SLOVENIA AND THE EUROPEAN UNION
Committee for Foreign Policy, Security and Defence of the European Parliament
Address by the President of the Republic of Slovenia, Milan Kucan

Brussels (Belgium), 29 November 1995

"Slovenia sees its future within the EU as a full member. There are strong reasons for this position, based on historical ties with the economic and cultural space of the European Union and the level of cooperation with its member states. Slovenia is economically tied to the countries of the Union more than any of the other Central and East European countries. Over two-thirds of its foreign trade is carried out with the EU. Most of the technology used by our industry originates there. We have the most highly developed cultural, scientific, technological and ecological cooperation with the EU countries. It is partly thanks to the advanced degree of economic cooperation with the countries of the European Union that Slovenia has managed to achieve its relatively high level of development. Today it has a higher per capita gross domestic product than the countries of Central and Eastern Europe and, indeed, two of the member states of the EU. And it also meets two of the convergence criteria for European monetary union."

Thank you for extending me the honour of allowing me to speak to you on issues concerning the future of European cooperation and on why Slovenia is applying for membership of the European Union.

Slovenia is now enjoying all the benefits of peace. But we live at the edge of the Balkans, where for four years a terrible war has raged before the eyes of all of Europe and the world, a war that represents a defeat for all of us. Therefore, we want to believe that the current fragile guarantees of peace will prove sufficient and that it will be possible to start, patiently, to overcome the deep material, spiritual, mental and civilisational consequences of this senseless war. We want also to believe that the tragedy of this war has challenged the European consciousness. For it is a paradox at the end of this millennium and despite the tragic experience of two world wars, our civilisational awareness and the consolidation of moral principles in relations between peoples and nations, that humanity has been unable to prevent this most brutal atavism in the name of "blood and land", in the name of establishing a nation state, its ethnic purity and its territorial expansion into the territories of other states and nations in violation of their sovereignty.

We cannot allow history to repeat itself again in Europe, for Europe once more to succumb to the logic of war and to the mistaken belief that peace can be bought. We cannot betray the principles that it has patiently established, the principles of learning the lessons of history to create a future at peace. Yet the world, and Europe especially, has changed over the last 50 years.

For 50 years Europe reconciled itself to the fact of its political partition. For 50 years it lived in fear of the danger posed by the other side. The division was unnatural, forced, which is precisely why it had to be overcome. Now Europe finally has the chance to stop living "against" and to start living "for". Confrontation and conflict can be transformed into cooperation and integration. An open Europe without curtains or walls is a great political challenge and a huge opportunity. We must not let it slip through our grasp. We can build a continent of free and peaceful cooperation, which will serve the well-being and dignity of all European people. The processes of integration weave their way across state borders. Neither self-satisfied, splendid isolation nor forcible exclusion are possible any longer within Europe. We are dependent upon one another, and on a common dialogue. Slovenia did not set out on the challenging road to independence in order to isolate itself in autarchy, but with the resolute determination to guarantee its existence, security and development within the new Europe free of walls and divisions.

But the consequences of these long years of division are with us. Not merely in the sphere of real relations, but primarily in the consciousness of the European people and also in the consciousness of European politics. Even on this level it is clear that the Berlin Wall collapsed both Eastwards, and Westwards. It has left its traces everywhere, demanding that Europe now begin to think of itself as a whole, as an integral unit, and no longer in categories of division and differentiation.

The state of the real world, the reality of the division into highly developed and less developed parts of Europe, into a secure and stable part and an unstable part, dictates a parallel state of mind. But the division that can be overcome if we so wish is the division of Europe into members of the European Union and those separated from this the only European integration without a clear reply as to when and if the doors will be opened to them. This division reveals in the most sensitive manner whether there exists the will to rebuild Europe, for it to become a factor of stability and cooperation, friendly to all its nations and states, and it is therefore of decisive importance. Within the EU, dialogue is not being conducted merely over its own future. Dialogue is also being conducted on the future of Europe, on the vital issues concerning all Europeans. Exclusion from the EU means exclusion from this dialogue. It means a rejection of the possibility for each nation to play their part independently and, at the same time, together with others in shaping their own and the common European future.

It is abundantly clear that there are not many answers when it comes to Europe's future. To see this, we need only look at the questions concerning the future of the EU as the nucleus of the new Europe. The questions of whether it should urgently and gradually expand, what the nature of the internal relations should be and how big it can be. In essence this is a questioning of Europe, of where its borders lie, where the EU wants to draw them.

It is easier to come up with answers by first establishing what the EU does not want to be. Within the EU this has already been answered. It does not want to be just a common European market or merely a free-trade area. It wants much deeper relations; this is the clear message of Maastricht. And it wants a deepening of relations in order to expand as well. But it will not risk disintegration for the sake of expansion. It will not reduce the level of integration already achieved, neither will it abandon the idea of growing into a political union.

The fact is that the countries which are members of the EU have been carefully and gradually building up to the current level and quality of relations over a period of almost 50 years. Their voluntary cohesion was partly a consequence of the forced cohesion of the Warsaw Pact and Comecon. At the same time this has led to a situation where today the countries that lived within this framework are not immediately capable of participating in the established quality of relations within the EU, due to the development gap and having been cut off from the European civilisational tradition and its tradition of values. If this were to be ignored, we could damage the sensitive web of relations from which the substance of the Union is woven. But this does not mean that the EU can allow itself, nor indeed is it able, to close up. It is talking merely of gradualness, of the need to adapt; because despite this state of affairs, its prospective expansion is urgent, as is the expansion of its influence and spirit; both in its own interest as well as in the interest of the whole of Europe. I see no alternative to this direction. And I do not believe that anyone else seriously sees an alternative either. In any case it would be contrary to the principles of the Helsinki Final Act and would take us back to the times when European order was determined not by the logic of cohabitation but was compelled by the balance of power. This will certainly be one of the issues raised, on the basis of the Maastricht and Copenhagen resolutions, at next year's Inter-Governmental Conference.

I firmly believe that Europe is not condemned to confrontation and division. Quite the opposite; it is condemned to cooperate. It is highly short-sided and without the support of history to believe that on our continent it is possible to ensure peace, human dignity and prosperity at one end while all this is missing at the other end; if there are war and poverty there, if human rights and dignity are being trampled on.

Europe has always sought new balances in the ruins of the old. These new balances have essentially involved the establishing of a balance of powers imposed by the stronger; as a rule, the victors prevailing over the vanquished. Centuries of war in Europe are in essence processes of establishing a balance, which has held until each time the historical circumstances have changed, and peace and the existence of each separately and all together have once again come under threat. The history of Europe and of its wars has been the history of the tragic attempts to unify it. Now it has an alternative.

The standards for acceptance into the European Union are now far more demanding because the level of integration within the Union is greater. This integration requires the voluntary relinquishing of a part of the sovereignty of the member states. That is the price to be paid for entry. But this price is less than the price of isolation, or the price of remaining outside the Union. In my judgment it is no longer primarily a question of whether Europe will integrate, but of how it will go about doing so: by recognising the equality of those states entering into this integration, or by ranking them. The latter would signify the existence of more than one Europe.

Taking into account the common European experience, the countries of the EU will independently assert their own interests with respect to the acceptance of new states; I believe this will be done on a foundation of criteria that are known in advance and equal for all. Slovenia expects that such a position will eventually be established with respect to its request for associate and later full membership of the EU. We would perceive any decision entailing the doors to the Union remaining closed to us as a historical injustice.

The Republic of Slovenia has been affected by unequal treatment several times already. There is no basis for this: neither in the results which Slovenia has achieved in its challenging political and economic transition, nor in the manner in which it exercised its right of self-determination, where it did not infringe the same right of any other nation or state, nor in the fact that Slovenia is already an active member of the United Nations, the Organisation for Security and Cooperation in Europe, Council of Europe and a signatory of the Partnership for Peace within NATO. This behaviour is an example of the use of double standards contrary to the proclaimed principles and aims of the EU, and, I firmly believe, contrary to the long-term interests of European cooperation and security and the interests of the EU members themselves. It calls into question the principles proclaimed at the signing of the Treaty of Rome and confirmed in numerous subsequent declarations and other EU documents. It raises doubt over the declared image of a Europe that should be built on the principles of equality, equal rights, solidarity and justice.

Slovenia does not agree with a policy of extorting one-sided advantages and resuscitating the spirit of the past and in equality under the pretence of remedying the so called historical injustices. Not merely for its own sake, but also in the interests of the common European future. The idea that the troubles Slovenia is experiencing in its relations with Italy - the obstacle on Slovenia's road to the EU - are merely a small, bilateral problem involving a "lack of goodwill by Slovenia" and certain property that used to belong to the Italian citizens who opted to leave for Italy on the basis of the 1954 London Memorandum, is untrue. Statements made by a range of influential individuals as well as certain official demands and the actions of our neighbour demonstrate that an attempt is being made to revise the outcome of the Second World War. How else is it possible to understand the calling into question of the Osimo accords which regulate the border, property, minority and all other issues between Slovenia and Italy, and which have the nature of a peace treaty, on the pretext that they were signed in 1975 with a state that was totalitarian? Are agreements signed with the Soviet Union, Poland, Czechoslovakia, etc. therefore no longer legally valid? If any country considers that now, in the new historical circumstances, it is stronger and can therefore exact different agreements, from which it would derive more than it had under the previous ones, then it is the beginning of the destabilisation of Europe. All those who felt wronged or insufficiently compensated by postwar agreements could start making claims. As if the war had never ended.

I would ask whether it is really in the interest of the European Union for any country to flex its muscles and demonstrate its influence within the Union by blocking the membership of Slovenia - or anyone else - and to set as a condition the prior settlement of points of dispute in bilateral relations. This could mean that in the name of solidarity the European Union would accept the legitimacy of extorting one-sided advantages and that solidarity within the European Union is being built on this basis. This method could signify in advance an end to thoughts of expanding the Union.

The signing of a Europe Agreement is the most important but not the only issue where this stance has played a decisive role. Slovenia was not included among the "most concerned countries" of the Pact on Stability, although in terms of its level of institutional relations it was in the same position as the Baltic States, which were included. Similarly, the preaccession strategy programme was closed to Slovenia.

Slovenia draws a distinction between negotiations on the fulfilment of conditions for cooperation with and membership of the Union, which should be the same for all, and the settling of bilateral issues. As far as relations with Italy are concerned, these bilateral issues have already been settled in a formal legal sense by valid bilateral agreements. Italy recognised Slovenia as the successor to these agreements in 1992. These agreements are the foundation for settling any outstanding questions. But this must be done in a dialogue based on the principles of equality, respect for one another, justice and mutual benefit. This, after all, applies to all agreements. Respect for these principles is a condition for stability in Europe.

Everyone recognises that the development and other achievements of Slovenia demonstrate that it meets the conditions for closer integration in the European Union. We are completing the overall institutional adaptation of our political system to the European standards of multiparty parliamentary democracy, the safeguarding of human rights and in particular the high degree of protection of all the rights of ethnic minorities. The process of property reform is in the concluding phase. Economic indicators are good.*

I want to emphasise that Slovenia sees its future within the EU as a full member. There are strong reasons for this position, based on historical ties with the economic and cultural space of the European Union and the level of cooperation with its member states. Slovenia is economically tied to the countries of the Union more than any of the other Central and East European countries. Over two-thirds of its foreign trade is carried out with the EU. Most of the technology used by our industry originates there. We have the most highly developed cultural, scientific, technological and ecological cooperation with the EU countries. It is partly thanks to the advanced degree of economic cooperation with the countries of the European Union that Slovenia has managed to achieve its relatively high level of development. Today it has a higher per capita gross domestic product than the countries of Central and Eastern Europe and, indeed, two of the member states of the EU. And it also meets two of the convergence criteria for European monetary union.

It is a fact that Slovenia meets all the conditions ensuing from the mandate for negotiations and the declaration of the Council of Ministers adopted together with the mandate. In spite of this the Council of Ministers, to this day, has yet to adopt a resolution on the signing of an agreement with Slovenia. In the Cannes Document a new demand for the harmonisation of its legislation is even set before Slovenia: that it should liberalise its market in immovable property for citizens of the European Union; a demand that has not been made of any of the current associate members and which - with the exception of Estonia - none of them fulfil.

Slovenia is aware that it will need to rescind its existing constitutional restriction concerning the rights of foreigners to own immovable property. The Slovene government therefore undertook to propose a constitutional amendment to a parliament to this end before signing the Europe Agreement: this it has done. Of course it is incomprehensible that it would have done this without assurances that the Europe Agreement would be signed. The signing of the Europe Agreement would accelerate the process of harmonizing Slovenia's legislation, which would also create better conditions for settling bilateral questions with Italy. For I strongly believe that unimpeded strengthening of the cooperation between Slovenia and the European integrations would also be in the interest of Italy, its economy and its citizens.

Slovenia sees its position and its opportunities in European integration processes. It is my belief that only a nationally recognisable but open state founded on the principle of equal rights for all citizens, irrespective of their national origin, race, religion or political beliefs, can have a future within these processes. Only such "civil" states are capable of linking together with others on the basis of equal rights into a European and from there a common community of mankind, which in spite of everything is emerging as a reality.

I would like to stress here that it is in the negation of these principles that lies the real reason behind the Yugoslav crisis. Multinational communities, of which Yugoslavia was an example, can survive only if they are constructed on the principle of the equality of the interests of all members of the community, if common rules of behaviour are drawn up and legislative, constitutional and institutional mechanisms devised that enable the harmonisation of the various interests for the benefit of all. Furthermore, even if these mechanisms function perfectly, the community can survive only if it is founded on a recognisable unifying idea, on values which give meaning to the community and function as the basic integrational tissue and lever. If this is lacking, or when it is lost, no matter how perfect the mechanisms the community cannot be preserved. European integration, too, at some point in its development, will have to establish an idea of identity, a system of values that will strengthen its cohesion. The greater the degree of integration among the countries of the Union, and hence the relinquishing of a share of individual sovereignty, the stronger will have to be the idea of value, which will enable the emotional identification of Europeans with it and convince them of the logic in taking such a big step. This can only be based on the values forged by European civilisation throughout its long development and which are its moral foundation and the basis for a modern democracy, the rule of law and civil society.

We Slovenes live in a Central Europe that has been and continues to be an intersection for many economic and political interests and civilisational influences, and a meeting point of European spiritual currents. Many European conflicts have been conceived or concluded here. We Slovenes have been unable to hide from anything that has occurred here. Everything that has concerned Europe has directly concerned all of us. Hence our belief in the solid and fated integration of Europe and our sense of responsibility for what happens in Europe. We believe that together with the other Central European nations and states we can consolidate within the European Union those values - pluralism, dialogue, tolerance and consensus - that throughout history have been shaped among us by the fact that this small area is home to great diversity.

Mr. President, Members of Parliament,
In its integration process Europe has already demonstrated on many occasions an inventiveness and an ability to creatively seek out solutions acceptable to all. In essence, even in the past the dilemmas that confronted the EU were no less significant than those that confront it and its institutions today as it prepares for the Inter-Governmental Conference. I am convinced that in the search for solutions the political will of the member states to adapt the Union to current needs and to prepare it for the coming development stage and expansion will prevail.

The maturing of our cooperation with the EU requires time and understanding, on both sides, of our mutual interests and benefits. In no way do we see these relations as a unilateral benefit for us. The realisation of our common interests presupposes no small measure of obligations, which we are prepared to take on and fulfil. The real possibilities of integration in Europe and all the dilemmas it poses are a challenge to us, a motivation for more rapid internal economic and political development. We cannot expect Europe to wait for us to solve our problems. And that is not what we want either. What we do expect is a proper understanding of our position, which is unique, as the position of every European country is unique and hard to compare with others.


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• Economic indicators of Slovenia

All the economic indicators need to be understood in the light of the fact that Slovenia is a small country with just two million inhabitants sharing an area of a little more than 20,000 km2.

In parallel with the independence process, Slovenia has carried through a wide-ranging economic transformation, constructed a modern, eco-social market economy and integrated into the European economic area. We could say that among the Central European and East European countries in transition, Slovenia is the only example of multiple transition: transition to a sovereign state; transition to monetary independence; transition from an administrative to a market economy; transition from a federal and so-called East Bloc market to the internationally competitive market.

For the Slovene population and for business, too, the start of the transition was harsh: we were confronted with the loss of markets in some of the other former Yugoslav republics, negative economic growth, rising unemployment, inflation and uncertainty. But through great effort, with the proverbial Slovene perseverance, persistence and great professionalism on the part of individual institutes, companies and people, Slovenia can today boast encouraging results.

• Compared with the countries of the Visegrad Group, the Baltic States and the countries of the Commonwealth of Independent States, Slovenia has by far the highest gross domestic product per capita (US$ 7,000; US$ 9,000 by purchasing power parity) and a very high value of exports per capita - US$ 3,500.

• Among 187 countries on the Euromoney country-risk scale, Slovenia comes in 50th position;

• Slovenia has signed free-trade agreements with all the members of the Visegrad Group (the agreement with Poland comes into force on 1 January 1996), and preparations are underway for the same agreements to be signed with the Baltic States; an agreement was signed with Cefta on 25 November for Slovenia to become a full member on 1 January 1996; Slovenia has a free-trade agreement with the member states of Efta; it has initialled an agreement with the EU on associate membership, otherwise cooperation is proceeding on the basis of a cooperation agreement; Slovenia is also a full member of the World Trade Organisation.

• Slovenia exports more than 60% of its gross domestic product, of which 70% goes to countries in the EU.

• On 1 September 1995 the Slovene tolar became externally convertible; foreign exchange reserves (totalling some 3 billion dollars) are sufficient to finance four months worth of imports; the favourable macroeconomic trends are continuing: annual inflation of no more than 10% and a high rate of economic growth - expected to be around 5%; with continued favourable macroeconomic trends, by the year 2000 Slovenia would fulfil all five of the Maastricht convergence criteria (the two fiscal criteria are already met). Slovenia's 1996 budget has a planned surplus; the country's total public debt amounts to 30% of GDP.

• Slovenia's private business sector is taking shape along two lines: with the privatisation of the existing socially-owned companies (before or after their rehabilitation), and with the emergence of a new private sector, in which the rapidly growing private companies are especially important. Already 90% of all companies are in private hands.

• The period from 1990 to 1995 has seen great changes not only in the size structure of companies but also in the sectoral structure of added value or gross domestic product: the share of industry and construction has fallen from 41.8% to 38.8%, while the share of services has risen from 53% to 56.4%.

• The volume of foreign direct investment in Slovenia is increasing; 73% of invested foreign capital comes from the EU, which is understandable given Slovenia's foreign trade structure. As far as legislation in the area of foreign investment is concerned, foreign investors receive national treatment. Foreign investors may freely transfer profits and may freely repatriate invested capital.