At the same time, the newly free countries of Central and Eastern Europe found that, if they were to establish their economic independence and provide a sound basis for their political independence, they first had to thoroughly liberalize and marketize their economies and stabilize their currencies. Slovenia joined the EU in 2004. And since that time, it has improvised its economic development and reestablished its banking system, balance exchange rates and create new employment places for native citizens.
The EC has had policies on employment for decades, but the policies do not constitute a coherent, developed social program. Rather they are a collection of directives adopted in response to a specific concern and requiring minimal amounts of harmonization in national practices. Voting practices in the Council impeded the adoption of more sweeping measures. Because each member state had a veto, with a few exceptions, supporters of an EC social policy fought for the elimination of the veto (Dukes 49). They gained a partial victory with the ratification of the Maastricht Treaty. For Slovenia, the way is now open for a more fully developed EC social policy. A number of characteristics of the workforce in the EC are relevant for policy makers. One is the fact that the EC has a smaller proportion of adults of working age actually working than either of its main competitors. The statistics indicate that a relatively large number of working-age people are dependent on some form of public support. Some people apparently do not work by choice, but many are unable to find work. Following Egert et al (2007): some countries, namely Slovenia started transition with low credit-to-GDP ratios of around 20% in 2005" (201).
Transitional banking systems initially tend to operate with very high ratios of reserves to deposits. This is partly the result of the fact that they start out as monobank systems with 100 per cent reserve backing of deposits, partly because of the extreme inefficiency of the payments system, which requires the maintenance of large commercial bank deposits at the central bank, and partly because of the great ease of obtaining central bank credit by commercial banks in the pre-stabilization period (Dukes 49). If this is the path followed then it would be prudent for the first principle of banking system evolution to be that in the short term, the stability of the monetary system must have priority over the freedom of action of the banks themselves in the management of their assets and liabilities. In other words, in the initial phases of the 'main sequence', when supervisory and banking skills are rudimentary, bank regulation needs to be rigorous and based on simple rules. This is because of the vital role of macroeconomic stability in successful economic transition from state ownership and central administration of the economy to capitalism. The usual argument against tight regulation, which stresses that tight regulation leads to disintermediation is largely irrelevant in a context in which people have so little possibility of informed choice between risky and safe banks that the authorities feel themselves obliged to guarantee all deposits. The development of a dual system in which deposits at strictly regulated banks are known to be safe, while loans to unregulated