In the world which is increasingly interconnected, and implies complex relations in terms of politics, economics and security, Slovenia is thoroughly contemplating on its role as a member of the European Union, important regional player in the Western Balkan, an open export oriented economy eager to diversify its presence on the global market and a country which cares about green economy and wellbeing of its citizen. All these different factors are affecting Slovenia’s national policies and its involvement in the region. We discussed these issues with the Slovenian Prime Minister Marjan Šarec.
To what extent can small EU countries, such as Slovenia, contribute to the on-going discussion about the path EU headed to? New appointments for positions in the EC can be seen as a test of maturity for the EU leaders – do you agree? What will these appointments mean for the future of the EU?
European Union is a union of values, where all Member States are and should be in a position to equally participate in the shaping of the future of the EU. What matters here is the vision a member state has and its ability to cooperate constructively with others to make the EU better, stronger. Slovenia always advocated the need to respect and further strengthen the inclusive, transparent and democratic formulation and decision-making processes within the EU. I strongly believe we need to preserve and respect the integrity of the institutions and institutional balance within the EU. Preserving the integrity of the of community method is the best guarantee for defining common interests, built upon the prior understanding of the specific situation of each and every Member State. Slovenia has therefore always supported a thorough and inclusive discussion on the future of the EU. Inclusiveness is of utmost importance, since it is necessary that the legitimate concerns and interests of all Member States can be expressed and reflected upon. New appointments for top EU positions are always a challenge. I hope this time we will experience a renewed and reinvigorated commitment to loyal co-operation, inclusiveness and transparency as well as respect of community method. Inter-institutional co-operation is of crucial importance for the formulation of timely, adequate and efficient policies to tackle the biggest challenges we are jointly faced with. We urgently need that.
Which global and European security issues do you see as most pressing in terms of how they may affect Slovenia and its interests?
The international security environment is increasingly complex and unpredictable. It would definitely be presumptuous and naive to single out and tackle only individual issues. We are witnessing different global risk and threat factors: from climate change, financial and economic crises, natural and industrial disasters, the emergence of new crisis areas with armed conflicts, to terrorism, violent extremism, radicalisation, organised crime, illegal migration and cyber-attacks. It would be wrong to presume, that modern security issues affect individual countries and can be tackled in vacuum. It is clear that they have to be addressed in cooperation with other countries. The Government of the Republic of Slovenia is very aware of this, which is why we have drafted a proposal for the Resolution on National Security, while the Resolution on the National Programme on the Prevention and Suppression of Crime has been adopted recently in the National Assembly of the Republic of Slovenia. Both documents address all contemporary forms of threats in the world, while promoting a security culture and an awareness of the importance of the security segment in preserving freedom, democracy and human rights.
How are the recent developments with Russia and China affecting Slovenia’s goals related to export diversification, energy security, and overall economic interests?
Slovenia is an open economy and as a highly export oriented country maintains good economic and political relations with various global players. Slovenia maintains traditionally good relations with both – Russia and China, which is reflected in our economic cooperation. In the framework of the document International Challenges 2019-2020, which is an implementation plan for the promotion of the internationalization of Slovenian companies and the attraction of foreign investments to Slovenia, both Russia and China are included in a broad list of priority countries. Slovenia will continue to position itself as a credible partner with an emphasis on green, creative and smart solutions. We are aware that Slovenia has to open up for further growth and development of our economy. The fact is that we are an export-oriented country. Of course, Slovenia is aware of the need to create a common EU approach, based on the general principles and values to exploit new opportunities.
As one of the strong supporters of the EU enlargement process, do you expect that the club of backers of the enlargement will gain more prominence than it has today? If not, how do you see this affecting the situation in the Western Balkan, and in which way will it impact Slovenian interest in the WB?
Allow me to be very straightforward. I believe that the EU enlargement policy is a geostrategic investment in peace, stability, security and economic growth in the whole of Europe. EU perspective of the Western Balkans should be kept alive, should be supported and should be reinvigorated. While the EU is focused on our internal discussions – discussions on the future of the EU, we should not neglect our relations and enlargement process with the Western Balkans countries. Slovenian positions on these issues are well known, vocal and clear – we see process of the EU enlargement as a process of EU consolidation. This said, I want to stress some additional and equally strong points. Rule of law, fundamental rights, media freedom, strengthened democratic institutions, economic development and competitiveness rightly remain cornerstones of the enlargement process. Good neighbourly relations, regional cooperation and respect for the agreements reached are further indicators of the required progress. But – when the progress on the side of candidate countries is achieved, EU members should respond, take appropriate decisions and enable steps on the EU path. In this sense latest achievements of North Macedonia in reforms, good neighbourly relations and in the internal political dynamics are remarkable. Albania too has continued to make good progress in the EU reform agenda. Slovenia has been advocating the opening of negotiations with both countries and will continue to do so in autumn. We expect decision on the start of the negotiations with both countries. I am convinced this would send very necessary message to the region that EU enlargement process continues. The EU has made several promises to the region and we strongly believe our common goal should be responding credibly on those promises to preserve the reform momentum, stability and overall progress of the region. Sometimes approach should be very straightforward – strict, but truly fair, based on the individual merits approach.
What do you as the biggest challenges and opportunities related to the Slovenian EU presidency in the second half of 2021? How did things change for the EU and Slovenia since the previous presidency in 2008?
Slovenia will hold its second Presidency of the Council of the EU in 2021. We want to be an active presidency, an honest broker with the right mix of ambition and political reality, which cares about the future of the Europe. The goal is also to achieve long term and positive effects on the lives of people and broader communities. During our first Presidency in 2008, the first among the new EU Member States, we focused primarily on the main tasks and obligations expected from the presiding country. This time, our ambitions is higher. Two years before the Presidency we are already discussing the first draft of our Presidency priorities. One of them will focus on Sustainable Europe. As a green, vibrant, climate ambitious member state with one of the highest shares of Natura 2000 areas, I believe this is a must. As we would like to leave a long term and sustainable imprint of the Presidency for the promotion of Slovenia and its citizens. This is also one of the reasons that events will not take place in Brdo Congress Centre only, but also in other places all around Slovenia. With this Presidency, we want to bring EU policies closer to all citizens and actively involve them into the project to feel it (as goes our national brand: “I feel Slovenia”).
There are several important steps ahead of your government: new privatization strategy, the pensions reform. What is the position of the government regarding these questions?
Slovenia has recently completed the privatisation of its system banks according to the commitments given to the European Commission in the state aid procedures. The state’s 100% stake in Abanka, has been sold to NKBM. The transaction is expected to be completed by the end of the year after the regulatory approval. SSH (Slovene Sovereign Holding – SDH) also sold the remaining 10% in NLB that it was obligated to sell in line with the state aid commitments. With the privatisation of Abanka and privatisation of the country’s largest bank NLB, Slovenia fulfilled the obligations to the European Commission to privatise state banks after providing state aid for recapitalization of banks in 2013. Concerning privatisation Slovenia has »state assets management strategy« in place from 2015. The framework for managing state owned enterprises is fully in line with the OECD guidelines for managing state owned enterprises. The focus in recent years was to improve performance of these companies. Return on Equity (ROE) exceeded 6% in 2017 and 2018 which is comparable for instance with Sweden. Portfolio of state owned enterprises in our case is now mainly in infrastructure sectors (highways, railways, port of Koper), energy generation and distribution and utilities. We will further fine tune the portfolio and exit from some sectors like services and tourism. We completely exited from banks, but we shall keep our position in insurance companies, which are important regional players. Slovenia belongs to those countries where the share of elderly people in the population has been increasing most rapidly, which poses a significant risk and points to high negative pressure on public finances in future decades. Age-related expenditure is expected to increase. Slovenia has been addressing these challenges and various measures have already been adopted in this respect, in particular in the area of pension system, active labour market policy measures and other labour market measures aimed at prolonging labour activity of older workers. But with projections for Slovenia that the age-related expenditure as a share of GDP is to rise by six percentage points by 2070, one of the sharpest increases in the EU, the Government is further planning and drawing up measures to neutralize the negative effects of rapid population aging, such as early entry into the labour market by young people, promoting late retirements, introduction of the demographic fund and others. When prepared, concrete measures will be of course subject to the negotiations with the social partners.
How are the digitization and the transition to the economy 4.0 changing the structure of the economy and the way society and the government are functioning? Are the aging population and the lack of workforce affecting the solutions you are looking for?
We are witnessing rapid technological changes based on technologies like, for example, internet of things, artificial intelligence, mass data processing, robotics, 3-D printing and genetic engineering. These disruptive innovations already effect our everyday lives, our societies and economies, even politics. New ways of creating, producing and selling products are emerging. Business models have changed. By individualizing requests from users, the boundary between products and services is deleted. There are also new ethical issues that need to be resolved. On the other hand new technologies bring new opportunities and can help us in coping with societal challenges such as aging population and environmental challenges. In line with these technology developments, the labour market is also changing. The automation of production might lead to an excessive workforce in the future, but currently, since we are witnessing the lack of workforce, it helps our companies to sustain the high levels of production. It is important to understand that in the era of the 4th Industrial Revolution, some jobs are disappearing, others are re-emerging. This might lead to a greater structural unemployment. According to some data, more than half of today’s primary school pupils will have professions after their education, which do not even exist today. Due to great uncertainty about the future of professions, it is important to work on improving competencies, skills and life-long learning. All these aspects are taken into account by the Government when planning different policies, measures and solutions for the future development.