Criticism from Brussels

In Slovenia, the debate launched by European Commission's recent criticism of Slovenia is continuing, and all on account of its delay in accepting the European legislation and overcoming numerous problems inherited from the period after the disintegration of the former SFRY.

AIM Ljubljana, December 16, 1998

Over a decade ago Slovenian politicians and businessmen filled every day two JAT and two Adria Airway flights (on average) to Belgrade. There are no such flights today, but instead there are flights for Brussels which are being increasingly by the day. That is precisely why Ljubljana took to heart the criticism from the headquarters of the competent European Commission addressed to the top Slovenian political leadership; the mentioned Commission was entrusted with the task of verifying whether the associated members of the European Union have adjusted their legislation to the European; the results were disastrous, especially as the two most promising potential new Union members - Slovenia and the Czech Republic did not pass the test.

Numerous objections on Slovenia's account came to the surface. The European Commissioner, Van den Broek, concluded, inter alia, that Slovenia was behind the schedule with the introduction of the value added tax; and not only that - Slovenia would be the last state from the first group of candidates for full membership, which has exceeded the deadline and would introduce the value added tax only as of January next year. The delay in the settlement of territorial dispute between Slovenia and Croatia was also negatively assessed. It is a fact that one day the Slovenian borders will represent the outer border of the Union which is sufficient reason for Brussels to impatiently wait for Ljubljana's effective moves. It is no wonder that Ljubljana feels that it has been driven into a corner: "If clearly defined borders are a precondition for Slovenia to join the EU, then Slovenia might become Croatia's captive, i.e. hostage, as the latter could stall the signing of agreement in a number of ways" thinks the daily "Delo". To make things worse, Slovenia was also reprimanded for putting off the public administration reform, slow work of the judiciary as well as outstanding debts of the Slovenian state banks to holders of saving deposits from other former Yugoslav republics.

The Commission negatively assessed Slovenia's efforts at harmonizing its legislation with the European laws because in Slovenia each law has to be read three times in Parliament before it can be put to a vote. At the moment some 70 laws concerning the acceptance of the European legislation are waiting in Slovenian state agencies to be put through the regular procedure. The adoption of each individual act is a painstaking and very long process; for example, a month ago the Government's Office for European Issues proposed a summary procedure for the adoption of twelve new "European" laws to Drnovsek's Cabinet. However, until now, the Government has decided to adopt only three after which all efforts at securing expediency were annulled by Parliament which put this item on the agenda of the next session, when the Slovenian budget is also scheduled for discussion. The impatience of the Brussels administration is quite understandable since the laws in question are: The Law on Real Estate Property Rights for Foreign Persons, the Law on Environmental Protection and the Law on the Protection of Cultural Heritage. Common denominator of all three laws are restrictions by which the state is, in a roundabout way, trying to protect as much of the Slovenian real estate as possible - both in border areas, as well as in culturally and ecologically important areas.

For strict "verificators" from the European Union, who assess only the adopted laws, and not those "stuck" in the procedure, the mentioned manoeuvre is far from the desired one. Therefore the Commission, which is the most important expert body of the European Union, assessed that, in contrast to the Czech Republic which has come closer to accepting the Union rules, Slovenia "did not make any progress".

Naturally, the hardest problem is how to circumvent the agreement according to which foreign persons, nationals of the European Union, would be allowed to buy real estate in Slovenia, how to avoid the closing down of duty-free shops on the Austrian and Italian border, but also how to overcome inadequate regulation of the national real estate market and excessive state intervention, i.e. subsidies in the enterprise sector. The Commission of the European Union assessed that an intolerable omission, which dates back to the times of the disintegration of former SFRY, lay in the fact that Slovenia was tolerating an enormous backlog in resolving the status of some ten thousand stateless foreigners, as well as the unresolved status of some 7 thousand Romanies. Drnovsek tried to lay the blame for this on the opposition, although Igor Bacvar, Minister for European Issues, also Drnovsek's party friend, admitted that criticism was largely justified.

Slovenia was given one year to eliminate the main shortcomings: the Government announced radical changes - starting from the Parliament's Rules of Procedure which would enable quicker adoption of new laws. However, some commentators appealed to the national pride and conscience claiming that other, partial interests were behind European criticism. Slovenia was, among other things, criticised for its slow introduction of the rules on Internet use over cable system which is regulated by the law only in Belgium! Similar is the case with duty-free shops. According to Union general rules, no associated member is obliged to close down its duty-free shops until it becomes a full member, with the exception of Slovenia, and all that because of pressures exerted by Austria. What is more, even the Union is inconsistent in this regard.

Duty-free shops at road border crossings with the neighbouring countries are still under the Greek management, although it is a EU member. The problem lies in the fact that while negotiating its associate membership Slovenia unilaterally undertook to close down its duty-free shops by July 1, this year. A special, additional effort was made in the direction promoted by Europe (i.e. Vienna) when the Slovenian Parliamentarians rejected the amendment which would allow the exemption of the Slovenian duty-free shops from the excise tax system (special taxes), introduced with the new value added tax. That would make Slovenia's duty-free shops less competitive than West European ones.

Naturally, this irritates many Slovenians. Thus, Bogomir Kovac, an economist, warns: "It is not irrelevant whether we shall close down our duty-free shops in 2002 or, which is more probable, in 2007. The difference is not negligible and we can calculate very precisely the damage we will pay as a society if we agree to close down these shops too soon. Simple calculation will give us the figure of almost DEM 2 billion worth turnover. With such imprudent and servile concept of getting closer to the Union we shall waive some empirical economic advantages for the sake of political illusions about our quicker integration with the European Union. Integration into the European Union must be our priority task, but at the same time we have to protect our own economic interests and remain standing on our own feet. I fear that during our negotiations on joining the European Union, we shall put at stake great important economic potential because of detrimental agreements between Ljubljana and Brussels" emphasizes the economist Bogomir Kovac.

Kovac believes that the problem lies in the politicians who by their activities can increase their own personal wealth for which the entire society will have to pay. "A politician X, who participates in negotiations on our integration with the European Union will accept a compromise for personal reasons, so that he can join the Brussels bureaucracy...When we propose the establishment of links with Internet, we see that the Parliament shows no interest. As a system of communication, Internet is not popular in politics since its low costs bring no profit. The problem of political corruption warns us that we have to devote particular attention to negotiating guidelines for the Slovenian delegation to Brussels. This is particularly true when it comes to the readiness of our negotiators to forgo major economic potentials of Slovenia", warns a Professor of the Ljubljana Economic Faculty, Bogomir Kovac. Despite Kovac's sharpness, it seems that the Slovenian elite does not care for criticism of their subjects; for official Ljubljana the Brussels bureaucracy is a dream come true and dreams are sometimes worth a sacrifice. Especially if that sacrifice comes out of taxpayers' pockets.

Igor Mekina

(AIM Ljubljana)