SLOVENIA - COUNTRY PROFILE

ECONOMY

Lying at a junction of natural trading routes, Slovenia is sometimes also referred to as the revolving door of Europe. It has been a crossroads, a huge gateway, dating back from when the Romans occupied this region. In the last decade and a half, Slovenia has raised itself from anonymity to become one of the top countries among the EU Member States. It is proud of its rich industrial history, traditional openness to the world, rational economic policies, and enviable economic development. As a member of the European Union, Slovenia primarily has trade links with Western Europe. It is known as a small, but reliable partner, with a rational way of doing things, and a highly educated labour force. Moreover, Slovenes are very proud to be known as a very hard-working nation.

Since its independence in 1991, Slovenia’s economic development has been very successful, making it a country that has prospered after its transition. Especially during the period of 1995–2005, economic growth in Slovenia was stable, reaching an average of about 4%. The Slovenian economy is open, and levels of internationalisation, measured by the average share of exports and imports in gross domestic product (GDP), increased from 51% to 65% from 1995 to 2005. Economic growth was further enhanced by an increase in consumer spending and investments, which peaked in 1999. Higher economic growth, compared to the EU average, has enabled a gradual decrease in Slovenia’s development lag. Thus in 2005, Slovenia reached 82% of the average GDP per capita in the EU, in terms of purchasing power, which corresponds to an increase of 14 percentage points over 1995. This placed Slovenia in 16th place in the EU.

Following economic growth, there was also an increase in employment, which has exceeded the European average since 2004 (in 2005, employment in Slovenia was 66%, as opposed to 63.8% in the EU). Compared to the EU average, Slovenia also has a considerably high employment rate for women (61.3% in 2005). The employment of older workers remains low (30.5% in 2005), but the situation is improving. For several years, unemployment has been slightly lower than the EU average (in 2005, 6.5% in Slovenia, as opposed to 8.8% in the EU). Long-term unemployment is also lower than the EU average (in 2005, 3.1% in Slovenia and 3.9% in the EU). The wages policy ensures a sound increase in wages in relation to growth in labour productivity. According to the Statistical Office of the Republic of Slovenia, the average monthly net wage in December 2006 was EUR 818.94.

Slovenia in Eurozone

Slovenia in Eurozone - source

On 1 January 2007, Slovenia became the first, and so far the only, of the 10 new EU Member States which joined the European Union on 1 May 2004 to adopt the euro. The European Commission and the European Central Bank made favourable assessments of Slovenia’s readiness for the introduction of the common European currency, following a recommendation for Slovenia’s inclusion in the EMU. Based on the assessment in convergence reports that Slovenia met the Maastricht criteria, the political decision for Slovenia’s entry to the Eurozone was made at a European Council meeting in June 2006, while the formal decision, including the fixed and irrevocable tolar to euro conversion rate (at 239.64 tolars for 1 euro), came at the July 2006 Council of the EU of finance ministers of the Eurozone and Slovenia.

HISTORY

It was on 25 June 1991 that Slovenia declared independence from Yugoslavia. On a clear summer night the Slovenian parliament adopted a new Constitution on the basis of the 88.2% plebiscite vote. Although we can not really brag about the length of our country`s history, much has happened during the years of independence, and even more in the last 15 centuries. The history of the Slovenian nation is stirring and often steeped in tremendous pride.

Slovenian history started when our Slavic ancestors came from behind the Carpathian Mountains and proclaimed the principality of Carantania in the 7th century. Historians believe it was one of the most democratic and modern states at that point in history. So it is of no surprise that even Thomas Jefferson looked to the example of Carantania when developing the democratic foundation for the United States of America.

By the end of the 8th century, Carantania had become part of the Frankish Empire; the Slovenes had converted to Christianity and gradually lost their independence. Such was the destiny of the nation until the 14th century, when most of the territory of Slovenia was taken over by the powerful Habsburg dynasty. Their Slovenian competitors were the Counts of Cilli, a large and politically important family. They died out in 1456 and their numerous large estates became the property of the Habsburgs, who retained control into the 20th century.

Important Slovenian Milestones

250,000 BCE: The first evidence of human habitation on the territory of present-day Slovenia (two implements made of stone from Jama Cave in Loza Woods near Orehek)

120,000 to 1,300 BCE: Remains from the early Stone Age - the Palaeolithic; among them the oldest musical instrument in the world, found in Slovenia; evidence of hunting and Urnfield culture.

4th and 3rd century BCE: The arrival of Celts; the Noricum Kingdom

Around 10 BCE: The Roman Empire; the appearance of the first towns

5th and 6th century CE: Invasions by the Huns and Germanic tribes

After 568: Dominance of Slavic people on the territory of Slovenia

7th to 11th century: The Duchy of Carantania, the oldest known independent

Slavonic tribal union in this region

8th century: The beginnings of the conversion to Christianity

9th century: The spread of the Frankish feudal system; the Slovenian nation begins to form

10th century: The appearance of the Freising Manuscripts, the earliest known text

written in Slovenian

Freising Manuscripts

Freising Manuscripts - source

11th century: The regions of Carniola, Styria, Carinthia and Gorizia begin to develop; intensive German colonisation

11th to 14th centuries: The development of medieval towns in Slovenia

14th to 15th centuries: Most of the territory of Slovenia, including all its hereditary estates, is taken over by the Habsburgs; in 1456, the Counts of Cilli die out, the last feudal dynasty on Slovenian territory

15th century: Turkish invasions begin

15th to 17th centuries: Peasant revolts

1550: Protestantism; the first book in Slovenian

18th century: The Enlightenment and compulsory universal education

1809-1813: Napoleonic occupation – the Illyrian Provinces

1848: Unified Slovenia, the first Slovenian political programme

1918: The defeat of the Austro-Hungarian Empire; the creation of the state of Slovenes, Croats and Serbs; the Kingdom of Serbs, Croats and Slovenes, renamed the Kingdom of Yugoslavia in 1929

1941-1945: The dismemberment of Yugoslavia by the Axis Powers

1945: The formation of the Federal People`s Republic of Yugoslavia, with the People`s Republic of Slovenia as one of its 6 federal entities

1990: Plebiscite on independence

25 June 1991: Declaration of the independent Republic of Slovenia

1 May 2004: EU membership

1 January 2007: Slovenia introduces the euro

Earliest Traces Human Habitation

The oldest proof of human habitation on the territory of Slovenia are two implements made of stone from the Jama cave in the Loza wood near Orehek, which are around 250,000 years old. From the Wurm glacial age, when Neanderthals inhabited the area, the most important find is a flute found in Divje babe, above the Idrija valley. In the late Stone and Bronze Ages, the inhabitants of the area were engaged in livestock rearing and farming. During the transition from the Bronze to the Iron Age, the Urnfield culture existed in this area. Typical of the Hallstatt period were fortified hilltop settlements called gradišče (Most na Soči, Vače, Rifnik, St. Vid near Stična) and beautifully-crafted iron objects and weapons. The ethnicity of the inhabitants of these settlements cannot be determined.

The Celtic Kingdom and the Roman Empire

In the 4th and 3rd centuries, the territory of the present-day Slovenia was occupied by Celtic tribes, which formed the first state called Noricum. The names of many present places (Bohinj, Tuhinj) date from this time, as well as the names of rivers (the Sava, the Savinja, the Drava). Around 10 BCE, Noricum was annexed by the Roman Empire and Roman cities started to appear, among them Emona (Ljubljana), Celeia (Celje) and Poetovia (Ptuj). Well-constructed trade and military roads ran across Slovenian territory from Italy to Pannonia. Under the Roman Empire, the population became Romanised and Christianity began to assert itself.

Slovenia under the Roman Empire

Slovenia under the Roman Empire - source

The First Independent Duchy

In the 5th and 6th centuries, the area was exposed to invasions by the Huns and Germanic tribes during their incursions into Italy. After the departure of the last Germanic tribe - the Langobards - to Italy in 568, Slavs began to dominate the area, but it is not quite clear as to exactly when they first arrived here. After the resistance against the nomadic Asian Avars (from 623 to 626), this Slavonic people united with King Samo’s tribal confederation, which had its centre in the present Czech Republic. The confederation fell apart in 658 and the Slav people in the territory of the present-day Carinthia formed the independent duchy of Carantania, with its centre at Krn Castle, north of Klagenfurt. From this period onwards, until 1414, a special ceremony of the enthronement of princes, conducted in Slovenian, took place.

Under the Franks and Christianity


During the middle of the 8th century, Carantania became a vassal duchy under the rule of the Bavarians, who began to spread Christianity. In 788, Carantanians together with Bavarians came under Frankish rule. At the beginning of the 9th century, the Franks removed the Carantanian princes because of rebellions, replacing them with their own border dukes. The Frankish feudal system started spreading to Slovenian territory. At the end of the 9th century, Magyars invaded the Pannonian Plain. They intruded into Slovenian territory and cut it off from the other western Slavs.

Thus the isolated Slavs of Carantania and of Carniola to the south started developing into an independent nation of Slovenes. After the victory of Emperor Otto I over the Magyars in 955, Slovenian territory became divided into a number of border regions of the Holy Roman Empire, the most important of which, Carantania, was in 976 elevated into the duchy of Great Carantania. The Freising Manuscripts date from this period - a few prayers written in the Slovene language of the time. In the late Middle Ages, the historic states of Štajerska (Styria), Koroška (Carinthia), Kranjska (Carniola), Gorizia, Trieste and Istria were formed from the border regions and included in the medieval German state.

00 Years Under the Habsburgs

In the 14th century, most of the territory of Slovenia was taken over by the Habsburgs. Their powerful competitors were the counts of Celje, a feudal family from this area, who in 1436 acquired the title of state counts. This large dynasty, important on a European political level and who had its land on Slovenian territory, died off in 1456. Their numerous large estates became the property of the Habsburgs, who retained control of the area right up until the beginning of the 20th century. Intensive German colonisation between the 11th and the 15th centuries narrowed Slovenian lands to an area only a little bigger than the present-day Slovenian ethnic territory.

At the end of the Middle Ages, in the 15th and the 16th centuries, life in this area was marked by Turkish incursions. Dissatisfaction with the ineffective feudal defences against the Turks and the introduction of new taxes (particularly a tribute tax) as well as bonded labour, brought about peasant revolts. The biggest revolt in 1515 took place across nearly the whole Slovenian territory. Also from 1572 to 1573, Slovenian and Croatian peasants organised another united revolt. These uprisings, which met with bloody defeats, continued right up until the first half of the 18th century.

A Time of Revival

In the late middle of the 16th century, the Reformation, mainly Lutheranism, spread to Slovenia, helping to create the foundations of the Slovenian literary language. In 1550, Primož Trubar published the first two books in Slovene, Katekizem and Abecednik (The Catechism and Abecedary). The Protestants published over 50 books in Slovene, including the first Slovenian grammar and, in 1584, Dalmatin’s translation of the Bible.

At the beginning of the 17th century, princely absolutism and the Catholic Church suppressed Protestantism, thereby hindering for a long period the development of literature in Slovenian. The Enlightenment in Central Europe, particularly under the Habsburg Empire, was a positive period for the Slovenian people. It accelerated economic development and brought about the appearance of a Slovenian middle class.

The reign of Emperor Joseph II (1765-1790) which saw, among other things, the introduction of compulsory education and primary education conducted in Slovene (1774), together with the first cultural-linguistic activities by Slovenian intellectuals, was a time of Slovenian national revival and the birth of the Slovenian nation in the modern sense of the word.

During the period before the March revolution of 1848, modernisation of villages and the first industrialisation began. The most important Slovenian poet, France Prešeren, made his contribution to overcoming language regionalism: he asserted on the right to a unified written language for all Slovenes and defended it against attempts to merge it with an artificial Illyrian Yugoslav language. The first Slovenian political programme, called `Unified Slovenia’ emerged during the European `Spring of Nations` in March and April of 1848; it demanded that all the areas inhabited by Slovenes should be united into one province called Slovenia. The idea of a unified Slovenia remained the central theme of the national-political efforts of the Slovenian nation within the Habsburg Empire for the next 60 years.

The State of Slovenes, Croats and Serbs

During the First World War, which brought heavy casualties to Slovenia, particularly on the bloody Soča front, and with the imperialistic policies of the superpowers, which threatened to split Slovenian territory among a number of states (the London Pact of 1915), Slovenes tried to arrange a unified common state of Slovenes, Croats and those Serbs living within the Habsburg monarchy.

This demand, known as the May Declaration, was made by the Slovenian, Croatian and Serbian representatives in the Vienna parliament in the spring of 1917. After the defeat of Austria-Hungary in World War I, the danger from Italy, which had occupied Primorska, Istria and some parts of Dalmatia, and the pressures from the Serbs for unification into a common state, compelled the Slovenes, Croats and Serbs on 1 December 1918, to unite with the Kingdom of Serbia into the Kingdom of Serbs, Croats and Slovenes, which was in 1929 renamed the Kingdom of Yugoslavia.

Following a plebiscite in 1920, most of the Slovenian part of Carinthia was annexed to Austria. Thus, a unified Slovenia never became a reality, since the majority of the Slovenian nation lived in Yugoslavia.

The Federal Yugoslavia

During the Second World War, the Kingdom of Yugoslavia disintegrated, and Slovenian territory was divided between Germany, Italy and Hungary. In 1941, the Liberation Front of the Slovenian Nation was founded in Ljubljana and began an armed resistance against the occupying forces. The Communist Party soon took the leading role within the Liberation Front, gradually redirecting the liberation fight into a socialist revolution. After the Second World War, the Federal People’s Republic of Yugoslavia (FPRY) was declared, of which Slovenia was a constituent.

In 1963, the FLRY was renamed the Socialist Federal Republic of Yugoslavia (SFRY) and Slovenia was now called the Socialist Republic of Slovenia. Slovenia’s economy developed rapidly, especially in the 1950s, when it was strongly industrialised. After the economic reform and further economic decentralisation of Yugoslavia in 1965 and 1966, of the six republics, Slovenia was the one most rapidly approaching a market economy. In spite of restrictive economic and social legislation determined mainly by the largest - Serbian - nation, which based its centralist strategy on the less-developed republics, Slovenia managed to preserve a higher level of economic development, had a higher than average skilled workforce and better working discipline and organisation.

The Independent State

After its rapid economic development in 1950s due to industrialisation, Slovenia was fast heading towards a market economy and managed to maintain a high level of economic development. Slovenia’s domestic product was 2.5 times the state average.

The second half of the 1980s proved crucial on the path to independence, particularly the critical writing of intellectuals in the circle of Nova revija magazine. Its 57th issue focused on Slovenia’s independence. In 1988 and 1989 the first political opposition parties emerged, which in the 1989 May Declaration demanded a sovereign state for the Slovenian nation. In April 1990, the first democratic elections in Slovenia took place and were won by DEMOS, the united opposition movement, led by Dr Jože Pučnik.

In the same year more than 88% of the electorate voted for a sovereign and independent Slovenia. The declaration of independence followed on 25 June 1991. The next day, the Yugoslav Army attacked the newly-founded state. After a ten day war, a truce was called, and in October 1991 the last soldiers of the Yugoslav Army left Slovenia.

In December 1991 the independent Republic of Slovenia adopted its constitution, which is based on the rights of free citizens. In its general provisions, the constitution defines Slovenia as a democratic republic governed by the rule of law, and a social state.

The adoption of the constitution formally ended the former communist system. The European Union recognised Slovenia in the middle of January 1992, and the UN accorded it membership in May 1992. To some members of DEMOS and outsiders, this and international recognition provided the basis for the argument that DEMOS had done its job and could be dissolved.

In December 1992, after new elections under a new, more democratic law, the strongest force in the single chamber parliament became the Liberal Democracy of Slovenia (LDS) led by Dr Janez Drnovšek, with 23 per cent of the vote, which balanced the Slovenian political arena by forming a coalition with one left-wing (reformed communists) and one right-wing party (Christian Democrats). With a similar coalition, the LDS was able to govern for twelve years, with only one interruption in the second half of 2000. It managed to establish a liberal political culture by passing numerous fundamental laws, for example with regard to education, and to carry out a social and economic transition into a social market economy with private initiative. In 2004 Slovenia joined the EU, with considerable popular support, and NATO (common objectives of both the ruling coalition and the opposition).

At the parliamentary elections in the autumn of 2004, the Slovenian Democratic Party won and formed a centre-right government, headed by the leader of the Slovenian Democratic Party, Janez Janša, with the Christian Democrats, the Slovenian People’s Party, and the Democratic Party of Pensioners of Slovenia as coalition partners. The government is continuing a successful economic policy, with 5 per cent economic growth and reforms of the tax and salary systems. It succeeded in meeting the Maastricht criteria, and Slovenia joined the Eurozone (the first transition country to do so) on 1 January 2007.