The small Alpine country faced its biggest test at the very beginning of 2008 when it came under the spotlight as it took over the rotating presidency of the European Union, which it joined in 2004, for six months on January 1. Newly-elected President Danilo Turk and the coalition government of Prime Minister Janez Jansa had to steer the 27-member bloc during the controversial proclamation of independence of the Serbian province of Kosovo and the failed ratification of the new EU Treaty. Analysts and politicians at home and abroad labelled the first presidency of one of the new EU members who joined the bloc in 2004 and 2007 as successful.
This, however, did not help the centre-right SDS of Janez Jansa to win the general election in September. Jansa was narrowly defeated by the centre-left Social Democrats (SD) of Borut Pahor, who formed the country's new coalition cabinet in November together with two other centre-left parties, Zares and LDS, and the pensioners’ party DeSUS.
The new cabinet cannot complain of a lack of challenges before it.
The Slovenian export-oriented economy already feels the heat of the global crisis and 2009 promises to be even more torrid. Tougher conditions for financing and dwindling demand for their products have already forced local companies to slash jobs and cut working hours and salaries.
The registered unemployment rate in the country of two million people is projected to remain below 7.0% this year but is expected to rise to 8.0% or even 8.2% in 2009. The number of unemployed Slovenians is expected to rise to between 78,000 and 80,000 at the end of 2009 from some 63,000 in October.
The government's Institute of Macroeconomic Analysis and Development, UMAR, has cut its forecast for the country's gross domestic product (GDP) growth next year to 1.1% from 3.1% forecast earlier. UMAR has also cut its GDP growth forecast for this year to 4.1% from 4.8%.
Local companies have had problems, but it has mainly been the steep falls on global markets which dragged down the indices of the Ljubljana Stock Exchange (LJSE) by some 70% since the end of last year, erasing their gains in 2007. The negative trend on the bourse suffocated the market debuts of the country's leading reinsurer, Pozavarovalnica Sava, and largest insurer, Zavarovalnica Triglav, discouraging other initial public offerings on the market.
After the failed sale of a 49.13% stake in majority state-owned Telekom Slovenije at the beginning of the year and amid the current slump on the bourse, analysts expect no privatisation deals in the country next year. They expect Slovenia’s shattered capital market to rebound no earlier than the second half of 2009 when an expected recovery of the economy at home and abroad is likely to bring back investor confidence.
The scenic and wealthy country is now preparing to welcome in its 18th year since it gained independence from former Yugoslavia, hoping to meet the 2009 challenges as successfully as this year.
