After Greece, Ireland, Italy, Portugal, Spain and most recently Cyprus, the latest victim in the European sovereign debt crisis could be Slovenia, embroiled in economic and social upheaval. The Central European country of barely two million has been going through a political crisis.
Independent since 1991, Slovenia boasts a healthy economy, excellent health care and a solid welfare system. But its politics leave much to be desired. Falling governments, premature elections, a collapse of the banking system, bankruptcies and corruption have taken a heavy toll. The incumbent administration is already the eleventh in the state’s 22 year independent history.
When the world financial crisis hit, Slovenia, like many other European countries, postponed fiscal adjustment and posted deficits equivalent to 6 percent of gross domestic product. Prime Minister Janez Janša’s right-wing government implemented spending reductions and reforms starting early last year to bring down the shortfall but met strong opposition from seniors, students and welfare recipients who were mainly affected by the cuts.
Public outrage was confounded by revelations of corruption by an investigative body that said Janša had failed to account for at least €200,000 in income while Zoran Janković, the left-wing opposition leader, had amassed some €2.4 million in funds that he could not legally account for. Both leaders were also implicated in a variety of graft scandals.
A new government took office in March. But Slovenians’ hopes for improvements were quickly dashed when the infrastructure minister resigned after being accused of owning an illegally built home on the coast.
Meanwhile, the country’s finances are in ever direr straits. Slovenia may not be able to make ends meet without international financial support which would make it the fifth European nation to require a bailout; the sixth when counting Spain’s bank bailout.