Slovenia is a small, clean, picturesque country. Having seceded from Yugoslavia in 1991, it joined the EU at the same time as Malta. Slovenia has learnt to live with its past and opted for evolution rather than revolution. Two out of every three Slovenes are Catholic. This January, it will assume the presidency of the 27-nation EU bloc. Slovenia is undoubtedly a country on the move.
Slovenia's GDP per capita (adjusted in terms of purchasing power) stands at 91.7 per cent of the EU average. In 2000, it was at 75.8 per cent, an improvement of almost 16 per cent points. This contrasts with Malta's record. Our GDP per capita in 2000 was at 84 per cent of the EU average and by 2006 it had declined to 78.9 per cent, a fall of 5.1 per cent points.
Slovenia's economy between 2001 and 2007 is estimated to have grown by 4.25 per cent, while ours at 1.45 per cent.
The inflation rate in each of the countries over the last two years has been at 2.5 per cent.
The World Economic Forum in its last Global Competitiveness Report ranked Slovenia in 39th place and Malta in 56th place. Slovenia achieved this sound economic performance even though it opted not to go for shock therapy, retained elements of its communist past and held on to state control of vital sectors of the economy such as banking and telecommunications. Slovenia evidently had a clear sense of economic direction.
On January 1, 2007, Slovenia became the 13th country to adopt the euro. The exchange rate was set at 239 tolars for every euro. This rate did not make life easier for the people. The Bank of Slovenia distributed 760,000 calculators to help them cope. The Slovene authorities prided themselves that the changeover had been carried out in a "swift and smooth manner" and 95 per cent of the people agreed.
In the first two months of the changeover, official statistics showed there was a net decrease in prices. The Slovenes thought otherwise: 83.4 per cent believed that the cost of living had gone up because of the euro and many (62 per cent) felt that prices had not been fairly rounded off. Much of the blame for these price increases was attributed to retailers not importers. Various analysts noted that perceived inflation was closely related to the price of food products. Commenting on this, the president of the European Central Bank insisted that there exits a tendency "to take the euro as a scapegoat, which is extraordinarily unjust, unfair and false".
Eurostat's calculations show that the initial, one-off, impact of the euro on consumer price inflation was of about 0.3 per cent. Perhaps, in such instances, it makes sense for the authorities to communicate better with the people. In particular, they should explain on what basis is the harmonised indices of consumer prices (HICP) determined. The HICP is the official measure of consumer price inflation calculated according to a common approach and a single set of definitions. It is another case of one-size-fits-all economics.
In the meantime, the Slovenia Consumers' Association was very active monitoring prices. Since February 2006 they had been closely following price changes. Pricewatch was a scheme they had launched to this effect. The basket consisted of 104 items, of which two out of three were products, and the rest services. Comparative data was published on a three-month basis. Higher prices started to be noted during the last quarter prior to the date of the changeover. Those businesses whose prices increased by more than six per cent were put on a blacklist as part of a "name and shame" campaign. If consumers want to protect their interests they need to be proactive; their vigilance will ultimately determine whether they will buy as per market forces or the law of the jungle.
Earlier this month, Slovenia held presidential elections. The President is the chief-in-command of the armed forces and carries some authority over foreign affairs. Otherwise the post is a ceremonial one. The Slovenes voted in a newcomer. Left-leaning Danilo Tuerk, a long-time diplomat, obtained an overwhelming victory polling 68 per cent of the votes. The leader of the Social Democrat Party who backed Mr Tuerk remarked that this victory "was a clear signal that people expect a change". The International Herald Tribune reported that voters "were looking for fresh faces in politics". The victory persuaded the Prime Minister to ask for a vote of confidence from Parliament that could lead to early elections. This political turbulence comes at a delicate time given the country's imminent EU presidency. In a democracy, people make a statement each time they are called to vote.
A few days after the presidential election, some 70,000 workers, students and pensioners staged the largest protest in 15 years in Ljubljana. They were after better pay and more social justice. The average monthly wage in Slovenia is about €1,280, with the minimum wage being €540. These are almost at par with our own in Malta. After extensive negotiations the social partners had entered into a social agreement covering the 2007-2009 period.
During 2007, Slovenia continued to register robust growth of more than six per cent per annum. However, inflation at 5.1 per cent is now rampant. Workers have been asking for a 3.5 per cent wage increase.
Life in the EU village does not seem to change much. It appears that while some are doing better than others, the fundamental challenges remain the same. Who knows what we in Malta will be saying 12 months from now?
Fms18@onvol.net