Economic recovery 'in spite of' European Commission, says economist

Ljubljana - Last year Slovenia was tipped as the next bailout candidate after Cyprus and faced one of the highest borrowing costs in the eurozone. Now, on the eve of EU elections, the experience has sparked a pre-election debate among MEP candidates.

On the left, it is an economist who has the sharpest views. Joze Mencinger, well known domestically, was one of the minds behind the country's privatisation model in the 1990s and was vice-president in the first government after Slovenia's independence from Yugoslavia in 1991.

Last month he decided to stand in the EU elections, running for Positive Slovenia, a member of the pan-European Liberal group.

Among those most likely to end up with a seat in the European Parliament, he stands out for his critical approach which makes him a "eurosceptic" among his peers.

"Yes, I am eurosceptic if this means I am not thinking with the head of [European Commission chief] Barroso, but with my own. And if I don't enthusiastically accept everything that the European Commission does," says Mencinger.

"Why should the European Commission be more untouchable than the Yugoslavian government was or any other government?" he adds.

His opponents, such as Milan Zver i from the main centre-right opposition party, defend the commission's policies. According to Zver, a bailout for Slovenia "would have been a better solution for the country".

Another of his critics, Lojze Peterle from the centre-right NSI+SLS party, believes that the European Commission was successful in Greece.

Mencinger disagrees. "If this is a success, I don't know what failure is." The country's public debt has risen from 113 to 177 percent of GDP, unemployment from 7 to 27 percent and youth unemployment to 60 percent.

"I agree that there is a slow revival of EU economies. However, this has not happened because of the European Commission, but in spite of it."

According to the economist, the commission's approach to the crisis was fundamentally wrong, particularly the focus on austerity measures and "blaming the public sector for the mistakes of the private sector".

It was "completely incomprehensible" why the commission ignored the "demand" side of the economy since "extreme savings just prolong and deepen the crisis".

During Communist times Mencinger fought against the ruling ideology.

Now he sees prevailing patterns of beliefs governing the EU. "Take privatisation for example. The current calls for privatisation in Slovenia or Greece are without economic grounds and are ideological in the same way nationalisation was in my own country during communism in 1948."

The euro too has changed, moving from something that was above doubt to becoming a burden.

Mencinger has doubts about the steps being taken to protect the eurozone from future crises.

"This not a union, but a regime where the strongest set the rules and reject any kind of redistribution."

He predicts that the banking union, as often happened in communism, "will end up as a huge administrative institution, which does not improve the banking system".

Mencinger says that one of the consequences of the wrong EU policies is the rise in extreme parties.

"For extreme right parties, crisis is an opportunity. They can get followers with simple solutions among people who have lost their jobs," he says.

"People in distress search for scapegoats and extreme right parties offer them foreigners, immigrants and different minorities. The European commission is, because of the mistakes it made, at least partially responsible for this."

In Slovenia itself opinion polls suggest a possible comeback for the national SNS party, led by Zmago Jelinic.

For Mencinger, Europe is at a crossroads and "more rules will not transform a bad system into a good one. Imposing the same rules on a diverse system is as wrong as if we apply different rules to a uniform system."

He believes the main dilemma lying ahead of the bloc is a decision on whether to move ahead to federalise Europe or to return to a customs union.