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Tiny Slovenia Fills Big Shoes As It Wraps Up EU Presidency
The Washington Diplomat / June 2008

By Larry Luxner

Seven years ago, when George W. Bush made his first trip to Europe as president, he stopped at the palatial Slovenian retreat of Brdo pri Kranju north of Ljubljana, and met Russia's Vladimir Putin there for the first time.

"We were not in NATO yet, and Russia didn't want the meeting to take place on NATO territory," said Slovenia's ambassador to the United States, Samuel Zbogar. "On the other hand, we are not hostile to Russia, so they picked us."

In early June, Bush will return to Europe for the last time as president, again stopping in the Slovenian capital for a two-day U.S.-EU summit that'll address Kosovo independence, rising oil prices and growing world hunger, among other things.

Only this time, instead of being an EU wannabe, Slovenia now occupies the six-month rotating presidency of the exclusive 27-member club — an honor never before given any of the newly independent nations of Eastern Europe. As such, the little Alpine country provides guidance to 500 million Europeans on everything from Darfur and Zimbabwe to global warming and the falling dollar.

"It's kind of symbolic in a way, isn't it?" mused Zbogar. "We were the first one to leave Yugoslavia in 1991, when we were on the agenda of the EU. And now, 17 years later, we are at the helm of the EU, and we're putting Kosovo on the agenda. A circle is being completed."

Zbogar, 46, was interviewed at Slovenia's impressive embassy along California Street in Washington's upscale Kalorama district. The mission, previously the Yugoslav Embassy, was allocated to Slovenia in 2001 and recently renovated at a cost of $5 million by Powe & Jones Architects. The ambassador and his family live on the top floor of the four-story structure, which was officially inaugurated by Slovenia's foreign minister, Dimitrij Rupel, last September.

"We changed a lot of things about this building, especially the huge antenna on the top, which provided a direct communication link with Belgrade," he joked. "It was bigger than the building itself."

Zbogar has been Slovenia's envoy in Washington for the past three and a half years. An avid runner, the athletic diplomat has done the Army Ten-Miler, the ACLI Capital Challenge, Arlington's Marine Corps Marathon and the famed Boston Marathon, most recently clocking in at three hours and 57 minutes. He's also started a foundation to eradicate land mines in the Balkans; so far, Zbogar's running events have raised $70,000 for the cause.

Zbogar said his post in Washington will probably end shortly after Slovenia hands over the EU presidency to France on June 30.

In many ways, the embassy's new design — with its spacious terrace, wide picture windows and panoramic vistas — reflects Slovenia's break with its communist, Yugoslav past and its embrace of democratic values such as openness and transparency.

In truth, Slovenia has about as much in common with, say, Macedonia, as the former Soviet republic of Estonia has with Kyrgyzstan.

"We were all together in the same state for over 70 years, but we were very different even when we were part of Yugoslavia," he explained. "We were under the Austro-Hungarian Empire for a thousand years, and we're developed and industrial, while other parts of Yugoslavia were not."

Tiny Slovenia, slightly smaller than New Jersey, is sandwiched among much larger Italy, Hungary, Austria and Croatia, with a sliver of coastline along the Mediterranean Sea. The first country to declare itself free of the collapsing Yugoslav confederation, it is today the most prosperous of all 21 former Soviet and Yugoslav republics, with annual GDP growth of 6.1%, inflation of 3.6%, unemployment of only 4.9% and an export-driven economy dominated by pharmaceuticals, electronics, furniture and crystal glass.

"When we declared independence in 1991, our annual per-capita purchasing power was $5,000 and Serbia's was $3,000," said the ambassador. "Today, ours is $31,000 and Serbia's is still $5,000.

"We were already developed within Yugoslavia, so after the first few years we had to reposition ourselves and export to the West," he continued. "Obviously, we have had good economic policies in place for the past 17 years. At the beginning, we were very careful with foreign investment because we wanted to strengthen the economy. Now we are more open, and we wish to get more investment, especially from the United States."

The country boasts $7.5 billion worth of foreign direct investment from leading multinationals including France's Renault, Switzerland's Sandoz and U.S. giants IBM, Goodyear and Microsoft.

On Jan. 1, 2007, Slovenia adopted the euro as its official currency, becoming the first EU member state from the 2004 enlargement to do so. Exactly one year later, Slovenia took over the presidency of the EU, prompting this remark from Daniel Fried, assistant U.S. secretary of state for European and Eurasian affairs: "Slovenia will be faced with immediate and tough issues, but by happy coincidence the toughest issue and the most immediate one, Kosovo and its final status, is the issue on which Slovenia is the most prepared. That's because, to state the obvious, you know the ground, the players, the culture and the issues."

Zbogar says he's relieved that the Feb. 17, 2008, declaration of independence by Kosovo didn't spark another Balkan war.

"The whole Kosovo transition went smoothly," said the ambassador, whose previous posts include Zagreb, New York and Beijing. "Many people expected violence after the declaration, but on the contrary many states recognized Kosovo, and the EU decided to send 2,000 judges and police officers to help monitor implementation of minority rights and put together the whole judicial system."

Unfortunately, Slovenia's speedy recognition of Kosovo — 90% of whose two million inhabitants are Albanian-speaking Muslims — came at a steep price: the immediate withdrawal of Serbia's ambassador from Ljubljana.

Also opposed to Kosovo's independence are Russia, Greece, Cyprus and Spain, though most EU members including heavyweights France, Germany, Italy and the United Kingdom have already recognized the world's new country, as have the United States, Canada, Japan, Turkey and Taiwan.

"For Serbs, this is a very sensitive issue, but the truth is, Serbia hasn't had sovereignty over Kosovo since 1999, when Milosevic started the war," he said. "Nobody's comfortable that Kosovo declared independence without Serbia's agreement, but they were all bad options, and independence was the least worst option. For 15 years, Serbia was under an economic embargo because of the wars they were involved in. That's why we are pushing this Serbia Stabilization Association agreement, as a first step towards becoming a member of the EU."

Despite the current strain in relations between his own country and the current government in Belgrade, Zbogar says Slovenia is urging Serbia to sign this stabilization agreement as a first step for joining the EU. But so far, the talks have stalled..

"We have to be optimistic. The EU is extending the hand of friendship to Serbia, and we hope Serbia will take it," he said. "They must break with this feeling that everybody hates them, that everybody is against Serbia."

Besides bringing the focus of the EU to the Western Balkans, Slovenia has also made a priority of promoting inter-cultural dialogue and trying to stop global warming by reducing greenhouse gases around the world. Of less importance at the moment is enlarging the EU itself beyond its current 27 members and the handful of countries slated to join in the next few years.

"The EU won't expand much more because there is no mood for further expansion at the moment. It was a big enlargement when 12 new members came in," said Zbogar. "All these countries were poor, so a lot of money is coming out of Brussels, and it'll take time for the EU to digest this enlargement."

Regarding Europe's relationship with the United States, Zbogar says the upcoming summit will be an ideal time to reflect on how much things have changed since Bush's first visit to Slovenia in 2001.

"During his first term in office, the big issue was Iraq and that was the low point," he told the Diplomat, noting that millions of people across Europe were shocked to see TV pictures of U.S. torture cells at Guantánamo and Abu Ghraib.

"This is one of the reasons you had anti-American feelings among the public, though it was really opposition against the policies of the Bush administration," he said. "Since then, relations with the administration have really improved. The United States and the EU are the two engines of international relations, with $3 trillion in bilateral trade and 14 million jobs on both sides of the Atlantic that depend on this trade."

Trade between Slovenia and the United States, incidentally, comes to only $400 million, and Zbogar concedes that his government hasn't been too successful at getting investment from the Slovenian-American community.

"More than 70% of our trade is within the euro zone, so from that point of view, joining the EU was good. No one regrets it, and for tourists, it really simplifies things. But for our company, the falling dollar is a problem. This has affected trade negatively, becuase our companies cannot afford to export. They aren't competitive, and if they lower their prices, then they won't cover their losses."

Another serious problem is Slovenia's stagnating population — which barely reached two million and is now on the way down.

"We will need immigrants in the future, because of our aging population and low birth rate." said Zbogar, listing the incentives his government offers would-be mothers to produce more children. "If you have three kids, you get an extra tax rebate of around $400. We also give one year of 100% fully paid maternity leave, but it doesn't help."

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