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Slovenian Employment Policy: ‘Soft’Europeanisation by ConsensusMyrto Tsakatika aa University of GlasgowPublished online: 09 Mar 2012.

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Slovenian Employment Policy: ‘Soft’

Europeanisation by Consensus

MYRTO TSAKATIKA

Abstract

Slovenian employment policy was subject to ‘soft’ Europeanisation despite the lack of normative

resonance between entrenched policy ideas and new policy ideas embedded in the European Union’s

Employment Strategy. The key mechanisms at work are shown to be voluntary policy transfer and

diffusion, rather than strategic use of Europe by key domestic actors to bring about policy change. This

article argues that normative resonance is not a necessary condition for ‘soft’ Europeanisation and

highlights the importance of other domestic factors, such as norms of consensus-seeking and relative

independence from international financial capital as mediating factors that can explain policy impact.

EUROPE’S ROLE IN THE NEW GLOBALISED ECONOMY, demographic trends and

changes in the structure of the family have thrown up new challenges for the

increasingly interdependent European employment regimes (Zeitlin 2009). Yet the

diversity of European welfare states (Esping-Andersen 1990) and ‘varieties of

capitalism’ (Hall & Soskice 2001) which incorporate different sets of values, norms,

institutions and practices of employment policy (Rhodes 2005) have persistently posed

serious constraints to the emergence of substantive consensus on a common European

policy (Scharpf 2002).

In an attempt to address this state of affairs, the 1997 Treaty of Amsterdam made

employment policy a ‘matter of common concern’ and called upon member states to

coordinate their employment policies (Treaty of Amsterdam, Title VIII).1 The

European Employment Strategy (EES) was agreed upon later on in 1997 in a Special

Jobs Summit held in Luxembourg (Goetschy 1999). Member states were active

participants while candidate states were encouraged to ‘shadow’ the Strategy. The four

original priorities of the EES were employability, entrepreneurship, adaptability and

equal opportunities.

The author would like to thank Maurizio Carbone, Magnus Feldmann, Kelly Kollman, Manos

Matsaganis, Dimitri A. Sotiropoulos, Alasdair Young and two anonymous referees for their

comments. The usual disclaimer applies.1Treaty of Amsterdam amending the Treaty on European Union, the Treaties establishing the

European Communities and Related Acts, Official Journal C340, 10 November 1997.

EUROPE-ASIA STUDIES

Vol. 64, No. 4, June 2012, 673–693

ISSN 0966-8136 print; ISSN 1465-3427 online/12/040673-21 ª 2012 University of Glasgow

http://dx.doi.org/10.1080/09668136.2012.660765

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‘Employability’ involved the promotion of active labour market policies and the

introduction of a preventive and activating approach to unemployment. ‘Entrepre-

neurship’ involved measures to facilitate the opening of new jobs in small and

medium-sized enterprises, while ‘adaptability’ referred to measures to introduce

flexible arrangements in working time and work organisation and the concept of

lifelong learning. ‘Equal opportunities’ involved promoting equality at work as well as

reconciling work and family life (Goetschy 1999). Following an evaluation of the first

five years of the EES (CEC 2002), it was decided to streamline it with other economic

and social policy coordination processes in the context of the Lisbon Strategy for Jobs

and Growth.

Despite frequent reviews of the annual guidelines the core philosophy of the EES

did not undergo significant changes over the Strategy’s first phase (Watt 2004), which

is the phase examined in this article (1997–2002). ‘Employability’ was ‘at the heart’ of

EES (Lefresne 1999, p. 460), reflecting a ‘Third Way’ approach (Visser 2000, p. 450).

‘Employability’ reflects a new focus on individual as opposed to collective

responsibility for employment and unemployment. Being employable means remain-

ing competitive in the labour market by obtaining appropriate competencies and

skills, being flexible and willing to continue to learn throughout one’s lifetime (Garsten

& Jacobson 2004).

The EES has been considered a model for the new, promising, ‘soft’ approach to

EU governance which takes national diversity into account while facilitating the

exchange of best practices between member states and stimulating long-term

voluntary policy convergence in the employment field. The innovation of the ‘soft’

approach lies in triggering policy change by ‘framing’ and learning, rather than

through legal imposition of EU standards. Extensive academic debates have taken

place on the merits and effectiveness of ‘soft’ as opposed to ‘hard’ Europeanisation

(Knill & Lehmkuhl 2002; Sedelmeier 2006), in the context of which domestic actors

are argued to respond to Europeanisation pressures according to the logic of

appropriateness rather than according to the logic of consequences (March & Olsen

1984).

The few comparative studies that have been conducted on the EES, most of which

focus on the EU-15, have indicated that its impact on the employment regimes of the

member states often goes beyond cognitive shifts in policy-makers’ perceptions to

shifts in national policy-making agendas and concrete policy change (de la Porte &

Pochet 2002; Zeitlin et al. 2005; Zeitlin & Heidenreich 2009). More research is required

across the EU-27 to address the core question of when and how the EES triggers

domestic policy change.

According to the normative resonance hypothesis, the better the fit between EES

norms and national employment policy norms, the greater is the likelihood of change

(Sedelmeier 2006; Lopez-Santana 2006). If this is the case, the EES simply reinforces

existing policy ‘paths’; change cannot be expected in countries whose regimes are not

in line with the EES. An alternative hypothesis is that normative resonance is not a

necessary condition of impact (Falkner et al. 2005). The latter may occur where other

domestic factors are favourable. If this is the case, the EES might indeed be shown to

open possibilities for policy experimentation leading to substantive change even in

countries whose employment regimes are not in line with the EES.

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In this article I will examine the impact of the EES on Slovenia, not only because the

Slovenian case is under studied, but also because it constitutes a ‘least likely’ case for

policy change through processes of ‘soft’ Europeanisation. First, what can be observed

in Slovenia in the period under consideration is a clear lack of fit between the norms

embodied in the Bismarckian corporatist employment policy regime established in the

early 1990s following the country’s independence from Yugoslavia (Ignjatovic et al.

2002) and ‘Third Way’ EES norms, such as ‘activation’ and ‘making work pay’ which

came into play upon the establishment of the EES in 1997. Second, in terms of the

domestic mediating factors involved, Slovenian political elites share a broad

substantive policy consensus on economic and social policy, which could be expected

to obstruct policy change (Mailand 2009). To complicate things further, Slovenia

operates on a consensual system of political and interest intermediation, where the

high number of ‘veto points’ could also be expected to present obstacles to change

(Haverland 2000). Surprisingly, however, change did occur: by 2004 when Slovenia

joined the EU, EES ‘employability’ ideas strongly informed policy thinking, the policy

agenda and policy programmes (Kolari�c et al. 2009, pp. 448–49). Slovenia thus

presents us with an interesting ‘puzzle’.

The case study adopts a longitudinal research design, comparing the employment

policy regimes in Slovenia before and after the emergence of the EES in order to

demonstrate the lack of normative resonance and identify policy change. It then

examines whether change can be attributed to mechanisms of ‘soft’ Europeanisation.

Subsequently, it examines the relevance of key domestic factors for the occurrence of

‘soft’ Europeanisation, in particular the country’s structural dependence on the EU

and domestic consensus on employment policy. The study is based on the examination

of key policy documents, the secondary literature and six semi-structured interviews,

held between December 2003 and September 2004 in Ljubljana with senior officials

involved in policy making in the employment field during 1991–2004, who were

questioned on employment policy change during that period.

Slovenian employment policy from independence to EU membership (1991–2004)

Before the EES

Under Yugoslav self-management full employment was ensured. Unemployment

benefits were only allocated to a very small number of individuals who were hard to

place or were considered unable to work (Svetlik 1992, p. 60). Despite being the most

economically robust of all the former Yugoslav republics, the independent Republic of

Slovenia came up against an unprecedented unemployment crisis in the early 1990s.

The causes lay in the country’s transition to the market economy, company

restructuring and the loss of Yugoslav export markets. A substantial number of

workers were made redundant, while considerable potential pressure on the

unemployment insurance system was eased through early retirement schemes

(Mencinger 2000, p. 203). Between 1988 and 1992 over 150,000 people, 15% of all

insurance payers, took retirement owing to old age or disability (National VET

Observatory of Slovenia 1999, p. 12). The consequence was a drastic reduction of the

activity rate (from 68.6% in 1991 to 57.7% in 1993), which mainly affected older

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workers (Svetlik 1997, p. 223). Furthermore, there was a worrying high school-

dropout rate, particularly from vocational and technical secondary education, and a

collapse of the pre-existing system of adult education (Svetlik 1993; Kovac et al. 2002).

These developments rendered young, poorly skilled adults vulnerable to unemploy-

ment and hindered the retraining of older workers who had been made redundant. As

a result, registered unemployment rose dramatically from 1.6% in the late 1980s to a

peak of 14.4% in 1993.

Transition resulted in uncertainty about the policies that would best suit the

country’s socio-economic transformation and therefore created conditions of choice in

employment policy. Slovenia opted for gradual adjustment, retaining high levels of

social protection for the unemployed in order to achieve a smooth and inclusive

passage to the market economy (Svetlik 1993, p. 196).

The 1991 Employment and Unemployment Insurance Act established widely

inclusive eligibility criteria for the receipt of unemployment benefits and involved

relatively high levels and long duration of benefits (Orazem & Vodopivec 1994, p. 11).

Unemployment insurance was compulsory for all people in employment. The

unemployment benefit covered all those that had been employed for more than nine

months. The duration of unemployment benefit ranged from three months to two

years, depending on the years of employment and age. The level of substitution

reached 70% of the last wage (60% after three months) and could not be lower than

80% of the guaranteed minimum income. After the termination of unemployment

benefit, an unemployed person was eligible for means tested unemployment assistance

for a maximum of three years, including the time that person had been on

unemployment benefit (Svetlik 1992, p. 61). Those out of work who could no longer

claim unemployment benefit or unemployment assistance were entitled to means tested

non-contributory social assistance for an unlimited period, renewable every six months

(National VET Observatory of Slovenia 1999).

Despite the predominance of passive measures, an active approach was also

introduced in the early 1990s (Svetlik 1992). The first active labour market policies

(ALMPs) introduced between 1991 and 1992 involved four categories of programmes,

mainly, wage and job subsidies, self-employment support programmes, training and

public works programmes. Nonetheless, the active labour market policies introduced

operated on a ‘passive’ philosophy: participation of unemployment benefit or

assistance recipients in the active programmes was voluntary (Svetlik 1997, pp. 222–

23), while no effective controls on eligibility were operative (World Bank 1998).

Furthermore, there was a lack of coordination between local social work centres that

administered social assistance and the Employment Service of Slovenia, responsible

for administering both unemployment benefits and active labour market policies.

Vocational education and training was widely perceived to be problematic and its

reform was long overdue in the early 1990s (Svetlik 1993). The weaknesses of the

vocational education and training system were argued to be the rigid and centralised

state regulation of occupational standards, inherited from socialist centralised

planning, and the fact that vocational education and training was school-based only,

with an inadequate practical dimension and weak responsiveness to the needs of

companies and individuals. This was seen by many as contributing to Slovenia’s

significant secondary-school dropout problem and its consequences for youth

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unemployment. Young peoples’ employment rates were low, making them a group in

need of active policy targeting.

The concept of ‘lifelong learning’ featured in the 1995 White Paper on Education,

but had been introduced earlier in policy-makers’ deliberations. It first appeared in

1991, in the context of setting up the Institute for Adult Education, whose task was to

promote the development of ‘lifelong learning’ by research, counselling and

development of educational activities (Republic of Slovenia, Ministry of Education

and Sport 1995). The 1995 White Paper acknowledged the particular importance of

developing a strategy of ‘lifelong learning’ in Slovenia, particularly in view of

demographic factors, and especially Slovenia’s small and aging population which would,

in the future, require adults to retrain more than once for staying in a quickly evolving

work environment, low levels of overall educational attainment, and the phenomenon of

a large population of poorly qualified young adults with low employment opportunities

(Republic of Slovenia, Ministry of Education and Sport 1995).

The core architecture of Slovenia’s unemployment insurance system, which had

been modelled on the German scheme since 1975, was maintained after 1991

(Ignjatovic et al. 2002). It was occupation-based and contributions-based, considering

rights to derive from employment and paid work, and providing for corporatist

management of insurance funds and policy-making decisions, along the lines of a

typical Bismarckian continental welfare regime (Martin & Palier 2008). Tripartite

governance structures were established in the insurance fund for unemployment and

the management board of the Public Employment Service of Slovenia. The active

involvement of the social partners, particularly employers, in setting occupational

standards reviewing curricula, providing training and participating in decision-making

procedures in vocational education and training and adult education was also

institutionalised. Employers and employees were in agreement in ensuring the well-

being of the unemployed in order to maintain their living standards and preserve social

cohesion. The state was perceived as facilitator, coordinator and ultimate guarantor of

the system.

Despite the fact that the unemployment crisis had subsided by the mid-1990s, the

unemployment insurance system had begun to show its limits. By the mid-1990s the

number of registered unemployed was roughly double that measured by Labour Force

Survey data. In 1997, for example, registered unemployment amounted to 14.4%,

while survey unemployment was 7.4% (ESS 1998), which demonstrated that a

considerable number of beneficiaries were not unemployed. Undeclared work and lack

of controls were argued to have rendered the system of allocating benefits inefficient

and extremely costly. Unemployment insurance came to rely principally on state

contributions, while social assistance funding came exclusively from the state budget

(Ignjatovic et al. 2002). The problems had been identified by the mid-1990s and

reforms were deemed necessary. Policy-makers were in search of ideas on how to go

about it.

After the EES

In October 1998, the National Assembly adopted significant changes to the

Unemployment and Employment Insurance Act (Republic of Slovenia 1998). The

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structure of the system was not changed but the duration and level of benefits were

moderately limited, although by no means radically scaled down compared to

neighbouring countries, in line with the Slovenian gradual approach (Kolari�c et al.

2009). The crux of the 1998 reform was that receipt of benefits was made conditional

upon beneficiaries’ availability for employment, their actively seeking a job,

acceptance of any suitable job or participation in any training or other suitable

programme of active employment policy available and their not being found to have

other sources of income or work in the grey economy. The Employment Service of

Slovenia was charged with preparing detailed individual employment plans in

cooperation with each registered unemployed person, inspired by the British model

(Ignjatovic et al. 2002, p. 202). Clearly, core EES ideas, such as raising the

employment rate, activation and ‘making work pay’, had somehow made their way

into Slovenian employment policy.

The next step towards the adoption of EES norms in Slovenia seems to have come

soon after, in the context of the 1999 Background Study for the Employment Policy

Review for Slovenia, conducted under the auspices of the vocational education and

training Observatory of Slovenia, by Slovenian experts (National VET Observatory of

Slovenia 1999). This was the first comprehensive account of the employment policy

situation in Slovenia, clearly written with the EES framework in mind. In the

Introduction there is mention of what is taking place in ‘European countries’, directly

referring to the promotion of active policies, the activation trend, the emphasis on

development of human potential, while the lifelong learning perspective is implied

(National VET Observatory of Slovenia 1999, p. 5). Despite the fact that the EES was

not explicitly mentioned in the National VET Observatory of Slovenia, EES discourse

was clearly used. ‘Employability’ appears 10 times in the text, the word ‘active’ 42

times (as for example in active measures, policies, programmes or approach), the word

‘education’ 326 times and ‘training’ 124 times. A considerable part is dedicated to

grouping existing (at the time) active programmes under the four pillars of the EES,

that is, employability, entrepreneurship, adaptability and equal opportunities

(National VET Observatory of Slovenia 1999, pp. 67–75).

It was on the basis of the Background Study that two key documents concerning the

explicit adoption of the EES framework by Slovenia were published in 2000. The

Strategic Goals of Labour Market Development up to 2006, Employment Policy and its

Implementation Programmes, called for by the Accession Partnership signed by Slovenia

in 1998, were discussed and adopted by the National Assembly in 2000 (Republic of

Slovenia 2000b). The National Strategy appealed to the European ‘global approach’

following from the Treaty of Amsterdam, the EES and the Lisbon Agenda. The global

approach meant bringing together employment, education and economic policies to

create synergies towards the aims of combating unemployment and raising the levels of

employment, by raising the educational level of the population, lifelong learning and

active labour market policies to ensure equity and labour market efficiency. The strategic

goals of labour market development for the period 2000–2006 in Slovenia clearly

mirrored the employment goals set out in the EES (Republic of Slovenia 2000b, pp. 4–6).

A Joint Assessment Paper (JAP) was signed between the Slovenian Ministry of

Labour, Family and Social Affairs and DG Employment in the same year (Republic of

Slovenia, Ministry of Labour, Family and Social Affairs & the European Commission

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2000). Its aim was to articulate: ‘an agreed set of employment and labour market

objectives necessary to advance the country’s labour market transformation, to make

progress in adapting the employment system so as to be able to implement the

Employment Strategy and to prepare it for accession to the European Union’

(Republic of Slovenia, Ministry of Labour, Family and Social Affairs & the European

Commission 2000). The single most pressing problem identified in the Slovenian JAP

was the implementation of vocational education and training reform. Progress on the

establishment of active labour market policies, tightening of eligibility for benefits and

controls, activation, the introduction of a first phase of vocational education and

training reforms and structures for lifelong learning were hailed in the JAP as

important steps in the ‘right’ direction. The general thrust of the paper was that all the

important reforms had indeed been introduced, though they needed to be further

strengthened, pursued and implemented. It was, therefore, not a question of revisiting

the basic employment policy principles, norms and ideas, but of further proceeding

down the road already taken.

A 2002 comparative research project on Slovenian and Hungarian employment and

training policies, which commenced in 1999, noted how ‘lifelong learning’ was

certainly present in policy discourses in 1999, but it was not as predominant as in 2002

when the project was completed (Grootings 2002, p. 7). There was also evidence that

under the EES framework, the conceptual link between employment and vocational

education and training or ‘lifelong learning’ policies was strengthened after the late

1990s, under the influence of the EES and the Lisbon Agenda (ETF 2003, pp. 71–72).

Finally, Vidmar has noted ‘a remarkable shift from passive to active measures to

combat unemployment’ after the adoption of the EES (Vidmar 2001, p. 3). Stanojevic

drew on Ministry of Labour data from 2001 to demonstrate the gradual equalisation

of funding for passive and active measures which took place from the second half of

the 1990s to the first years after 2000, showing that this was achieved mainly by

reducing the amount spent on passive policies. He associated this development with

the Employment Strategy (Stanojevic 2004, pp. 364–67).

It becomes clear that while the first active labour market policies and the concept of

‘lifelong learning’ had been introduced in Slovenia from 1991, that is, before the EES

was established, it was not until the 1998 Unemployment Act that a clear conceptual

shift from passive to active employment policies took place and the discourse of

‘making work pay’ was introduced, while a closer link between education and work

was drawn between 1998 and 2002. The 1998 Law on Changes marked a strong

agenda shift from dealing with unemployment to raising the employment rate,

activation and retraining, ‘making work pay’ and the preventive approach. A clear

shift in the policy reform agenda from passive to active measures and substantive

policy change in line with those shifts were clear consequently soon after 1998. The

1998 Law on Changes seems to be the crucial milestone marking the impact of EES

‘employability’ norms upon Slovenian employment policy. It ignited considerable

policy change.

According to the normative resonance hypothesis, adoption of EES norms should

not have been easy as they did not ‘fit’ well with Bismarckian principles. In particular,

the cutbacks on the levels and duration of unemployment benefits and the

introduction of sanctions were in the direction of changing the purpose of

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unemployment insurance from maintaining the standard of living of the unemployed

to averting poverty while providing incentives and opportunities for the unemployed

to return to the job market. Such policies emphasise individuals’ responsibility as

citizens to work and retrain rather than the responsibility of the social partners to

contribute to social cohesion by supporting the living standards of the unemployed.

Yet, change did occur and EES norms were adopted.

Mechanisms of ‘soft’ Europeanisation

Was this an occurrence of ‘soft’ Europeanisation? In other words, can the adoption of

EES norms be linked in any way to mechanisms of ‘soft’ Europeanisation? The ‘soft’

mechanisms through which, it has been argued, the EES influences national policy can

be distinguished between ‘bottom-up’ mechanisms, such as voluntary policy learning,

mimicking and creative appropriation of the EES nationally whereby domestic actors

are empowered to exploit misfits in policy norms in order to pursue reforms (Zeitlin

2009), and ‘top-down’ mechanisms, such as ideational or institutional diffusion,

socialisation through discourses or peer pressure and shaming (Buchs 2007, pp. 22–

26). In the case of ‘bottom-up’ mechanisms the country voluntarily emulates or ‘draws

lessons’ from EU policies to improve its own policies by acquiring additional material

or symbolic resources to implement a domestic reform agenda (Jacoby 2004). In the

case of ‘top-down’ mechanisms, the EU encourages normative convergence with the

relevant EU policies. Drawing a distinction between ‘bottom-up’ and ‘top-down’

mechanisms of soft Europeanisation does not imply that the processes involved are

mutually exclusive. Rather, the two can, on many occasions, be seen to work in

parallel, as is often pointed out in the literature (Trubek & Trubek 2005).

Voluntary lesson drawing (bottom-up)

Even before the EES, Slovenian policy-makers in the employment field actively

engaged in what Dolowitz and Marsh have called ‘voluntary bilateral policy transfer’

(1996, pp. 345–46) from other West European countries. In the 1970s, Slovenian

policy-makers had modelled the system of unemployment insurance on the German

system (Ignjatovic et al. 2002). In the late 1980s and early 1990s, Ivan Svetlik, a

leading Slovenian academic (and who was appointed Minister of Labour in November

2008) who was well acquainted with Scandinavian experience, introduced the concept

and practice of active labour market policies into academic debate. This discussion

was soon taken up by government officials in the Ministry of Labour, Family and

Social Affairs which led to the swift setting up of Active Labour Market Policy

programmes in the late 1980s and early 1990s.2 The early 1990s was also a period of

intensive bilateral learning, initiated by Slovenian policy-makers from the Ministry of

Labour and the Employment Service of Slovenia, particularly with regard to the

design and implementation of active labour market policies, ideas having been drawn

largely from Germany, Austria, Sweden, Finland and Ireland. Visits and the

organisation of workshops meant to lead to mutual learning and the exchange of

2Interview with Official D—former Ministry of Labour Adviser, 9 December 2003, Ljubljana.

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best practices have continued unhindered since, often making use of PHARE funding

after 1995, and for the most part initiated by Slovenian experts.3

The introduction of ‘activation’ and ‘making work pay’ concepts reflected in the

1998 Act can be attributed primarily to the ideational ‘pull’ of the first Luxembourg

Guidelines, announced in 1997 (European Council 1997). One policy maker

mentioned in interview that they thought Slovenian employment policy was influenced

by the EES partly because this would be ‘the way Slovenian policy would need to go

anyway, since it was going to join the European Union’,4 which appeared to imply

that in accession countries ‘soft’ Europeanisation functions as if it were ‘hard’

Europeanisation in practice (Grabbe 2003). However, further inquiry revealed that it

was the ‘pull’ rather than the ‘push’ factor that made the difference.

The Guidelines were considered the ‘latest international document’ which policy-

makers thought it important to take into account in order to be up-to-date with

contemporary policy trends.5 They were perceived by policy makers as ‘an

inspiration’, a valuable policy narrative, which they felt enriched their thinking

about the general direction and principles that policy change should take.6 The

perception that domestic change was needed was already established, given the

problems with the system of unemployment insurance that had become clear by

the mid-1990s. The EES guidelines ‘met’ the lack of a clear direction for reform on

the part of policy makers.7 Policy makers clearly pointed out that EES norms

‘would have been adopted anyway’, that is, independently of the country’s

prospective accession to the European Union, as they were thought to be the most

attractive option available for domestic reform at the time.8 Voluntary policy

transfer therefore seems to have been the primary force at work, a key mechanism

of ‘soft’ Europeanisation.

Diffusion and socialisation (top-down)

The aim of the JAP process was diffusion of EES norms and socialisation of policy

elites into EES norms and practices. The implementation of JAP priorities was

monitored by the Commission and regular evaluation on the progress made was

conducted in special seminars that took place on an annual basis. These were

accompanied by a thorough reporting procedure from the Slovenian side, which

included annual analytical Implementation Reports and Progress Reports, monitoring

the labour market policy, programmes and future activities (Republic of Slovenia,

Ministry of Labour, Family and Social Affairs 2003, p. 3).

As of 2000, Slovenia started to shadow the EES by periodically producing National

Action Plans, as provided for in the National Strategy and called for by the JAP

3Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.4Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.5Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.6Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.7Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.8Interviews with Official A—Slovenian Ministry of Labour, 13 July 2004, Ljubljana; Official E—

former Ministry of Labour Adviser, 15 January 2004, Ljubljana; Official C—Employment Service of

Slovenia, 21 January 2004, Ljubljana.

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process. The JAP process itself was proposed to the European Commission by the

Slovenian Minister of Labour at the time, Anton Rop.9 The aim was to ‘practise for

the real thing’, that is, for participation in the EES coordination process upon

membership.

The 2000–2001 National Employment Action Plan (Republic of Slovenia 2000),

built around the four pillars of the EES, addressed Slovenia’s policies that fell

under the relevant guidelines analytically and set in many cases specific quantitative

targets towards the realisation of its own programmes falling under the EES

guidelines for the specific year. Two officials in the Slovenian Ministry of Labour

were responsible for drafting the plans in close cooperation with the Employment

Service of Slovenia. Danish officials were based in the Ministry to help with

developing indicators in the context of a twinning exercise during 2003. Their

contribution was not deemed very helpful however, as they ‘did not always

understand the local context’.10 The social partners were also involved in the

preparation of the NEAPs, while an annual reporting procedure to the National

Assembly was envisaged.

In the first instance, implementing the JAP practically meant little more than

‘repackaging’ national policy. According to one experienced practitioner: ‘We fit the

policy programmes already running into the relevant boxes under the EU’s

employment guidelines’.11 Ministry officials pointed out that this process was seen

as ‘cumbersome, but necessary’, particularly since the European Commission was

systematically ‘monitoring’ the process. In the context of adapting to the EES, the

Ministry of Labour also engaged in horizontal coordination with other ministries,

such as the Ministries for Education, Health and Finance, a practice they were not

accustomed to.12 Yet, in due course, particularly as the first NAP (2004) was being

prepared, the prominence of these ideas, as well as the validity of linking them one to

the other, was further reinforced in the context of domestic employment policy

discourse, policy priorities and policy programmes, given the extra boost of legitimacy

they received from the fact that they could be shown to be associated with the

European Employment Strategy. ‘Lifelong learning’ and the activation trend are two

examples.

Clearly, despite the lack of normative resonance, ‘soft’ Europeanisation was the

key force at work in the Slovenian policy reforms of 1998 and the years

immediately following that reform. Mechanisms of ‘soft’ Europeanisation mattered,

both ‘bottom-up’ and ‘top-down’. Bottom-up mechanisms, particularly voluntary

policy transfer from the EU, were crucial in the initial cognitive and agenda shifts

that occurred, while top-down mechanisms, in particular diffusion through the JAP

process which involved periodic monitoring by the European Commission, initially

led to policy ‘repackaging’ but gradually served to further legitimate change,

socialise policy makers and contribute to the justification of policy shifts in line

with those changes.

9Interview with Official A—Slovenian Ministry of Labour, 13 July 2004, Ljubljana.10Interview with Official A—Slovenian Ministry of Labour, 13 July 2004, Ljubljana.11Interview with Official C—Employment Service of Slovenia, 21 January 2004, Ljubljana.12Interview with Official A—Slovenian Ministry of Labour, 13 July 2004, Ljubljana.

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Domestic mediating factors

If, as demonstrated above, despite the lack of normative resonance ‘soft’

Europeanisation did occur in Slovenian employment policy, the next challenge is to

understand why. We thus turn our attention to the domestic factors that can be

expected to mediate change, focusing on the political economy and domestic

consensus.

Political economy

Sleegers draws on a comparison of Latvia, Hungary and the Czech Republic, to

identify low dependency on international capital as a factor that renders candidate

countries more susceptible to EU rather than World Bank influence on labour market

policy reform (Sleegers 2005). Mailand, on the other hand, drawing on a comparison

of Denmark, the UK, Spain and Poland, finds that structural dependence on the EU

can be expected to facilitate EES induced ‘soft’ Europeanisation (Mailand 2009, p.

167). Can these findings be confirmed in the Slovenian case?

As part of Yugoslavia the Slovenian economy consistently achieved the strongest

economic performance among all of the federal states and it was no surprise that

independent Slovenia soon achieved the highest levels of per capita income among all

Central and East European countries in the early 1990s, comparable to that of the less

developed EU member states (Brinar & Svetli�ci�c 1999). From the early 1990s, Slovenia

enjoyed low levels of external debt, had low levels of FDI given that privatisation was

mainly internal, and achieved a balanced budget and a stable currency (Silva-Jauregui

2004).

There is clear evidence that the Slovenian political and policy-making elite were in a

position to disregard external pressures from the Bretton Woods institutions to adopt

economic and social policy reforms that went against their policy preferences, which

was not the case for most other post-socialist countries (with the exception of the

Czech Republic). This is demonstrated by the fact that despite strong World Bank

advice to implement ‘shock therapy’ in the early 1990s, that advice (notably by

Professor Jeffrey Sachs) which involved radically scaling down unemployment benefits

and tightening eligibility criteria for the receipt of such benefits was rejected by

Slovenian policy-makers.13 Drastic reforms in this direction were made in most other

Central and East European countries at the end of 1991 under the influence of the

World Bank (Palpant 2006, p. 14). The strength of the Slovenian economy and

prudent macroeconomic management meant that Slovenia was not subject to high

levels of dependence on international capital markets. The country did not have major

debts to the World Bank which meant that the institution had ‘no muscle’ over

Slovenia.14 This can explain why Slovenian policy-makers could afford to disregard

World Bank advice.

On the other hand, the eagerness of Slovenian policy-makers to adopt or emulate

EU economic, social and employment policies was equally evident. This can be related

13Interview with Official E—former Ministry of Labour Adviser, 15 January 2004, Ljubljana.14Interview with Official E—former Ministry of Labour Adviser, 15 January 2004, Ljubljana.

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to the economic and political advantages Slovenia stood to gain by joining the

European Union. The Slovenian economy is a small, open, export-oriented economy

located near the EU geographical centre. It relies by and large on external trade with

other EU countries, in particular Austria, Germany, France and Italy. Slovenia is also

regaining former Yugoslav markets and making inroads into South East European

markets, all of which are lined up to join the EU. The country’s long-term economic

interest has clearly been to secure full access to the common market.

In political and symbolic terms Slovenia was anxious to disassociate itself from the

instability that was spreading in the Balkans when it gained its independence from

Yugoslavia in 1991. Furthermore, it was thought that as a small country of two

million people Slovenia could only ensure a degree of sovereignty and exert some

policy influence at the international level by joining a larger regional bloc (Brinar &

Svetli�ci�c 1999, pp. 805–6). Joining the European Economic Area or engaging in closer

cooperation with other Central and East European countries were possible

alternatives, but going down either of those routes would mean that Slovenia would

not participate in making the rules of the single market and EMU. In political

economy terms, the EU was thus seen as the only attractive ‘game in town’.

Interview evidence confirms that the Ljubljana policy community in its largest part

was, throughout the 1990s, more open to suggestions from the EU while reacting more

cautiously towards the advice of experts coming from the World Bank.15 This seems to

have been the case also regarding employment policy. The 1998 changes were

influenced by Slovenian experts, some of whom had worked for the World Bank and

promoted the liberal model, but had however been seconded to the Slovenian Ministry

of Labour, Family and Social Affairs by the European Union between 1994 and 1998.16

In the early 1990s, at the peak of the unemployment crisis, World Bank experts had

advocated radically scaling down unemployment benefits and introducing strict controls

but their recommendations were disregarded. By the mid-1990s, as pointed out above,

the system of unemployment insurance was ‘ripe’ for reform and policy-makers were in

search of new ideas. It was only when the newly aired Luxemburg Guidelines pointed

towards solutions that coincided with World Bank experts’ advice on the issue of

reducing the generosity and length of unemployment benefits and activating passive

measures (National VET Observatory of Slovenia 1999), that the Slovenian policy-

making community as a whole became more receptive to these solutions.

There are strong grounds here to argue that the key features of the Slovenian

political economy, mainly the country’s low dependence on international financial

capital and the structure of trade, had some influence on policy-makers’ approach to

external policy advice. That approach can be summarised as being ‘negative’ toward

World Bank or IMF advice and ‘positive’ towards EU advice. The structural political

economic factors pointed out by Sleegers and Mailand can thus be considered

important mediating factors that facilitated the ‘soft’ Europeanisation of Slovenian

15Interviews with Official E—former Ministry of Labour Adviser, 15 January 2004, Ljubljana;

Official B—Association of Employers of Slovenia, 26 January 2004, Ljubljana; Official F—Slovenian

Trade Union Confederation, 7 September 2004, Ljubljana; and Official A—Slovenian Ministry of

Labour, 13 July 2004, Ljubljana.16Interview with Official E—former Ministry of Labour Adviser, 15 January 2004, Ljubljana.

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employment policy because they rendered Slovenian policy-makers more susceptible

to the ‘pull’ of the EES.

Domestic consensus

What stands out with regard to Slovenian policy-making in the employment field over

the period under examination (1991–2004) is its consensual character in both

substantive and procedural terms. Consensus on the broad parameters of employment

policy was evident in the policy narrative of the ‘social market economy’ and the

imperative of ‘social cohesion’ shared by the key actors involved in policy-making

decisions. Consensual, corporatist decision-making procedures determined policy

outcomes, including the 1998 Law on Changes which, as argued above, was the key

reform in the direction of the EES. Substantive consensus on employment policy can

be expected to act as a barrier to EES-induced change where there is a lack of

normative resonance (Mailand 2009, p. 167), as it was the case in Slovenia before 1998.

Furthermore, the institutional setup of Slovenian employment policy-making, which

involves multiple ‘veto points’, can also be expected to compound the obstacles to

policy change (Haverland 2000). The question that arises is why these factors did not

turn out to constitute obstacles to policy change.

The emergence of policy and policy-making consensus on employment policy in the

early 1990s must be understood against the background of national state formation.

Secession from Yugoslavia was a bold undertaking that would require Slovenian

political and economic elites to secure nothing short of domestic consensus on most of

the important decisions among political groups and the population at large (Sustersi�c

2004, p. 402). While the early moderate and reformist stance of the League of

Communists of Slovenia (Zveza Komunistov Slovenije, ZKS) allowed the gradual

liberalisation of the political system and the free expression of civil society

organisations from the 1980s, the wave of strike action that peaked in the last years

of the 1980s and the early 1990s under the first elected government of Slovenia,

composed mainly of newly formed parties of the centre-right, threatened to undermine

unity.17

The strikes were led by Slovenian trade unions which had emerged upon the

country’s independence, and which were distinctive among their Central and Eastern

European counterparts for their strength and unity (Galgoczi 2004), due to the

centralised structure of collective bargaining, the relatively high level of unionisation

of Slovenian workers and their capacity to mobilise their members in industrial action

over the period under discussion. The largest trade union, representing the majority of

private sector workers mainly from the manufacturing industry, the Association of

Free Slovenian Labour Unions (Zveza svobodnih sindikatov Slovenije, ZSSS), was a

reformed union from the communist period. Smaller trade unions, most of which

emerged after regime change in the early 1990s, such as the Independent Trade Union

(Konfederacija novih sindikatov Slovenij—Neodvisnost, KNSS), PERGAM 9 (Konfe-

deracija sindikatov Slovenije PERGAM, KSS–PERGAM), Trade Union Confedera-

tion 90 of Slovenia (Konfederacija sindikatov 90 Slovenije, K-90), the Alternative Trade

17For further discussion see Stanojevic (1997).

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Union (Alternativa) and Solidarity (Solidarnost), represented mainly public sector

workers (Stanojevic 2004).

The 1992 elections signified a decisive shift in voters’ preferences to the centre-left

and the emergence of the political forces that would dominate the party system

throughout the period under examination (Fink-Hafner 2006). The centre-left Liberal

Democracy of Slovenia (Liberalna demokracija Slovenije, LDS), successor to the

reformist Alliance of Socialist Youth of Slovenia (Zveza socialisti�cne mladine Slovenije,

ZSMS) which had played the part of internal opposition over the last years of the

previous regime, turned out to be the largest and most influential party, a necessary

partner for the formation of any coalition government almost uninterruptedly from

1992 to 2004 (Fink-Hafner 2006). Other major parties that at different times joined the

LDS in government were the United List of Social Democrats (Zdruzena Lista

Socialnih Demokratov, ZLSD), itself a successor party to the former Slovenian League

of Communists, and the new centre-right parties of the Social Democrats of Slovenia

(Slovenska demokratska stranka, SDS), the Slovenian People’s Party (Slovenska

ljudska stranka, SLS) and the Slovenian Christian Democrats (Slovenski krs�canski

demokrati, SKD) (Luksi�c 2003, pp. 522–23).

The coalition government that assumed power in 1992, comprising the LDS, the

Greens of Slovenia (Zeleni Slovenije, ZS) (which soon became irrelevant) and parties

of the moderate centre-right, engaged in political exchange with the trade union

movement which involved adopting core elements of their preferred policy, such as the

maintenance of high levels of protection for the unemployed, extensive early

retirement schemes, a cautious liberalisation of the labour market, and slow, and by

and large, internal privatisation of the state-owned enterprises (Stanojevic 1997, p.

248; Feldmann 2006; Lindstrom & Piroska 2007). These policies, which were framed

initially in the context of national unity, reflected the social democratic preferences of

the majority of the population and the dominant political forces, the salient political

narrative being the ‘social market economy’, that is, the need to balance economic

growth with social cohesion in order to preserve fairness and social harmony despite

transition to the market economy (Cox 2005, p. xi).

The type of privatisation that was pursued, which was internal and included a

significant proportion of worker and manager ownership of companies, as well as

ownership by state controlled funds, determined the structure of company ownership

in Slovenia. Managers, in a strong position before transition under Yugoslav ‘self-

management’, retained much of their influence and were able to use informal networks

which operated under the Yugoslav system between government officials and company

management structures to gain access to ownership of some of the most successful

companies (Sustersi�c 2004). The new structure of ownership and pre-existing networks

partly ensured that the employers’ side of the social dialogue would be accommodat-

ing to government and trade union policy preferences. The Chamber of Commerce

and Industry of Slovenia (Gospodarska Zbornica Slovenije, GZS), membership of

which was compulsory throughout this period, served as the main interlocutor on the

employers’ side until 1994. The Slovenian Employers’ Association (Zdruzenje

delodajalcev, ZDS), whose membership was voluntary and which represented the vast

majority of large companies in Slovenia, was formed in 1994 with the aim of replacing

GZS in due course. In a similar vein, the Slovene Chamber of Crafts, representing the

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interests of small enterprises and independent craft businesses, encouraged the

formation of the Slovene Association of Crafts. There was considerable membership

overlap between the four organisations (Stanojevic 2004).

The political and policy consensus that emerged in the early 1990s was

institutionalised in the structure of the political system and the system of industrial

relations. The Slovenian political and party systems were formed between 1988, when

the first law liberalising party competition was passed by the reformist Slovenian

League of Communists still under Yugoslavia, and 1991, when Slovenia adopted its

first Constitution (Fink-Hafner 2006). Slovenia is a unitary state with an elected

president and a bicameral parliamentary system. The National Assembly elects 90

MPs by proportional representation every four years with a 4% threshold, while the

National Council consists of 70 representatives of social partners and professional

associations (Krasove�c & Lajh 2004). A multi-party system and coalition governments

dominated by the centre-left but spanning both centre-left and centre-right became the

norm in Slovenian politics from the early 1990s.

In 1994 the tripartite corporatist regime of consultation and consensual decision-

making procedures that had emerged as a result of agreement between the political

elites and the social partners became formally institutionalised in the Economic and

Social Council, as well as in all independent or governmental authorities that

determine economic and social policy-making in Slovenia, including employment

policy-making. Any law proposed to the National Assembly that encroaches on

economic or social policy is required to come with the opinion of the Economic and

Social Council, where each of the three parties represented (government, employers

and employees) hold five seats and collectively one vote. Decisions in the ESC are

made unanimously (Stanojevic 1997).

By the mid-1990s, Slovenian employment policy-making was effectively depoliti-

cised, handled by an efficiency-oriented epistemic community (Haas 1992), operating

under a broad political consensus publicly legitimated in terms of the social market

economy which involved extensive consultation of the social partners. All interviews

point to a group of 200 people (experts, officials, social partner representatives) with a

special interest in economic, social and employment policy, meeting regularly at

various conferences, in policy-making contexts and at international events, sharing

problem definitions, information and values. Members of the policy community were

participants in transnational policy networks but they also could be seen to ‘band

together’ in the context of those networks to defend or present the ‘Slovenian

position’.18

Clearly, this did not mean that specific policy disagreements did not exist, but

simply that they were resolved consensually. Sharing common overarching values and

operating in an institutional context that could facilitate compromises would not have

been enough to secure consensus on policy change. On the contrary, both of these

features could privilege the maintenance of the status quo unless actors felt bound to a

norm of seeking consensus for change. It could be argued that consensus-seeking

norms were a part of Slovenia’s political culture. Slovenes mistrust party politics. One

explanation that has been put forward is that until 1991 Slovenia was never an

18Interview with Official F—Slovenian Trade Union Confederation, 7 September 2004, Ljubljana.

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independent state, but always a member of large multi-ethnic states including the

Austro-Hungarian Empire and the First and Second Yugoslavia. Its representatives to

the central decision-making institutions were always felt to be far removed from the

concerns of the people and essentially self-serving. Instead, Slovenes share a

generalised sympathy for functional representation, or else, the strong belief that

politics should not be about one group grasping power but about cooperative

expression and mutual accommodation of all legitimate interests. This was expressed

in Slovenia’s institutional legacy which incorporates elements of catholic corporatism,

collective functional representation, the traditions of socialist councils and Yugoslav

‘self-management’ long before the country’s independence (Luksi�c 2003). The new

system of political and institutional intermediation that emerged in independent

Slovenia could be argued to have both expressed and reaffirmed norms of searching

for consensus.

The Ministry of Labour had throughout independence been headed by ministers

coming from the parties of the centre-left, for the most part, by the reformed

communists, the United List of Social Democrats (ZLSD), a party that retained

close links with the main trade union (ZSSS) and sought to preserve as much as

possible the gains of socialism, opposing any diminution of social rights. Between

1996 and 2000 the ZLSD had left government but supported the LDS-led

coalitions in the parliament. In 1997, while in opposition, the ZLDS elected a new

leader, Bohut Pahor, who transformed the party into a party of the Third Way,

under the influence of British New Labour. At the time of the 1998 reform it was

Anton Rop, a senior LDS minister, that was in charge of the Ministry of Labour.

The LDS, a left-leaning liberal party, was keen on moderate liberalisation of the

economy and the labour market, Europeanisation and globalisation (Cabada 2005,

pp. 155–56), while being a central contributor to the ‘social market economy’

agenda.

Regarding employment policy, the Ministry, whose policy makers had become

subject to the ‘pull’ of the Luxembourg Guidelines, had greater expertise and

experience at hand with respect to the social partners. The latter had been mostly

involved in wage bargaining negotiations as well as with labour law reform in the

tripartite institutions such as the Economic and Social Council, while the broader

issues of employment policy were not at the top of their agenda (Stanojevic 2004, p.

370). While at an advantage in this respect vis-a-vis the social partners, the Ministry

nonetheless proposed a moderate activation reform agenda aimed at compromise. The

reform was framed principally in terms of domestic policy change rather than

adherence to European norms.

The consultations that took place on the 1998 changes with the social partners in the

context of the Economic and Social Council involved both the generosity and duration

of benefits and the quality of the jobs that the state should legitimately pressurise

the unemployed into accepting at the cost of cutting unemployment benefits. The

government promoted what was a moderate scaling down of passive policies on the

grounds of cost and operational efficiency as well as the new activation principle.

Trade unions insisted on the maintenance of the insurance principle and job quality,

but accepted the cutbacks on levels and duration of benefits and the activation

principle (Kopa�c 2002, pp. 5–6). Employers were in favour of the proposed changes

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and had no objections to the activation principle insofar as the reforms did not raise

labour costs on the whole.19

In 1998 the Slovenian consensual system of employment policy and policy making

became exposed to the ‘pull’ of the EES through the Ministry of Labour’s policy

makers and ‘soft’ Europeanisation ensued. The government and social partners came

to the table with similar values but different policy priorities for change which meant

that the 1998 reforms could have been openly contested. The trade unions in particular

could have contested change on the grounds of the shared social cohesion imperative,

as they were assertive and very much capable of staging opposition to reforms if need

be outside the tripartite fora. The decision-making procedures in place provided

multiple ‘veto points’ for the key actors involved had they chosen to block change.

That they did not is due to the fact that all parties were willing to seek compromise,

which was reflected in the outcome, an outcome that was accepted by all parties as

respecting the shared ‘social cohesion’ imperative.

The mediating factor for ‘soft’ Europeanisation was ultimately neither the

preferences of the key policy-making actors nor the architecture of the decision-

making framework as such. It was rather the norm of ‘searching for consensus’ that

can be argued to underlie the behaviour of key actors as well as the choice of political

and social institutions (Cox 2005, p. 153). It thus seems to have been Slovenian

political culture which facilitated change because change was legitimated through

consensus seeking, despite the lack of normative resonance between EES norms and

national policies.

Conclusions

This case study confirms that the mechanisms of ‘soft’ Europeanisation can bring

about change rather than simply reinforce pre-existing policy paths (Zeitlin 2009). It

demonstrates that normative resonance is not a necessary condition for ‘soft’

Europeanisation (Falkner et al. 2005), pointing instead to the idea that soft

Europeanisation can occur in the absence of normative resonance between EU and

domestic norms where other key domestic factors are favourable. With regard to the

domestic factors in question, the core finding of this study is the importance of

political culture, in particular the deeply rooted consensus-seeking norms, in the ‘soft’

Europeanisation of Slovenian employment policy. This finding lends strength to

Katzenstein’s argument regarding the significance of the cultural aspect of consensus,

or the deeply rooted norms of search for consensus (Katzenstein 1985) for facilitating

political change in the small corporatist states of Central Europe, as opposed to the

importance of consensus-oriented institutions (Lijphart 1999) which are argued to

render change slow and cumbersome.

Political economic factors, including the low dependence on international capital

and the structure of trade, were also crucial for ‘soft’ Europeanisation of Slovenian

employment policy because they rendered policy makers more susceptible to the ‘pull’

of European norms. The Slovenian case, whose policy makers were as eager to

19Interviews with Official B—Association of Employers of Slovenia, 26 January 2004, Ljubljana; and

Official D—Former Ministry of Labour Adviser, 9 December 2003, Ljubljana.

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disregard World Bank advice as they were to adopt advice coming from the EU,

confirms the findings in the comparative literature. It is not easy to decide if it was the

political economy or the political culture that was most important as domestic

mediating factors that facilitated ‘soft’ Europeanisation; they seem to be complemen-

tary. Norms of consensus seeking on employment policy alone might not have

facilitated change if the policy-making elites had not been susceptible to the ‘pull’ of

European norms. Likewise, the ‘pull’ of Europe might not have been sufficient for

‘soft’ Europeanisation if EES-induced changes had been politicised and publicly

contested.

Coming to the mechanisms of ‘soft’ Europeanisation, a number of scholars have

argued that there is no domestic impact of the EES without it being strategically used

by domestic actors who aim at furthering their own purposes, whether this means that

it is the government’s hand that is strengthened to pursue unpopular reforms or non-

governmental actors contesting government policy (Zeitlin 2009, pp. 231–33). This

does not preclude the possibility that domestic actors are socialised in EES norms at

the same time or in due course. What it does imply however is that contestation rather

than consensus between domestic actors is a necessary part of the process. The case of

Germany, where there was a similar lack of normative resonance between domestic

and EES norms, is an example of contested EES-induced ‘soft’ Europeanisation (Picot

2009).

The Slovenian case tells a different story. The key mechanisms of ‘soft’

Europeanisation seem to have been ‘bottom-up’ voluntary policy transfer com-

pounded by the ‘top-down’ socialisation effects of the JAP process. Both involved a

national policy community united in agreement rather than creative appropriation of

the EES by strategically oriented actors who strive to overturn the current policy

defended by other strategically oriented actors.

The Slovenian case may thus raise questions about the relative impact of ‘soft’

Europeanisation by consensus with regard to contested ‘soft’ Europeanisation.

Further comparative research could explore the possibility that consensual change

leads to ‘deeper’ Europeanisation. Consequently, in the light of the Slovenian case one

might reflect on the aims of different mechanisms of ‘soft’ Europeanisation in the

context of the EES. Given that the architecture of the ‘soft’ approach is currently

under scrutiny, it might be useful to think about which of these mechanisms encourage

domestic consensus and which, on the contrary, are likely to encourage domestic

actors to contest current arrangements.

University of Glasgow

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