We would like to thank Joachim Becker, Johannes Jäger and Cédric Durandas well as the reviewers for helpful comments. Responsibility for the final outcome is entirely ours.

Introduction

1The article explores the elements that led Slovenia to face another major crisis less than twenty years after its exit from the crisis-ridden Yugoslavia in order to embark on the road of convergence with the core European countries on a formally independent basis. At the background of a severe crisis that hit the region after 2008, there are few who would doubt about the unsustainability of the Slovenian accumulation pattern, established during its integration in the European Union (EU) (2004) and the Economic and Monetary Union (EMU) (2007). The studies that departed from the dichotomist and rationalist framework of the initial Varieties of Capitalism paradigm to embrace one or another analytical stream within a broader post-VoC comparative institutionalism (Bruff and Ebenau, 2014, p. 7) have already discussed the mechanisms of the vulnerability of the Slovenian economy, namely its dependence on exports and foreign finance (Myant and Drahokoupil, 2011, Bohle and Greskovits 2012, Becker and Jäger 2012). What is more, these weaknesses were not exclusive to Slovenia but were common to growth trajectories of all Central and Eastern European countries (CEECs), despite heterogeneous domestic institutional arrangements.

2It is nonetheless worth scrutinising why the Slovenian finally nonviable economic regime proved to be relatively stable in comparison with rest of the region for almost two decades. In contrast to most of other CEECs that entered another crisis by the late 1990s, Slovenia recorded unbroken economic growth until the late 2000s. Moreover, this renewed crisis played an important role for the development of a peripheral FDI-led capitalism in many CEECs (Drahokoupil, 2009, Pula 2016). Slovenia, however, has been known for its lower dependence on FDI, especially in the banking sector. In 2007, foreign banks’ market shares reached almost 85% on average in Viségrad, while in Slovenia domestic actors controlled over 70% of shares on domestic markets (Raiffeisen Research, 2008, p. 27-35). Nonetheless, the country was much more hit by the outbreak of the post-2007/08 crisis than the Central East European countries. Slovenian GDP went down by almost 9% in 2009, while the Visegrád economies contracted by 3.5% on average (Eurostat).

3To understand the Slovenian developmental puzzle, this analysis combines and adapts dependency and regulationist approaches. The proposed framework has already been used by (mostly Vienna-based) scholars examining the asymmetrical interaction of European economies. This contribution complements these comparative studies by demonstrating the explanatory strength of the proposed theoretical approach in exploring the changing conditions of dependency of a singular country at the European post-socialist periphery. Indeed, Slovenia has for a long time enjoyed the status of a good pupil of the European eastward enlargement, although the country’s trajectory contradicted in many ways the European neoliberal policy directives. In fact, the EU commission constantly criticized Slovenian leadership for not having liberalized enough the economy. The vulnerability of the Slovenian economy towards the outbreak of the post-2007/08 crisis was not, however, related to the inefficient and insufficient privatisation programme, that allegedly led to distorted management and lending practices, as some scholars contend (Guardiancich, 2016, p. 206). As this article shows, it was rather the implementation of the European regulations, especially those associated with the euro zone, which heightened the weaknesses of the Slovenian pre-crisis accumulation regime.

4It is argued that amidst the Yugoslav 1980s crisis Slovenia embarked on a new developmental path, paced by a steady, although uneven, reshuffling of class power balance at the expense of labour. Framed by the Washington Consensus 1980s structural adjustments and European integration, Slovenia progressively deepened its dependence on the European structures. At the same time, these two international regimes also helped subordinate the wage-labour nexus to exigencies of monetary and fiscal restraint, as well as to the price-focused competition regime. However, the international regulations did not determine the actual form of development. Instead, at the background of the domestic interplay between inherited productive structures, power struggles and institutionalisation of compromises, two distinctive accumulation regimes and situations of dependency characterized Slovenia’s path between the Yugoslav crisis and the post 2007/08 one. While a combination of export-oriented industrialization and dependent financialization determined the structural vulnerabilities of the Slovenian development, a rapid GDP downfall in 2009 can be understood only when changing territoriality and related political authority over the institutional forms are taken into account.

5This argument is developed in three steps: after considering insights from dependency and regulation schools, the Yugoslav 1980s crisis and the separation of Slovenia are studied. The third section focuses on the pre-accession years and the forth one on the developments during the 2000s.

1. Studying post-socialist development: Dependency approach and Regulation School combined

6The recent wave of uneven and asymmetric development in the EU has heightened the need for a theoretical framework that considers both the specific internal/national dynamics of development as well as their interactions with external forces. With that in mind, it is worthwhile to combine theoretical insights from discussions linked to dependency theory and regulation school. Although both dependency- and regulationist approaches represent a large and internally divided analytical perspectives, scholars share the focus on variations in time and space, and consider national development as an inherently unstable regime or process shaped by historical, relational and political factors. Moreover, the combination of the two approaches is very helpful for understanding the process of peripherisation in CEECs. Regulationist approach helps to identify different forms and weaknesses of macroeconomic and regulatory dynamics that shaped the trajectories of CEECs, as well as to consider how these trajectories have been shaped by the changing scales of regulation and political decision-making related to the EU integration. Dependency authors give greater emphasis on social struggles and power relations on national and international level and, thus, allow to contextualize the development of CEECs within the European core-periphery relations and structures.

1.1. Towards a historical-structural and power relational definition of dependency

7With influences from various scientific disciplines (economy, sociology, political and legal sciences) and theoretical approaches (e.g. Latin American structuralism/cepalismo, Marxism, Weberian sociology and Latin American historians, especially Sergio Bagú), the scientific outcome of the so-called dependentistas can neither be termed a one single theory in retrospect, nor did the protagonists call it a one single theory themselves (Beigel, 2009; Blomstrom and Hettne, 1984). “Dependency” was rather a common problem and the scientists involved were working in different ways and with different approaches on an analysis (and political solutions) of concrete situations of dependency. Yet despite their analytical and theoretical differences, the dependency authors shared the following assumptions.

8Dependency is related to different, yet interconnected conditions that shaped capital accumulation in the world economy´s centres and peripheries. One cannot fully understand the simultaneous existence of different degrees of development without any reference to the existence of centres and peripheries in the world economy. Neither accumulation models in the centres nor the ones in the peripheries function independently of their position in the international division of labour. Yet, the degree of dependence either one of them faces is not similar. While accumulation in the centre can draw on linkages between the different economic sectors and profit from international trade at the same time, peripheries commonly lack a capital good industry and thereby face a constant danger of current account imbalances due to the inevitable need for imports of capital and finished goods. Furthermore, forms of (economic) dependency vary historically. In the post-war years, the control of key sectors by foreign capitals has played an increasingly important role, while the asymmetrical flows of credits significantly shaped core-periphery relations during, per. ex., the late 19^th-/early 20^th century, the 1920s and the period since 1970s (see below). (Becker, Jäger and Weissenbacher, 2015, p. 82-84)

9Some dependency authors interpreted this centre-periphery constellation as a pitfall that could only be overcome by the dissociation from the capitalist world economy, while others emphasized the possibility of situations of dependency and development within the capitalist framework. The latter vision of dependency is particularly useful for the current debate here and was most prominently explored by Cardoso and Faletto (1979) who coined the concept of dependent development and highlighted the complexity of economic and political relations under the conditions of dependency.

10According to Cardoso and Faletto 1979, p. 173-74, Cardoso, 1995), concrete situations of dependency/appearances of peripheral capitalism are always historically specific and shaped by the unique dialectical configuration of the internal relationship between the state, classes and production and the international dimension of an unequal division of labour and imperialism. Moreover, concrete form of composition of the ruling bloc depends on particular socio-economic dynamics and structures, the relationship between the representatives of foreign and national capital can take different forms, from strategic coalitions to partial conflict. For the possibility of development under conditions of dependency, this implies that being dependent limits the space for manoeuvring, but the result is not necessarily underdevelopment. Instead, a certain form of dependent development is possible.

11Regarding the CEECs’ development, its constraints and possibilities were therefore framed by the significant changes of the international politico-economic order since the 1980s, e.g. the end of systemic confrontation and the breakdown of the socialist bloc as well as the neoliberalisation of the world market and the European construction, as further detailed below. These transformations were especially important for Yugoslavia, whose leaders chose to resist to politico-economic domination of Moscow and to integrate, though unevenly, to both sorts of “Cold War” markets.

12Departing from this historical-structural and power relational definition of dependency, it is necessary to combine theoretical approaches to specify the particularities of the politico-economic conditions that shaped the dynamics of post-socialist national economies. The focus on crisis and the mechanisms of (relative) stability and weaknesses of accumulation regimes makes the regulationist approaches particularly valuable for analysing Slovenia’s post-Yugoslav development.

1.2. Adapting regulation theory to financialized accumulation regimes and their changing territoriality

13Recently, fruitful bridges have been built between the dependency – and the regulationist approaches following the work of Becker (Becker, 2002; Becker, Jäger and Weissenbacher, 2015). Two concepts of the adapted regulation approach are particularly important, i.e. (1) (dependent) financialization and (2) territoriality of accumulation and regulation regimes.

14While the dependency debates of the 1960s and 1970s take into account asymmetric trade relations and structures of productive capital (FDI) movements on the international level, the changes in the world economy since the 1970s necessitate also considering a new wave of internationalization of money capital and a related financialization of economies. The latter is defined here in terms of rising financial claims (i.e. shares, derivatives, credits, etc.) and incomes with respect to the size of the productive sector. Financialization has concerned all segments of a national economy, but exact modalities of its concretisations are dependent on local struggles and power relations, as well as socio-economic structures and international integration.

15With the accumulation of fictitious capital becoming dominant economically – but also politically in terms of safeguarding the interest of the financial sector – the world economy not only faced growing instability, but also a severe change in the character of dependency relations. While the centres have often experienced a growing importance of fictitious capital (in their GDP composition), interest-bearing capital (credits) became crucial for countries of the global (semi-)periphery. The latter is defined as dependent financialization (Becker, Jäger and Weissenbacher, 2013, p. 35-36).

16The financialized internationalisation of production went in pair with a reconfiguration of the scales of regulation of capitalist accumulation and the formation of a wide range of new international policy instruments. States have simultaneously promoted economic integration by establishing supra-national blocs and economic fragmentation by devolving significant aspects of their regulatory capacities to sub-state levels. In fact, in the contemporary capitalism the core states have been willing to integrate the semi-peripheral latecomers much more than in the past (Brust and Greskovitz, 2009, p. 414). Building on Jessop’s (2002) notion of state strategic selectivity, Becker (2002, p. 203-83) introduces the concept of political territoriality to depart from the nation-state level focus of studies. With statist reasoning “it is difficult to conceptualize changes in the space of accumulation and the configuration of political spaces of regulation which characterize the process of European integration and its crisis” (Becker and Jäger, 2012, p. 174). Regarding the European experience, the concept of territoriality differs from more general notions of Europeanization or transnationalization. It gives greater emphasis on complex struggles between and within social classes over spatial/territorial levels of the state, their influence on the transformations of accumulation regimes as well as to the form of state. Social conflicts over spatial configurations of accumulation regime and regulation are especially pronounced in the periods of great crisis. In times of great crisis, actors try to empower specific territorial levels of regulation to which they have privileged access. For example transnational capital has pushed towards the empowering of technocratic EU institutions. In other words, the concept of territoriality helps to incorporate into the analysis of the peripherisation of CEECs the consequences of post-Fordist economic globalization and of the European integration process without ignoring the relevance of national dynamics.

1.3. The 1980s Washington Consensus and the European international regulatory regimes

17Two international policy regimes have been particularly important for the capitalist development in Slovenia, i.e. the Washington Consensus agenda (WCA) and the EU/EMU. During the 1980s and in the early 1990s, particularly in the countries that were engulfed in debt crisis and hyperinflation, the IMF could effectively shape local regulations by tightening its financial assistance on structural reforms. For Panitch and Gindin (2012, p. 238), the restructuring of monetary regimes was at the core of the WCA: “[T]he concern with increasing states’ regulatory yardsticks, and even their capacities, went hand in hand with the push for central bank independence,” seen as a necessary precondition for making states capable of imposing a restrictive fiscal and monetary policy against popular pressures for public expenditure. The reform packages, “exported” from Latin America to socialist regions, focused on price and trade liberalisation, fiscal retrenchment and privatisation, a convertible currency and a tight monetary policy. The WCA for post-socialist capitalism also promoted the de-regularization of clearing markets with “Western-oriented” export-led recovery (Gowan, 1999, p. 191).

18Especially in the second half of the 1980s, the representatives of the WCA and the EU joined their efforts to promote a particular state project, a regime of accumulation and a form of international integration in emerging post-socialist countries (Ivanova, 2007, p. 357-59). , In fact, the crisis of socialist regimes in CEECs overlapped with the re-launching of the European integration project and a reconfiguration of the European regulations in favour of fiscal conservatism, centrally-led tight monetary policy and a common currency. This anti-Keynesian demand management shift favoured a change in the hierarchy of structural forms by subordinating the labour-wage nexus to monetary regime privileging price stability and by transferring the main burden of adjusting to international imbalances and competition to the national labour market and wage policy (Boyer, 2000).

19After the signature of the European Agreements in the mid-1990s, the EU policy exercised a significant, though uneven, influence on post-socialist states, especially in the field of competition, sectorial policies and industrial standards (Bohle, 2006, p. 86). In contrast to the previous enlargement waves, the post-socialist candidates had to eliminate controls on the cross-border movement of capital before becoming a full member. Especially in the Viségrad four countries, the development strategies sooner or later became subordinated to the need to attract or maintain investment inflows by engaging in a downward wage and tax competition (Bohle, 2009; Drahokoupil, 2009). By discouraging Keynesian-like state interventionism and an integrated development of domestic capital and investment, the EU regulations promoted a subordinated integration of the post-socialist regimes of accumulation into the production networks dominated by the European core countries (see Ivanova, 2007, p. 354). This refers also to the East Germany, which “can be interpreted as an extreme case of the “dependent market economy” (Bluhm, 2010, p. 208) after the unification. In fact, the neoliberal remaking of European constructions favoured a broader deepening of centre-periphery relations between the European economies in favour of German-led core.

20Yet, as pointed out by Cardoso and Faletto, dependency relations are not only economic but simultaneously they have a political character as well. From this point of view, the intensification of dependency between the European core countries and post-socialist countries was not a mere external disciplining, but was also an instrument for local elites to assert their interests in internal struggles and to overcome resistance by shifting the scale of decision making from the national to the European level. As Holman (2004, p. 220-21) highlights, “the conditions for membership and – once inside the EU – the Single Market and the EMU-convergence criteria played an important role in disciplining governments and in legitimizing otherwise difficult-to-swallow socio-economic adjustment policies”.

21Based on this theoretical overview, the following sections demonstrate how the changing capacities of social actors to shape the political decision making over the wage-labour nexus, monetary arrangements and competition/trade regimes impacted the specific European dependency situations of Slovenia after the Yugoslav crisis.

2. The Yugoslav 1980s crisis and contested developmental shift

22Within the multiple – domestic and international – crisis Yugoslavia faced during the 1980s, Slovenia’s development experienced a turning point. The outbreak of the economic crisis at the turn of 1980 revealed the dependent character of Yugoslav – including Slovenian – post-war industrialization and led the country to enter a long and contested period of remodelling of existing structures, relations and developmental model under the WCA whose key underlying feature was a radical reshuffling of a class-power balance. This period of contested developmental shift towards depended European dependent integration and subordination of labour to concerns of financial stability and price competitiveness might be delimited with the outbreak of the economic crisis in 1979 and 1992, when the macroeconomic surgery of the wage-labour nexus reached its peak.

2.1. Securing (national) control over labour and monetary policy during the property change

23Domestic constitutional changes in favour of economic decentralization and regionalization of political decision-making on the one side and developments of international financial markets favouring the recycling of petro-dollars on the other side, encouraged the Yugoslav leadership to overcome a constant balance of payments problem related to the import substitution development strategy by relying on foreign finances, predominantly from private creditors (Samary, 1988, p. 235-65). The crisis was triggered by two oil shocks and plummeting current account in the late 1970s and transformed into a foreign debt crisis after an interest rate hike in the early 1980s; at the end of the decade, however, it was a severe stagflation that shaped the Yugoslav hardship (Yarashevich and Karneyeva, 2013). The 1980s economic crisis therefore revealed the dependent character of the Yugoslav – including Slovenian – post-war industrialization, related to capital goods imports and reliance on foreign money capital. Increasing interest rates from the turn of 1980 further reinforced the burden of foreign indebtedness and allowed the IMF to influence domestic policy-making.

24The strategy to overcome the crisis and to repay the debt, forged between the federal government and the IMF, implied a complete refunding of the existing regulation mode and consisted of two main principles: a) export-led recovery with the reduction of domestic demand (wage and public expenditures) and the reinforcement of economic integration with convertible currency/EU markets through trade and FDI at the expense of economic links with the CMEA region, and b) re-centralization and the reinforcement of state regulations, particularly those related to debt management and finances, i.e. public finances and the Bank of Yugoslavia (Woodward, 1995, p. 280-83, p. 347-52). In other words, the “anti-crisis” policies followed the WCA and aimed to subordinate wage-labour regulations to tight monetary and fiscal regimes while transferring the main burden of the crisis to broader population and poorer regions.

25Yet, these attempts provoked an intense political crisis and sparked popular revolt; especially in the late 1980s, the magnitude of the labour movement was unlike any other that the Communist leaders had faced before (Lowinger, 2009). Due to self-management and the social property regime the Yugoslav “labour was empowered in its dealings with the political elite in a way that did not occur elsewhere in East Europe” (Grdešić, 2008, p. 134; cf. Crowley and Stanojević, 2011). Regional authorities often circumvented or only partially implemented the federal “anti-crisis” measures and tolerated the spread of the informal economy to diminish domestic social discontent and hardship (Géraud, 2006, p. 223; Lowinger, 2009, p. 73) – after all, the sources of privileges and political legitimacy of regional centres of power lay within “their” domestic economies (Jović, 2009, p. 144). Consequently, the 1980s reform process enhanced the ever-present tendency of the republican and provincial parties to entrench themselves in regional constituencies and to weaken the federal state (Magaš, 1993, p. 191; Jović, 2009, p. 144). After the mid-1980s, the differences within Communists from different regions were growing, while the agendas of non-Communists and Communists within the regions were converging (Jović, 2009, p. 323).

26Nevertheless, by late 1988, political leaders agreed to adapt the Yugoslav system “to the standards of the EEC” (Prinčič and Borak, 2006, p. 527-28). The abolition of self-management and social property implied a cross-sectorial power-regulatory reshuffling: enterprises’ self-managers were legally transformed into the classes of capital owners and “classic” wage-earners represented by trade unions; enterprises’ banks became profit-oriented financial institutions supervised by formally independent central banking authority; state authorities were granted a centralized fiscal system; finally, external protectionism was abolished with the adoption of the convertible currency, import liberalization and the elimination of administrated price system (Lampe, Prickett and Adamovic, 1990, p. 79-96). Overall, in terms of power relations, these reforms signified a systemic shift in favour of the submission of labour to market forces and the weakening of workers’ bargaining power vis-à-vis state authorities and managers.

27Yet, once systemic reforms launched, “the federal liberalism entered into a frontal conflict with the republican liberalism: the power issues and the property change opposed Ante Marković to the leaders of rich republics” (Samary, 1994, p. 62). The conflict over the control and the extent of “capitalist marketization” of the Yugoslav economy between domestic labour, regional authorities and the federal leadership was particularly strong in Slovenia. Almost forty years of full employment and intense industrialization granted labour with real bargaining power over jobs, wages and social benefits (Woodward, 1995b, p. 341). Slovenia was the most developed Yugoslav region with established trade and investment links with the European core countries. The pro-export orientation of the policy promoted by the federal government-IMF team was thus particularly favourable to the expansion of domestic “western”-oriented exporters (Woodward, 1995, p. 359).

28In fact, the dominant economic policy, together with the new business opportunities linked to the neoliberal remaking of the European integration helped to reinforce the domestic coalition of political reformists and the economic elite that promoted trade reorientation. At the end of the decade, the IMF advisors and the representatives of the European community jointly provided financial assistance packages, conditional on the liberalization (Gowan, 1999, p. 191). It is noteworthy, however, that at the turn of 1990, the Slovenian economy was still predominantly inward-oriented: whereas the European markets accounted for almost two thirds of exports (Kraft, Cvikl and Vodopivec, 1996, p. 216), about 60% of purchases and sales were realized on domestic markets and only 16% abroad (excluding Yugoslav markets) (Mencinger, 2004, p. 74).

29Inherited production structures, the region’s geo-economic position neighbouring leading European countries, and various state regulations (export subsidies, tax incentives, the foreign exchange system and the permission to import) contributed to the fact that Slovenia was impacted by the crisis much later than other regions. It was not before 1987, when the southernmost three regions found themselves at the verge of bankruptcy, that the regional economic output started to contract (Prinčič and Borak, 2006, 582). With rising economic and social insecurity protests spread over various economic sectors and social groups (Prinčič and Borak, 2006, p. 294). The movement from bellow was paced not only by striking (industrial) workers but also by growing resentment of the Slovenian middle-class against the Yugoslav state system of redistribution (Woodward, 1995, p. 361-64). By the late 1980s, the Slovenian political elites, leading managers, together with some white-collar workers and leading intellectuals succeeded to form a common front against the Yugoslav state to secure the rights of republics over property, income and economic decision-making, as well as to enhance a further liberalisation of the Slovenian economy and the participation in the European integration project (Mencinger, 2004, p. 68).

30Therefore, during the intensification of the Yugoslav multi-crisis situation within the disintegrating Cold War regime, securing state-national rights and macroeconomic powers gained public priority over the issues of economic liberalization and of neoliberal reshuffling of relations between social, economic and political actors and institutions. Political separation meant that the main regulatory scale of the Slovenian accumulation regime was transferred to domestic authorities that had henceforth at their disposal two new institutions, independent bank and centralized fiscal body. Their powers were, however, used not only to reduce state expenses for social welfare, as highlighted above by Panitch and Gindin (2012). The macroeconomic surgery orchestrated by state and banking authorities in the early 1990s created also the Slovenian “pool of cheap labour” in comparison to the old EU member states. Svetličič (1993, p. 165) estimates that in the early 1990s, the total hourly earnings in Slovenia’s manufacturing were about one eight times lower than in Germany and almost six times lower than in Austria and Italy. The labour costs in Portugal were higher as well (see also below).

2.2. Radical macroeconomic surgery, the 1992 strike and a wage-led recovery

31The systemic changes and state independence created institutional and political conditions that enabled the Slovenian authorities to realize a radical macroeconomic surgery of the wage-labour nexus, legally codified in the anti-inflationary program prepared under the Marković government in 1989–1990. The disagreements over the political control of the emerging (capitalist) mode of regulation and “post-crisis” accumulation regime between the Slovenian authorities and the federal ones contrasted sharply with their consensus over the main principles of economic reforms (Géraud, 2006, p. 219-22). Although by the end of 1990 the newly elected centre-right government departed from the initial “Marković” policy design to embrace ad hoc interventionism (Mencinger, 2004, p. 71, p. 75), tight fiscal and monetary policy, radical trade liberalization and income restrictions were all listed high in the war against inflation (Majcen and Kamiński, 2004, p. 133; Kraft, Cvikl and Vodopivec, 1996, p. 209-10). While hard budget constraints were imposed by a “centralis[ed] public expenditure management program” (Cvikl and Gaspari, 2004, p. 193), “the central bank law gave the Bank of Slovenia full independence in conducting monetary policy. This proved to be crucial in implementing macroeconomic stabilisation policies […]” (Kraft, Cvikl and Vodopivec 1996, p. 208-09). Being pursued at the background of the already falling purchasing power and administrative disintegration of the Yugoslav market and the clearing regime, these measures provoked a sharp domestic and external demand slump (Kraft, Cvikl and Vodopivec, 1996, p. 216; Kračun, 2008).

Table . The early 1990s crisis, selected indicators, annual change, 1988–1993

	1988	1989	1990	1991	1992	1993	1994
GDP growth	-1.7	-1.8	-4.7	-8.9	-5.5	2.8	5.3
Registered unemployment rate	2.5	3.2	5.8	10.1	13.4	15.4	14.2
Industrial production	-2.6	1.1	10.5	-12.4	-13.2	-2,8	6.4
Real gross investment	/	-10.1	-8.7	-11.5	-12.9	10.7	14.1
Trade balance as % of GDP	/	/	/	9.3	7	1.1	2.2
Average real wage index, 1989 = 100.0	/	100.0	73.5	62.4	60.6	69.3	73.5

Sources: GDP and industrial production (Bank of Slovenia, 1993; 1994; 1995); registered unemployment (Pirher et al., 2000); real gross investment (UNECE, 1993 [1989-1990]; Podkaminer, 2013 [1991-1994]); trade balance and average real wage index (Podkaminer, 2013)

32As can be observed from Table 1, between 1989 and 1992, the Slovenian GDP shrank annually by over 5% on average, industrial production by almost 9% and investment by over 10%. In 1991, losses of firms already approached 9% of GDP. However, it was real wages that recorded the biggest losses; in contrast to general economic liberalization – the newly elected government kept its control over wages to maintain restrictive income policy (Borak, 1993, p. 50) and by 1992 average real wages decreased to less than 61% of their 1989 level (Podkaminer, 2013, p. 13). Unemployment soared and peaked in 1993 when 137,000 workers were registered as unemployed (Pirher et al., 2000, p. 9), in contrast to 28,200 in 1989 (Križanič, 1991, p. 36). Finally, inflation continued to remain high, despite experiencing a substantial fall after the monetary independence, going down from 240.6% in 1991 to 92% in 1992 (Kračun, 2008).

33Due to depressed domestic demand “[e]xport expansion towards the West gave the only hope for survival” (Kračun, 2008, p. 10). The trade reorientation in favour of German, Italian and French markets (Bank of Slovenia, 1994, p. 14) was also stimulated by the signing of the Association Agreement in 1991 that “laid the basis for a gradual freeing of trade over a 10-year period” (Myant and Drahokoupil, 2011, p. 90). In fact, in contrast to the internal meltdown, a positive balance of payments and an inherited low level of debt burden, standing at about 14% of GDP in 1991 (Mrak, 1993, p. 223) were crucial for a rapid stabilization of the Slovenian external position. While the authorities nevertheless continued to promote foreign-led recovery (Mencinger, 1991, p. 31), the way out of the crisis was actually paved by improved domestic demand.

34The economic and social hardship further fuelled the above-mentioned discontent of workers. Despite a rapid industrial decline, trade unions succeeded in maintaining high workers’ support and enjoyed a density rate of 66% at the turn of 1990 (Broder, 2016, p. 41). After the government’s decision to unilaterally freeze wages, a mass strike wave emerged and pushed the government to rise wages. Due to indexation mechanisms, the wage improvement positively impacted state consumption as well. Consequently, first signs of recovery in Slovenia appeared as early as in late 1992, when most of Europe was still suffering from the recession. In the following year, the European recovery and the revival of domestic investment further consolidated the macroeconomic stabilization (Kračun, 2008).

35Thus, the contested remodelling of Yugoslavia under the WCA not only led to political “nationalisation” of the emerging capitalist accumulation regime in Slovenia, but also created conditions for the outward reorientation. As seen, the deepening of economic dependency on European markets via trade channel was as much related to the systemic weakening of labour as it was to the establishment of central banking and fiscal authorities that used their powers and external liberalisation to weaken further labour market bargaining power. At the same time, the manifestation of the organized labour strength in the context of high economic and systemic uncertainties (Chavance, 2011, p. 167), made militant socio-democratic trade unions one of the chief designers of the post-Yugoslav Slovenian dependency path.

3. Export-oriented “national capitalism” under strong yet corporatist labour

36The dependency situation and the characteristics of the post-Yugoslav accumulation regime were much dependent on the capacities of the three key actors, i.e. trade unions, employers’ organisation and the government, to form a cross-class coalition and to economically and politically secure Slovenia’s integration in the EU within given developmental constraints and opportunities. Since the early 1990s the European restrictive international regime delimited the space for economic and social restructuring. Nonetheless, domestic actors enjoyed a significant space for developmental manoeuvring. Low external indebtedness “liberated” the country from direct pressures from the IMF. Although the negotiations started in 1997, the EU could only indirectly shape domestic arrangements through technocratic evaluations and benchmarking, especially during the first years (see next section). With respect to its regulatory pillars, the export-led industrialization based on predominantly domestic control of production and financial resources, can be delimited between 1992 when the privatization law was adopted and 2001, when the Bank of Slovenia (BoS) explicitly started to accommodate its policy to the ECB.

3.1. Pro-European competitive neocorporatism and its four partners

37A slight reshuffling of power in favour of labour in the early 1990s led to the formation of a strong system of pro-European competitive neocorporatism with risk-sharing relationships between the wage-labour nexus, monetary and competition regimes. After the labour unrest, the left-centre Liberal Democratic Party came to power. The members of the party, known for their (past) radical critical opposition with the socialist youth organisation, now led the integration of Slovenia into the Euro-Atlantic organisations (Močnik, 2006). During the negotiations over the privatization method, organized labour and the new government engaged in their first political exchange. The law adopted in late 1992 was a compromise that favoured a gradual, though uneven redistribution of social assets: 40% of the shares of privatised firms went to various state funds; public utilities and steel mills were nationalised; the largest and most troubled enterprises were placed under the control of the national Development Fund, which managed their privatization; for the largest group of enterprises, management-employee buyouts (MEBOs) were defined as the prime method of privatisation and the free distribution of vouchers as the secondary one. (Simoneti, Rojec and Gregorič, 2004, p. 227-31; Mencinger, 2004, p. 77-78)

38The banking sector, however, was transferred from “corporate” to state ownership as a result of the inherited institutional setting and the crisis of domestic production (Kržan, 2014, p. 326). Since under the Yugoslav self-management commercial banks were owned and managed by enterprises, they were supposed to be privatized automatically with “their” firms in the early 1990s. However, at that time most of the banking sector was insolvent. Therefore, in 1993 three major banks, accounting for more than half of the entire banking sector, entered the process of rehabilitation under state supervision (Štiblar and Voljč, 2004, p. 272).

39Moreover, following the 1992 labour action and wage hike, the government and the CCIS accepted the trade unions’ proposal to establish centralized collective bargaining. During the conclusions of the first social pact, labour accepted wage restraint in exchange for the establishment of the Economic and Social Council. The latter became the key institution of the Slovenian social partnership that favoured a gradual reduction of inflation and a relative maintenance of the social security system (Stanojević, 2012).

40The struggles over the wage-labour setting were directly linked to the regulations of money supply and exchange rate management. For Bembič (2013, p. 84), the inclusion of labour into central macroeconomic policy making consolidated the regime of managed float. Consequently, the BoS could act as a “normal” central bank (Greskovits, 2009, p. 205) and, given established power relations, to resort to currency devaluation and (temporary) capital control to maintain the competitiveness of the economy without undermining the macroeconomic stability and/or directly confronting labour (Bembič, 2013, p. 84; Kržan, 2014). In fact, due to its deep embeddedness and accommodative stance in coordinated policy-making, Greskovits (2009, p. 220) underlined that the BoS played a unique role of social partner during the accession period.

41Finally, lower political dependency on decisions taken abroad was an important factor of the established regulatory arrangements. During the EU negotiations, the actual content and speed of the liberalization measures remained in the realm of domestic politics and power relations (Lindstrom and Piroska, 2007). Despite the regular pressures from the EU representatives and broader “international community”, the Slovenian leaders, advised by a team of economists openly disagreeing with the IMF radical approach, preferred to pursue a gradual path. This policy shift after the initial macroeconomic surgery had important macroeconomic outcomes and contributed to a solid economic growth.

3.2. Becoming a German supplier with a support of domestic demand

42By the mid-1990s, the Slovenian economy stabilized after the early 1990s crisis. Taking GDP expenditure structure as the main proxy for an accumulation regime, two periods could be distinguished: between 1996 and 2002 the accumulation was predominantly based on domestic financial resources and demand, led by household consumption and state-led investment; after the early 2000s, as explained bellow, the regime shifted towards a private investment-based and foreign-debt led accumulation.

43Since the early 1990s, the Slovenian state pursued a selective FDI strategy. While the country protected financial, retail trade and social utilities sectors, the foreign investors, coming mostly from Germany, France and Austria, played an essential role in the restructuring of export-oriented complex manufacturing. By the early 2000s, foreign enterprises assured for almost two-fifths of all exports (Bank of Slovenia, 2005, p. 80). Despite an export-oriented regime, Table 2 suggests that domestic demand was a crucial element of the accumulation and economic stability.

Table . GDP growth and its components, 1996–2002 average

	1996–2002
GDP growth	3.8
Final consumption expenditure
… General government	0.6
… Household and NPISH	1.7
… Gross capital formation	1.6
External balance of goods and services	-0.1
… Exports of goods and services	3.3

Source: SI-STAT

44The state stimulated economic growth, but not in a direct way – fiscal expenditure was, after all, delimited by the European restrictions. It was through the project of a highway system reconstruction that the state contributed a lion’s share to total investment and hence, economic growth (Oplotnik and Križanič, 2004). More crucially, a floating exchange rate system, state-controlled banking restructuring, “grace” periods, subsidies and loans granted to firms, a slower privatization of less-competitive firms (Simoneti, Rojec and Gregorič, 2004, p. 230-31) as well as a comparatively smaller retrenchment of welfare state provisions (Bohle and Greskovits, 2012, p. 212-13) prevented massive closure of plants and enterprises, large(r)-scale dismissal of workers and a rise of poverty. By preventing the appreciation of the national currency, (mild) capital controls were particularly favourable to the manufacturing sector (Becker, 2016). Household consumption was maintained despite a modest improvement of the unemployment rate and a slow wage recovery from the early 1990s slump. Because of restrictive income policies, the average real wage was still about 8% below its pre-transition 1989 level as late as in 2002 (Onaran, 2011, p. 218; Podkaminer, 2013, p. 17). It should be noted, however, that the Slovenian annual average wage was still about two times higher compared to Viségrad groups and was “only” about half of that in the old EU member states (OECD.stat). Moreover, wage restrictions went hand in hand with a relatively maintained welfare system and were part of cross-class political exchange to ease the integration of the country in the EU. This helped to maintain political and social legitimacy of Slovenia’s accession process (Stanojevič, 2012, p. 874).

Table . The external position of Slovenia, selected indicators, 1996–2002 average

	1996–2002
Current account balance, % of GDP	-0.8
Net FDI stock, % of GDP	-8.5
Net International Investment Position, % of GDP	-4.6

Sources: Eurostat (current account and NIIP), UNCTAD.Stat (net FDI stock)

45Moreover, in contrast to many other post-socialist states that by the late 1990s found themselves in another crisis and were led to make foreign TNCs the pillars of their industrial and financial expansion (Drahokoupil, 2009), Slovenia was widely recognized for its macroeconomic stability and favourable external position (Bohle and Greskovits, 2012, p. 51-52): an insignificant current account deficit, a modest contribution of FDI to the overall economic output, as well as a minor role on foreign credits (see Table 3) made the Slovenian development exceptional among the CEECs. What is more, the country also outpaced many other EU candidates in narrowing the developmental gap, measured as GDP per capita in purchasing power disparities, with the EU15 (Eurostat).

46The Slovenian development up to the early 2000s can be termed socially inclusive dependent development characterized by export-oriented industrialization and manufacturing FDI and the inclusion of political and economic management of labour in the concerns over monetary stability and international competition. Such dependency situation allowed for the formation of an accumulation regime that ensured stable jobs and wages, as well as internal consumption without substantial foreign debt growth. Hence, the attenuated economic dependency expressed in a relatively balanced current account, as well as favourable FDI and foreign debt position.

4. Shifting in favour of dependent financialization and accelerated Europeanisation

47Up to the late 1990s, the EU recommendations, pointing regularly to insufficient liberalization and privatization of Slovenia, did not have greater influence on domestic arrangements. Yet, after 2000, just before the launch of the euro, the EU pressures intensified with the adoption of the so-called Regatta approach that ended with the previous integration approach where the candidate countries were divided in two pre-established groups. According to the Regatta approach only those countries that would be the first to accomplish the accession criteria would be admitted to join the EU (Andreff, 2007, p. 426). Intensified external pressures, accelerated liberalization linked to the integration in the EU (May, 2004) and the ERMII regime (June, 2004), as well as the weakening of trade unions bargaining power and the arrival of a centre-right government were key characteristics of the domestic-international politico-regulatory interplay that encouraged the development of dependent financialization and liberalized competition and monetary regimes from territorialized, labour-shaped democratic pressures. Starting in 2001/02 with the beginning of the explicit deterritorialization of the central banking authority, this period when Slovenia became much more dependent on external policy-making, ended abruptly with the emergence of the post 2007/08 global crisis.

4.1. Towards a labour-subordinated neocorporatism

48The European trade arrangements did offer new market opportunities to the Slovenian exporters, but this came with a certain price. According to Murn (2002, p. 45), “the pre-accession process run by the European Commission, which applies much stricter criteria for applicant countries than existing member states” was among the key reasons behind the limited industrial policies of the Slovenian state. State aid to troubled industry was consistently lower than the EU average throughout the 1990s, regional development policy barely existed, whereas in terms of per employee aid to manufacturing, the state aid policy was among the lowest within the EU (Murn 2002, p. 57-59). Due to the limited state investment, productivity gains were mostly achieved by cutting jobs and extending numerical and temporal flexibilisation of labour (Rojec et al., 2004, p. 463). This was also the case in the manufacture, although this sector was the most transnationalized.

49The 1990s accumulation regime was unable to generate new jobs: between 1992 and 2002, the real output increased by almost 48%, whereas employment and the labour force practically stagnated (Silva-Jauregui, 2004, p. 125). After the ownership consolidation in the early 2000s, it also became clear the workers were among the worst off in the privatization process whereas managers and (para) state funds controlled most of the economy (Bembič, 2013, p. 86-87). Thus, the Europeanisation of the Slovenian economy was accompanied by a progressive redistribution of wealth and productivity gains in favour of capital (Kržan, 2014): between 1995 and 2004, the share of income and wages in GDP decreased by almost 3 percent (SI-STAT).

50Nonetheless, “after 2000 all the measures and instruments that had eased the life with inflation turned into burdens” (Kračun, 2008, p. 17) and the ruling centre-left coalition accelerated the “Europeanisation”. Already in 1999, the foreign investment policy in the banking sector was liberalized (Lindstrom and Piroska, 2007, p. 122). In 2001, BoS shifted its policy away from targeting growth to prioritize inflation targeting (Silva-Jauregui, 2004, p. 120), abolished capital controls and progressively reduced real interest rates by 2005. In June 2004, when Slovenia entered the ERMII, the BoS lost the capacities to use the exchange rate mechanism and transfer its regulatory powers to the ECB (Bank of Slovenia, 2015, p. 13). Wage-labour regulations were made more competitive with de-indexation of wages and a labour market reform (2002) that for the first time undermined the rights and job protection of a “core” labour force (Kračun, 2008, p. 17; Kajzer, 2007, p. 472-73). Market pressures further increased with the liquidation of the Development Fund in 2002 and the abolition of the remaining protectionist measures to adjust to EU state aid rules (Simoneti, Rojec and Gregorič, 2004, p. 229; Kržan, 2014, p. 328).

51The regulatory change during accelerated Europeanisation was thus a double one and echoed the above mentioned Boyer’s warnings on structural-power impacts of the EMU: financial and competition concerns now weighted heavier on the wage-labour nexus while monetary and competition regimes were placed under the European authorities, meaning that Slovenian regulators became much more dependent on decisions taken abroad. The trade unions were among the first victims of the system that they helped to construct and maintain. After succeeding to stabilize its membership at about 44% during the accession period, trade unions saw workers leaving their representatives en masse between 2002 and 2004, when the density rate dropped from almost 45% to 37% (Broder, 2016, p. 41). The disintegration of the cross-class-coalitions on the micro-level acted as a detonator for the institutional social partners (Stanojević, 2012, p. 870-72). In 2004 the electorate decided in favour of a major political change, bringing a centre-right coalition on power.

52Backed with a new group of neoliberal advisers, the new government immediately tried to unilaterally implement a package of radical reforms that led to a major confrontation within corporatist partners. The leading trade union confederation organized a mass rally and the government stepped back. A rather uncommon political deal followed: in exchange for the removal of only one reform proposal, i.e. the flat tax reform, the trade unions accepted to enter in dialogue with the government (Stanojević, 2015, p. 408-9). The latter thus succeeded to implement most of other reform measures, though more gradually (Leskošek and Dragoš, 2014, p. 42). In 2006, the obligatory membership in the leading employer organization was abolished and led to the radicalization of the organization’s demands and negotiating stance. In fact, due to the heightened polarization of actors, the tripartite bargaining eroded significantly (Stanojević, 2012, p. 869-71). Unsurprisingly, workers’ support for trade unions decreased further: after 2004, the density rate decreased by almost a quarter, standing at 26% in 2008 (Broder, 2016, p. 41).

53These developments were symptomatic for a trade-off, specific to the European peripherisation of the Slovenian economy. By preventing external devaluation and reducing the need for coordinated wage setting and national macroeconomic policy, the EU accession and the subordination of the BoS to the ECB’s policy and directives created possibilities for the Slovenian political elites (and leading employers) to reduce pressures from the organized labour (cf. Feldmann, 2014). As highlighted by Krašovec and Johannsen (2016, p. 4), since the mid-1990s “many people within the government and administration may have felt the need to regain autonomous capacity; that is, the corporatist arrangement was seen as a straitjacket, if not an outright state capture”. Thus, the first major confrontation of the corporatist partners in the mid-2000s was not merely related to the government change and reinforced the alliance between the European and Slovenian ruling elites. In fact, the mid-2000s conflict was also about the reconfiguration of the wage-labour nexus within a new accumulation regime.

4.2. The emergence of a private debt-led accumulation regime

54For Becker et al. (2010, p. 228), each form of financialization “requires far-reaching changes in regulation. These changes are socially and politically contested and encompass both legal and social norms”. In Slovenia, this “far reaching changes” referred mainly to the removal of barriers on capital controls and the change in the policy and status of the central banking authority that created structural conditions for the deepening of dependency with dependent financialization. Despite the continuity of economic growth, the underlying macroeconomic and institutional pillars of GDP expansion, going up annually by almost 5% between 2003 and 2007 (see Table 4), changed significantly.

Table . GDP growth and its components, 2003–2007 average

	2003–2007
GDP growth	4.8
Final consumption expenditure
… General government	0.5
… Household and NPISH	1.7
… Gross capital formation	2.8
External balance of goods and services	-0.2
… Exports of goods and services	6.3

Source: SI-STAT.

55The turning point took place in the early 2000s as a consequence of a particular interplay between structural changes and cyclical supply-demand conditions. The overlapping of the abolition of capital controls and the launching of the euro allowed foreign banks operating in Slovenia to gain access to cheap euro credits via the so-called internal capital markets (obtaining of funds from a parent bank). Once the country joined the EU, Slovenian domestic banks joined the lending strategy of their foreign counterparts (Breznik and Furlan, 2015). By 2008, the net foreign liabilities of the financial sector reached 30% of GDP (Bank of Slovenia, 2015, p. 13-14). Besides an abounding liquidity, rising incomes and expectations due to improved external demand for Slovenian exports also stimulated credit growth (Ponikvar, Tajnikar and Došenović Bonča, 2014, p. 158-59), especially after 2006 when the resurgence of inflation sent the real interest rates below those of the euro zone (Bank of Slovenia, 2015, p. 12).

56The indebtedness was concentrated in the corporate sector, whereas the debt of the Slovenian middle-class remained relatively low (Kržan 2014, p. 330-32), in contrast to many other socialist countries (Becker, 2016, p. 57-60). By preventing a massive reduction of one’s income, the 1990s accumulation regime enabled most of households to maintain their consumption without a significant reliance on borrowing. Debt-led accumulation in the 2000s gave new impetus to the internationalisation of the Slovenian banks and retailers towards the other countries of former Yugoslavia. Private, cyclically sensitive and low-valued sectors such as construction, real estate and financial intermediation expanded as well (Ponikvar, Tajnikar, and Došenović Bonča, 2014, p. 160). As highlighted by Becker, Jäger, and Weissenbacher (2015, p. 83), high imports of money capital in peripheral economies tend to encourage the proliferation of precisely those sectors that “are not exposed to strong international competition”. In contrast, domestic productive capacities tend to erode (Becker, Jäger, and Weissenbacher, 2015, p. 83-85). In Slovenia, productivity growth slowed down, and by 2007 came to a halt. The share of high-value-added exports among total exports stagnated (Šušteršič et al., 2008, p. 39). Jobs were mainly created in low-qualified and low-paid work based on temporary contracts. (IMAD 2008, p. 146). The average real wages exceeded their 1989 level only in 2006. By 2008, they were about 8% higher than twenty years before (Podkaminer, 2013, p. 17).

57Under the new accumulation regime the Slovenian external positions worsened, most spectacularly regarding the finances (see Table 5). The annual net foreign liabilities of Slovenia stood at 4.6% of GDP between 1996 and 2002. During the following five years, they increased to 13.3% of GDP. Indicative of dependent financialization, when imports tend to soar under the construction boom (Becker, Jäger and Weissenbacher, 2015, p. 83), trade deficit expanded as well. However, the worsened current account balance was not simply related to “a quick economic growth” (Mencinger, 2008, p. 6), FDI-liberalization at the turn of 2000 stimulated a new wave of foreign-led privatization and takeovers.

58“[T]he deficit on the current account [became] a constant feature, since trade deficit became more and more combined with more stable deficits on the account of income and current transfers” (Mencinger, 2008, p. 6). Thus, the deterioration of the Slovenian external position was indicative of the deepened dependency with on the one hand greater imports and productive capital inflows that widening current account deficit, and on the other hand greater money capital inflows, deteriorating the financial position.

Table . The external position of Slovenia, selected indicators, 2003–2007 average

	2003– 2007
Current account balance, % of GDP	-2.2
Net FDI stock, % of GDP	-10.7
Net International Investment Position, % of GDP	-13.3

Sources: Eurostat (Current account and NIIP), UNCTAD.Stat (net FDI stock).

60Overall, thus during the 2000s, dependent financialization expanded the vulnerability of the Slovenian economy in face of external shocks and made the already weakened pro-European corporatist coalition more dependent on decisions taken on the European level. The integration of the country in the Eurozone reduced the capacities of domestic actors to regulate domestic economic activity and to forge political compromises necessary for managing the upcoming downfall.

Conclusion

61Because of its strong(er) tripartite bargaining, a relative political stability and maintenance of welfare state arrangements, Slovenia has long been considered as socio-democratic exception among the CEECs. At the same time, Slovenia’s international integration differed significantly from the other CEECs, especially regarding the FDI inflows. Hence, a paradoxical attitude adopted by the EU representatives towards Slovenia’s integration in the EU. One the one hand, the European Commission constantly pressured Slovenian leaders to accelerate liberalisation and privatisation. On the other hand, the EU leaders praised the country as a post-socialist success story. Downplaying the real causes and characteristics of the changing accumulation regimes behind the stable economic growth, this laureate quickly evaporated when the country faced one of the biggest downturns in the region at the end of the 2000s. To understand the characteristics of the Slovenian development from the 1980s Yugoslav crisis to the post 2007/08 global one, the article has built on the insights from dependency- and regulationist- approaches to explore the relationships between the changing domestic class-power balance, forms of international integration of the Slovenian economy, and its institutional and macroeconomic trajectories.

62It has been argued that the late 1980s/early 1990s represented a rupture in the Slovenian development after a major tilting of class power balance in favour of capital during the restructuring of Yugoslavia under the WCA. The restoration of a private property regime and the abolition of developmental protectionism during the Yugoslav systemic reforms, as well as the IMF-like radical macroeconomic surgery, orchestrated between newly established Slovenian fiscal and banking authorities, created key conditions for shifting the Slovenian development towards deepened dependent integration in the neoliberal European structures.

63Two distinctive accumulation regimes and dependency situations defined the Slovenian trajectory up to the post 2007/08 one. A slight reshuffling of power balance in favour of militant, yet corporatist trade unions and a relative autonomy of Slovenian authorities from the EU pressures led to the formation of a labour-inclusive accumulation regime regulated by a risk-sharing cooperation between the monetary and the competition regime, and the political and economic management of labour. This regulatory setup also allowed for a sustained domestically-controlled recovery based on export-oriented industrialization with manufacturing FDI. This period can be termed socially inclusive dependent development. After the turn of 2000, the conditions of dependency transformed with accelerated adjustments to the EU/EMU and deterritorialization of monetary and competition regimes on the European level. This weakened labour bargaining power and paved the way for the right-wing government shift. The double power-territorial regulatory change set the framework for debt-led accumulation, increased price-competitiveness pressures on the wage-labour nexus and deepened political dependency of domestic authorities on the European Commission, the ECB, and the performance of the German-core network. While the combination of export-led industrialization with minor FDI and dependent financialization made Slovenian vulnerable towards fluctuations of external demand and international financial markets, it was the partly deterritorialized character of the accumulation regime that limited Slovenian state macroeconomic capacities to face the upcoming downturn.

64Although the discussion on the geo-political aspects of the Slovenian trajectory was beyond the scope of this analysis and should be explored in further research, the present analysis provides new insights on the Europeanization of Slovenia and the peripherisation of the CEECs. First, the Slovenian performance, especially during the 1990s, led several scholars to trace parallels between the Slovenian post-socialist recovery and the post-war recovery of many smaller Western European states some time earlier (Bohle and Greskovits, 2012, Stanojević, 2012). However, in contrast to the Marshall Plan and Bretton Woods arrangements, which were conducive to state-led industrialization, the coordinated rise of the price and wage levels and the mass production-mass consumption nexus, neither the 1980s WCA nor the EU/EMU requirements allowed the post-socialist countries to recover on a self-supporting basis (Ivanova, 2007). Instead, they both considered foreign demand and capital as main drivers of economic restructuring and promoted the liberalization of economies. This created key regulatory channels for the European peripherisation of the CEECs, including Slovenia.

65Second, this analysis also points to the limited explanatory power of (elite) agency-focused studies that ascribe the weakening of neo-corporatist policy-making and the building up of foreign indebtedness to the change in the government’s position in 2004 (Bohle and Greskovits, 2012). These accounts underestimate the importance of EU/EMU-led regulatory changes and consequent rescaling of the political territoriality of the Slovenian accumulation regime. The abolition of capital control and loss of monetary sovereignty stood behind a rapid build-up of foreign debt during the 2000s. Myant and Drahokoupil (2012, p. 4) arguably insist that domestic control of the banks did not contribute to greater macroeconomic prudence. Yet, it should be acknowledged that these banks operated within a liberalized and rescaled framework favouring (dependent) financialization of national economies. This analysis suggests the central banking authority with its policy and territoriality plays a key role in shaping the actual development of peripheral capitalism in the CEECs and merits to receive greater academic attention.

66All in all, the Slovenian case demonstrates that the dependency and regulationist approaches allow to explore the complex relationships between the changing of the international contexts, structural underpinnings, domestic actors’ agency and power relations, as well as politico-regulatory set-ups that defined the peripherisation of the CEECs within the post-Fordist European context. Hence, this combined theoretical approach is particularly valuable for understanding the broader historical conditions of dependency, the mechanisms of the changing situations of dependency, as well as for the characteristics of the underlying vulnerabilities of growth trajectories.