Slovenia and the EU: The First Shall Be Last

Slovenia and the EU: The First Shall Be Last

Slovenia has always been a front-runner to enter
the EU. But in the race for EU money, the last shall be first–and
the Slovenian government is beginning to ask how worthwhile
membership actually is.

This is likely to be an autumn of excitement in
Slovenian politics. In November, the country will choose a new
president, and in the same month could also close talks with the
European Union and gain entry to NATO. But in a country whose
political stability and comparative prosperity have made it a prime
candidate for early entrance to the rich nations’ club, the EU
debate has begun to take on a more skeptical note.

Slovenian anti-globalization activists have
turned the debate on NATO mainly into an ideological battleground
by portraying the military alliance as one of the ugly faces of
globalization. When it comes to the EU, however, the concerns are
much more practical. And the loudest expressions of concern are
coming from an unlikely source: the government, until this year a
headstrong EU supporter. The multibillion-euro question being asked
is: Is it really worth it?

IS IT REALLY WORTH IT?

Not so long ago, the answer to this question
would have been a self-evident “yes,” with the Slovenian government
banking on post-accession EU aid to the tune of 3 percent of the
country’s GDP and basing its development program for the European
Commission (EC) on this figure. The water was muddied this January,
however, when the EC lowered its estimates of how much aid the 10
candidate countries can expect after they enter the union, probably
in 2004. The revised proposals confirmed that, in the queue for
structural funds, the poorest regions in the new member states
would stand well behind the poorest regions in the EU’s current
club of 15.

Surprisingly, this year the EU skepticism has
increasingly been coming from the government. Headed by Janez
Drnovsek, a politician for whom EU membership has always been a key
goal, the government has grown increasingly tart in its statements
since January, when the EC lowered the Agenda 2000 estimates on how
much financial aid the candidate countries can expect when they
join the EU.

Igor Strmsnik, one of the government’s main EU
negotiators, is always careful to explain that Slovenia is not
joining the EU principally because of money. “We only need aid from
the European structural funds during the transition period, which
should be long enough to bring the infrastructure of the Slovenian
economy to a level at which Slovenia could start making payments to
the structural funds.”

Regardless of this altruistic-sounding spin, the
Slovenian government is not about to give up what it feels
rightfully belongs to it. “Our current estimates show that under
the new distribution, Slovenia could get an amount equaling between
0.6 and 0.7 percent of the Slovenian GDP. Going down from 3 percent
to well below 1 percent is absolutely unacceptable for us,”
Strmsnik says. “This is just a fraction more than the 0.3 percent
Slovenia is currently receiving from the European Commission. It is
not going to be enough for the changes necessary for economic and
social cohesion.”

Strmsnik describes aid money from the structural
funds as one of the main benefits that Slovenia expected from
membership, even if the country only needs help for a transitional
period until its economy can compete with other European economies.
“Such a big difference in funding could put in question the
existence of the very institutions that Slovenia created at the
European Commission’s demand and with its funding,” says Strmsnik.
“We are not being greedy and we don’t want funds that aren’t there.
Nor are we trying to portray ourselves as less developed than we
actually are in order to get more money. We only want what others
in the European family are getting; we want to be as equal as we
can be.”

SOME COUNTRIES ARE MORE EQUAL THAN OTHERS Judging
from the changes made to the EU’s Agenda 2000 funding plans, the
new members are going to be much less than equal. Until 2006, the
aid that the future members will receive will be substantially less
than the money the four poorest members are currently getting. Even
after 2006, they can expect to receive a mere 55 percent of the
projected aid per capita received by Spain, Portugal, Greece, and
Ireland, the four poorest current members. What’s more, some
projections suggest that in its very first year of membership,
Slovenia could become a net contributor to the EU.

This is a grim prospect. However, Slovenia’s
foreign minister, Dimitrij Rupel, is putting on a brave face, even
sounding optimistic about the results of the EU’s 1999 summit in
Berlin, at which the number of candidates was increased but the
funds earmarked for new members were kept the same. In May 2002,
when the foreign ministers of the 10 candidate countries gathered
in Warsaw, he chose a more pragmatic tack, urging his counterparts
at least to form a united front when discussing the financial
packages. It is in the interests of all candidate countries, Rupel
said, to demand equal treatment for all candidates.

United or not, the applicants will have by far
the weaker bargaining position at the negotiating table. EU member
states may be divided on how to allocate structural funds, but they
are agreed that, at least for a transitional period, the new
members will not have equal access to structural funds, just as
their citizens will not enjoy complete freedom of movement within
the EU and their farmers will not receive the same generous
subsidies under the Common Agricultural Policy (CAP). And from that
reduced pot of funds, the applicants will receive according to
their needs. Slovenia’s proud status as one of the most advanced of
the EU applicants has turned from a blessing into a curse.

When Eneko Landaburu, the EC’s director general
for enlargement, visited Slovenia in July, he conceded that
Slovenia was in a difficult position. “We are not assigning the
influx of money from structural funds only according to the
country’s GDP per capita; we are also taking into consideration
other criteria such as population, unemployment, [and] GDP.
Slovenia is not in the most favorable position. It wants more,
which is perfectly legitimate, but we will have to see what we can
do about that,” he told the Slovenian daily Delo.

“Stay calm,” he says. “The position of the
commission is that the new members, including Slovenia, will not
lose money; they will not get less than they have so far.” But he
warns that all he can do is try to persuade the members to agree to
that. Right now they seem less than keen on the idea, especially
Germany, the biggest contributor to the EU budget.

DON’T GROW SO FAST?

While Strmsnik may insist that Slovenia wants a
fair share of the structural funds simply in order to make enough
progress to quickly cease being a burden to the EU, three years ago
his perspective was a little different. “If Slovenia could
successfully manage its entry into the EU,” he said in a 1999
interview,” – it wouldn’t approach Europe’s level of development as
quickly as it has been in recent years.”

In effect, he was saying that Slovenes’ average
GDP might be higher than 75 percent of the EU average. Regions
below that percentage qualify for “Objective 1” funds, which in the
2000-06 period amount to 135 billion EUR.

Strmsnik now says he wasn’t suggesting Slovenia
should cool down its economy in order to get more EU money:
“Slowing down economic growth is not possible and would not make
sense.”

But, in any case, the government does not now
expect Slovenia’s per capita GDP, currently 71 percent of the
European average, to cross the 75 percent threshold until 20 06,
several years after accession.

AND THE EU SAID, LET THERE BE REGIONS!

In the longer term, Slovenia’s eligibility for
Objective 1 aid, which is open to all poor EU regions, and money
from the Cohesion Fund, which is earmarked for new members, will
depend on several factors. The first is whether–or, more
realistically, how–the EU adjusts its criteria for support.
Applied strictly, the current formula would disqualify 15 regions
in the current EU from Objective 1 support, as the EU’s GDP per
capita should fall by an estimated 13 percent after enlargement.
But when current allocations are reviewed ahead of the 2007-2013
funding period, the current net beneficiaries of the aid programs
will almost certainly oppose equal treatment for the EU’s
newcomers. What is certain is that, as every state will have a
veto, there will be intense horse-trading before any final
settlement is agreed upon.

A second factor on which access to structural
funds will depend is the regional organization of the country. This
is the subject of one chapter of the acquis communautaire, the body
of EU legislation that new members must adopt. At the lowest local
level–NUTS III in EU typologies–Slovenia had no problem accepting
the EU’s requirements, and significantly increased the number of
its counties. But Slovenia did have an issue at the next level up,
NUTS II, the level where structural funds are allocated. For a long
time this threatened to complicate accession talks
significantly.

Slovenia has traditionally not had regions. But
under EU requirements, imposed partly to rationalize funding
allocations, it had to create them. In Slovenia’s case, the entire
country became just one region, as this country of 2 million people
is barely larger than the average NUTS II region. Slovenia,
however, wanted three regions. That would have given it more
money.

Strmsnik is swift to quash suggestions that
greed was the government’s motive. Three regions would simply be a
logical reflection of the geographic and economic diversity of
Slovenia. “Anybody who ever takes the time to look around Slovenia
will understand why we want to create [three] regions,” he
says.

Slovenia eventually scaled down its demands in
order to close that chapter of the accession talks. But though
resigned to remaining one region until 2006, Slovenia intends to
pursue its case with Eurostat, the EU’s statistical unit, and
convince the EC to accept the division of Slovenia into three
regions. If successful, Slovenia’s poorer and largely agricultural
eastern “region” could be entitled to regional aid after the rest
of the country loses any entitlement.

With the regional chapter now closed, Slovenia
now only has to negotiate the always thorny political issues of
agricultural and budgetary policies. Talks are due in November.
That could be a momentous month. In the same 30 days, Slovenia will
also find out the fate of its NATO ambitions, and elect a
president. The front-runner, Prime Minister Drnovsek, is keen to
wrap up his long reign as premier with Slovenia headed irreversibly
toward the EU.

So far the debate about money allocations does
not appear to have shifted public opinion significantly: A July
Politbarometer survey showed that 50 percent of Slovenes think
joining the EU would be good, while 27 percent oppose
accession.

These figures are not very different from
earlier numbers. The question is whether Drnovsek will be able to
maintain them long enough to keep the country on course to the EU
and at the same time switch his title from prime minister to
president. With the negotiations on the regional organization of
Slovenia–and the financial issues that come with it–temporarily
under wraps, he just might pull it off. But even if the general
public might still think joining the EU is a good idea, the media
have been increasingly critical of the way the government has been
treading the path toward t he EU and NATO. The popular mood could
swing either way. For now, the only safe prediction on the outcome
of the politically tumultuous autumn ahead of Slovenia is that
anything could happen.

Tinca Stokojnik is a freelance journalist based
in Ljubljana and a regular contributor to the Balkan Reconstruction
Report and TOL.

To read more about the candidate countries,
please visit

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