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"Slovenia and the European Union", Address by Dr Danilo Türk, Former President of the Republic of Slovenia at the Sarajevo Business Forum

Sarajevo, Bosna in Hercegovina, 17. 5. 2013 | govori

Sarajevo Business Forum

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In the time of a generation, Slovenia has gone through two fundamental and closely related experiences: transition and EU membership. These two experiences were often seen as one -and one which has had a deep transformative effect.

In fact, in Slovenia, transition started in mid 1980s and it transcended politics and economy. It was the spirit of the time resulting from the processes of profound change which started in Europe. The European Community overcame its period of "Eurosclerosis" in 1986 and opened a new horizon of integration and prosperity for Europe. At the same time, the Eastern Europe stagnated in a prelude to its ultimate demise. The former Yugoslavia was showing increasing signs of inability to solve its economic and political problems and to adjust to the changes in its regional environment. That inability proved to be fatal.

As the end of the cold war was approaching in late 1980s, change, meaning serious social, economic and political change was becoming the order of the day. People felt that. I was teaching international law in Ljubljana at that time and an increasing number of my best students were showing serious interest in studying European law and European institutions. I directed some of them to studies at the College of Europe in Bruges. Today, a generation later, they occupy excellent positions in the European institutions in Brussels and Strasbourg.

Meanwhile the fate of former Yugoslavia took a tragic turn. There were political calls to put membership in the then European Communities at the center of the needed strategy of transformation of Yugoslavia - remember the call of the Slovene League of Communists "Europe Now!" which, in Slovenia, replaced the previous slogan "Proletarians of the World, Unite!" However, calls such as this did not prevail. Nationalist propaganda grew in strength and Yugoslavia eventually disintegrated amid a violent conflict of which Bosnia and Herzegovina became the most tragic victim.

For Slovenia, independence became inevitability at the end of 1980s and was carried out in the subsequent years without a major armed conflict and with relatively few victims. During that period the intrinsic link between transformation and European future was strengthening on a continuous basis. For Slovenia, membership in the European Union became the most important objective by far, one which overrode all other considerations. This has had a positive and a negative side. The positive side was in the fact that Slovenia took the accession process and accession criteria very seriously and joined the EU in its enlargement of 2004 as the most successful and best prepared new member of the EU. Slovenia was, at that time, hailed as the success story of EU enlargement and gained a great deal in its international prestige. In 2007 Slovenia became a member of the Euro group, the first among the former socialist countries. This was seen as an important success and a confirmation of the healthy and resilient Slovene economy. There was no mourning in Slovenia for the earlier national currency, the Tolar, which had served the country and its people well since independence. Slovenia perceived itself as fully integrated in the mainstream of the EU.

But there was also a much less positive aspect of making the EU membership the priority of overwhelming importance for the country. While concentrating on the EU membership, Slovenia delayed some of the tasks related to the changes in economic structure, in technological development and in the organization of the labour market. Complacency has set in and, as we know, complacency in politics is a dangerous travel companion, in particular at a time of an unfinished process of transition.

Furthermore, at the time of preparation for membership (the time of "filling the application forms", as some astute commentators in Slovenia ironically observed) a dangerous illusion had developed: It was believed that the country could rely on the EU policies and regulation in the process of the future transition. The responsibility of the leading political forces of Slovenia to design a proper vision and developmental objectives for the country (for example in the areas of science, technology and technological modernization of industries as well as in the area of foreign investment) was underestimated. The country's economic structures have not developed in an optimal way.

Later on, at the time when cheap money was available in the international financial markets (2005 - 2008) many companies took loans for expansion of their operations, including for projects such as risky real estate deals and managers' takeovers. The influx of foreign investment, especially green field investment to Slovenia remained inadequate owing to administrative limitations and inadequate bureaucratic practices.

All these features shaped the economic landscape of the country and have become an important part of the reasons why Slovenia was not well prepared for the financial crisis and economic troubles which have engulfed the EU since 2008. They also provide a large part of the explanation why the recent search for solutions has been so time consuming and politically complicated. These days Slovenia is in the process of developing a comprehensive national program of reforms and a stabilization program. Both of them will be considered within the EU procedures by the end of May 2013. Cleaning the banking sector which is burdened with non-performing loans is an important priority. Consolidation of public finance is an immediate task. Negotiations with the unions of the public sector, traditionally very powerful in Slovenia, are progressing with, as it looks at present, promising results in the area of reductions of salaries and other entitlements. The Government has also started to address the difficulties of some of the companies affected by the crisis with a view to preserving jobs and stimulate growth.

What are the lessons learned and what could be useful to know for the current and future candidates for the EU Membership?

The most important lesson which candidates for the EU membership have to keep in mind is that the level of responsibility of the candidate country's government for its policies and for development of the country remains undiminished throughout the process of accession and after. In fact, it actually increases while the tasks at hand are gradually becoming more complex. The government must be able to devise sophisticated policies in the areas of infrastructure, environmental protection, foreign investment, technological development and in the systems of education and health care. The requirement of the rule of law becomes more demanding and more central in this process of transition. Social care and pension reform have to be modernized. All this makes the work of the government more demanding. The government must be able to define its own goals and follow them vigorously.

These demanding tasks require constant improvement of public administration in the candidate country and an improved quality of decision making at all levels of government. The question of financial resources from the EU cohesion funds requires that the applicants must develop the relevant know-how in dealing with the bureaucratic procedures of the EU and provide the appropriate shares of local financial sources so as to make the projects possible. It is also important to plan the entire economic and social development in a new, much more sophisticated way. The EU co - financed projects must make sense in the context of development of the member state and its regional and local communities. National planning is vital.

Experience in these matters provides the answer to the question how does EU membership relate to transition. While the EU determines the framework and the key objectives, the quality of transition and its adequacy to the needs of the people concerned critically depend on the levels of responsibility and sophistication of the government and other actors of the new EU member state. To put this in the simplest form: EU is an important opportunity. However, the answer to the question of how this opportunity will be used depends on the candidate country and, later, on the policy making of the new member state.

All these experiences are relevant to the successor states of former Yugoslavia. Slovenia became a EU member in 2004. Croatia will follow in a few weeks time, on 1 July 2013. Others will join at their own pace, depending on their ability to fulfill the membership criteria and the willingness to make the EU membership the highest priority of the country.

There are certain things which should be beyond doubt. Orientation towards EU membership is a natural choice for countries of former Yugoslavia, including Bosnia and Herzegovina. For them, the EU is their "natural habitat" - in terms of geography, history, economy and politics. At the same time, the EU understands that the area of former Yugoslavia must not become "a black hole" in the area of European integration. Efforts must be made from both directions: from the countries of former Yugoslavia towards Brussels and vice versa.

An additional element has to be stressed in this context, in particular as we meet in Sarajevo, the capital of Bosnia and Herzegovina. The European Union is interested in Bosnia and Herzegovina for various reasons, including a particular reason related to the historic need of Europe to better integrate Islam. So far the EU, and Europe more generally, have not been very successful in this regard. Former Yugoslavia was, in its own historic period, an example of relatively successful integration of various cultures and religions. The disintegration of Yugoslavia was not caused by its diversity but rather by the aggressive nationalist exclusivity and unwise politics. There is no real reason why the EU could not be "a successor" to former Yugoslavia in the historic effort to integrate, through Bosnia and Herzegovina, the local Islam into the European mainstream. (Other speakers will address the question of membership of Turkey in the EU).

As the immediate task, however, it is important to ask the question of how should the current and future candidate countries take advantage of the experience gained by the new members of the EU. The immediate task is relatively clear: They should study the conditions for accession, the famous "Acquis communautaire" in the effort to fulfill the formal accession criteria. But more important, they should carefully examine the experience of new member states of the EU in practice and incorporate the findings of that examination early and in a creative manner. The experience of Slovenia, in all its aspects, is certainly worth studying.