become measurable next year when we can also begin monitoring the achievement of the objectives and priorities of Slovenia’s Development Strategy.

Gross domestic product per capita in purchasing power standards

In January 2006 Eurostat released data on the levels of gross domestic product per capita expressed in purchasing power standards (GDP in PPS) for 2003 and 2004. The results for 2003 are based on the final calculations of purchasing power standards (PPS)[9] used as conversion rates for GDP in national currencies, whereas the results for 2004 are based on preliminary PPS estimates.

Slovenia achieved 79% of the average GDP per capita recorded in the EU in 2004, which is three percentage points more than in 2003. The bulk of this difference can be explained by the considerably faster real growth of the Slovenian GDP per capita compared to the average growth in the EU-25 in 2004 (4.1% in Slovenia and 1.9% in the EU-25).

Among the new EU member states, only Cyprus still had higher GDP per capita in PPS in 2004 (83%). In comparison to the old members, Slovenia approached Greece, reducing its gap vis-à-vis this country to three percentage points. In 2003, Slovenia still lagged behind Greece by 4 p.p. according to GDP per capita. Slovenia outstripped Portugal (72%) already in 2003. Otherwise Portugal, France, Italy and Malta belong to the group of member states whose GDP per capita fell in 2004 over 2003 – in Portugal by 1 p.p., in the others by 2 p.p. Among the new members, the Czech Republic (70% of the EU average) was the second best country after Slovenia.

According to GDP per capita in PPS, EU countries achieved between 43% and 226% of the EU-25 average in 2004. Luxembourg[10] remains the most affluent country with GDP per capita in PPS twice higher than the European average (226%). Ireland outstripped the EU average by 37% in 2004. The Netherlands, Austria, Denmark, Belgium, Sweden and the UK were 20% above the average. Finland, France and Germany surpassed the average by 10%, while Italy and Spain were level with the European average. Cyprus, Greece and Slovenia hover around 20% below the EU average; Portugal, the Czech Republic and Malta fell 30% short of the average, while Hungary lagged behind by 40%. The lowest GDP per capita in PPS in the EU was recorded in Latvia (43%) and Lithuania (48%). Poland also achieved less than 50% of the EU average, while Estonia and Slovakia are just above this value.

Table: GDP per capita in PPS, level indices, EU-25 = 100

Contact Persons

State Secretary's Office
Head of the State Secretary's Office
Igor Mally

telephone: +386 1 478 24 50
fax: +386 1 478 24 96
e-mail: igor.mally@gov.si

State Secretary's Office
Public Relations Officer
Anže Logar

telephone: +386 51 608 331
fax: +386 1 478 24 96
e-mail: anze.logar@gov.si

Directorate for Coordination
Director of Directorate for Coordination
Živana Mejač

telephone: + 386 1 478 24 44
fax: + 386 1 478 24 96
e-mail: zivana.mejac@gov.si

Project Group for Coordination of Preparation and Holding the Presidency
Head of the Project Group
Tanja Strniša

telephone: + 386 1 478 26 68
fax: + 386 1 478 24 85
e-mail: tanja.strnisa@gov.si

Coordination II Department
Head of the Department
Vida Kržan

telephone: + 386 1 478 24 02
fax: + 386 1 478 2486
e-mail: vida.krzan@gov.si

Coordination I Department
Head of the Department
Petra Draušbaher Krušič

telephone: + 386 1 478 24 80
fax: + 386 1 478 2486
e-mail: petra.drausbaher-krusic@gov.si

Directorate for Technical Assistance and General Affairs
Head of the Directorate
Stojan Tramte

telephone: + 386 1 478 26 72
fax: + 386 1 478 24 69
e-mail: stojan.tramte@gov.si

Useful Links

Government Office for European Affairs
http://www.svez.gov.si/index.php?id=406&L=1

Government Public Relation and Media Office
http://www.uvi.si/eng/

Government Office for Local Self-Government and Regional Policy
http://www.gov.si/svrp/eng.html

Institute of Macroeconomic Analysis and Development
http://www.gov.si/umar/aindex.php

Chamber of Commerce and Industry of Slovenia about European Union (only in Slovene)
http://www.gzs.si/eng/

IER - Institut for Economic Research
http://www.ier.si/english/index.html

Centre of the Republic of Slovenia for Vocational Education and Training
http://www.cpi.si/en/

Slovenian Business and Research Association
http://www.sbra.be/

Small Business Development Centre
http://www.pcmg.si/index.php?root=4