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citizens who could use them to buy shares or invest in newly created
investment companies,
while 40% would be offered for an employee buy-out or sold publicly. The selected
privatisation model encouraged the large-scale inclusion of employees in the privatisation
process, made the ‘wild privatisation’ of enterprises more difficult, and ensured they could
remain in Slovene hands. However, it accelerated the fragmentation of ownership and, by
giving priority to employees and Slovene citizens, obstructed the inflow of foreign capital and
investment. And although Slovenia was claimed to be one of the least corrupt former-
Communist countries, the privatisation of its economy was nevertheless subject to
considerable abuse, with some individuals amassing great fortunes illegally, and pressure
applied to small shareholders to sell their shares, which increased the concentration of capital
in the hands of a management-entrepreneurial elite, made up partly of former Communist
directors and partly of newly emerging players.
The unpredictable behaviour of the Slovene People’s Party (SLS), which formed part
of the government, while retaining close links with the opposition, burdened the government
coalition assembled by Janez Drnovšek after the 1996 elections with serious internal disputes.
Despite this, the government enjoyed broad public support, especially during the first two
years of its mandate. The coalition’s popularity was due mainly to the favourable economic
development. In the second half of the 1990s, the Slovene economy grew at over 4% per year,
while the unemployment rate settled at 14%, and began to fall towards the end of the decade.
With an effective policy of reducing inflation, the inflow of foreign investment also began to
increase. The transformation from a socialist to a market economy was accompanied by a
gradual reorientation from industry to services and the creation of small private companies. In
1995, the tolar became fully convertible, and the bank rehabilitation programme, started in
1993 and carried out with state support, finally concluded a few years later. Alongside these
more or less stable economic conditions, Slovenia retained a relatively high level of social
security and a high quality system of public health care. In towns and villages with sounder
economic foundations, the attitude towards the environment and cultural heritage changed
appreciably. This was seen in the heightened care for the cleanliness and external appearance
of these settlements. The government successfully modernised primary and secondary
education, but paid less attention to science and the universities, where the number of
employees actually fell by the end of the 1990s. The introduction of market conditions into
the cultural sphere caused dissatisfaction throughout the sector. Following independence, the
expectation had been that the cultural institutions and projects – considering the central role of
culture in Slovene national development – would enjoy particular favour from the new
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authorities. However, the parties and political circles were increasingly taking the position
that in the new order, the government and the state could neither interfere with cultural
creativity – as in the times of socialism – nor continue to be its sole supporters and guardians.
The government coalitions did continue to finance public cultural establishments and major
cultural events and projects, but despite reducing the budget for culture, they failed to provide
a clearer definition of their cultural policies or to promote private investment in cultural
institutions and activities through planned tax relief. With the expansion of cultural
production and the rapid growth of many private publishing companies, theatres, galleries,
museums and television and radio stations, efforts to commercialise culture and to adapt it to
consumer tastes increased.
On the foreign policy front, Slovene politicians worked after independence to achieve
European Union and Nato membership
as quickly as possible, to establish Slovenia within the
United Nations and other important international political and economic organisations, and to
settle unresolved issues with neighbouring countries. Slovenia’s mission in Brussels was one
of the first Slovene diplomatic offices abroad. An agreement on co-operation between
Slovenia and the European Union was signed as early as 1993, aiding the Slovene economy’s
reorientation towards European markets. For a brief period, Silvio Berlusconi’s government in
Rome obstructed the agreement on Slovenia’s association with the European Union, finally
signed three years later; Berlusconi’s government insisted that the accession agreement could
only be signed if Slovenia opened up its property market to citizens of EU member states.
When, in 1997, Ljubljana gave in to Italy’s demands and relaxed the property market with a
change to the constitution, negotiations on Slovenia’s full-member status of the EU formally
began. The government’s concession to Italian and ‘European’ pressure caused public
consternation, but still failed to weaken the broad support for EU accession. Public opinion
was more divided over the question of Slovenia’s membership of Nato. This was initially
supported by the majority of the population. In 1994, Slovenia became a member of the
Partnership for Peace, and this was followed two years later by membership of the North
Atlantic Cooperation Council. In the second half of the 1990s, however, public opinion began
to change and opinion polls indicated that increasing numbers believed that Slovenia had
nothing to gain from Nato membership, and that it would be better if Slovenia remained
neutral and actively supported the formation of the European security and defence system.
However, all the large political parties decided to support Nato membership and, at the end of
the 1990s, the Slovene government increased its efforts to join the alliance.
During the 1990s, Slovenia successfully joined the Council of Europe, the