LJUBLJANA, December 20, 2006 - The changeover to the euro on January 1st will be a boost towards Slovenia's integration into the most successful countries of the European Union, Slovenian Prime Minister Janez Jansa told AFP in an interview.
"The euro isn't important only for our economy, we also expect psychological benefits... we are coming closer to the most developed part of the EU and this will give (citizens) confidence, to be prepared for the next reform steps," Jansa said in his brand new office in Ljubljana last week. He added his centre-right government, that came into power after winning the 2004 parliamentary elections, has taken all precautions to avoid an increase of prices when tiny Slovenia becomes the 13th European country to adopt the common currency. "We introduced double labelling of prices last March, very early, and we'll keep it six months after introducing the euro," Jansa said. The danger of inflation is smaller when citizens are aware of it: "Slovenians are very careful about money," Jansa said. The inflation over 12 months stood at 2.3 percent in November, with prices even falling by 0.8 percent in October.
The charismatic 48-year-old prime minister and leader of the centre-right Slovenian Democratic Party (SDS) has been in Slovenian politics since the first conflicts erupted between Ljubljana and former Yugoslavia's central power in Belgrade in the late 1980s. He headed the defence ministry in the first government that led Slovenia to independence in 1991. Slovenia, a small nation of two million inhabitants neigbouring Italy and Austria, joined the EU in 2004 along with nine other countries. It the first of the newcomers to be allowed into the eurozone, and there has been a national consensus in Slovenia about the euro. Its purchasing power per capita currently stands at 82 percent of the Union's average equalling that of Greece, according to Eurobarometer's latest survey.
Slovenia's long economic success is also due to the "work ethic" that has its roots in the country's century old history within the Austrian Empire, according to Jansa. Next month, the Slovenian government will also launch a broad fiscal reform, meant to decrease the corporate tax from 25 percent to 20 percent, reduce the income tax brackets, and even eliminate the payroll tax. "We want to make the most productive part of Slovenia stay here, work here and contribute to Slovenia's development," Jansa said.
The government also plans to increase foreign investments in 2007 by re-launching privatisation "especially in the energy sector, steelworks, telecommunications and banks." "The state will keep only a 25 percent stake in Nova Ljubljanska Banka and NKBM," Jansa said referring to the country's two largest banks that have over a 50 percent of the banking market.
While the switchover to the euro is expected to strengthen Slovenia's stability, the country's reputation will improve when Slovenia holds the European Union's presidency for the first six months of 2008. "It is a big challenge for a small country, but there are other small countries in the EU which have proved several times that they could be quite successful in leading the EU, like Luxembourg," Jansa said. Germany and Portugal, the two countries that will hold the Union's presidency before, have agreed to work together with Slovenia within a so-called "troika", he said.
Besides priorities, like a common energy strategy, more research, a common European migration policy and inter-cultural dialogue, Slovenia will also encourage the Union's ties with southeastern Europe and supports Croatia's membership, he said. "We are trying to encourage the democratic forces, especially in Serbia," Jansa said. A consensus in the EU exists about the Western Balkans being the "next natural step for the EU's enlargement," according to him.
Jean-Michel Stoullig, AFP Vienna
Bojan Kavčič, AFP Ljubljana
