President of the Presidency of the Socialist Federal Republic of Yugoslavia

Speech made to the Assembly

Tuesday, 8 May 1990

Mr President, distinguished Representatives, ladies and gentlemen, I have the honour to address this eminent European forum in the capacity of President of the Presidency of the Socialist Federal Republic of Yugoslavia. It gives me pleasure to greet you personally, ladies and gentlemen, parliamentary representatives of European countries to the Council of Europe, respected advocates of peace and co-operation, of human rights and freedoms, of democratic development and links on our continent, on the basis of common humane, political and cultural values.

The time that we live in and the epochal changes that we are witnessing justify the efforts that you and your forum have been investing as well as reaffirm the value of the objectives that we have all jointly set for ourselves.

I believe that we can view with justified hopes the current international developments as well as the future of Europe and indeed of the world as a whole. Tensions between the big powers, the principal feature of international relations throughout the post-second world war era, have eased perceptibly. Elements of military and political confrontation and of rivalry between the big powers are disappearing.

The world as we knew it yesterday can be said to exist no longer today. New political, economic and social determinants increasingly shape and affect the pace and substance of international relations and of overall developments on the global scene. Our continent is in the centre of these positive transformations. A process of cooperation and one bringing parts of Europe together has been initiated. Existing integration processes are gaining momentum and new, often complementary ones, are being opened.

Democratisation is being asserted in the political life of all European countries. Market laws dominate the economic scene and mechanisms are being put in place to ensure that man’s spiritual and material needs are satisfied in the best way possible.

Respect for the individual rights and freedoms of every man, the protection of man’s environment and of the quality of life are becoming a measure of the humaneness and degree of democracy of every system.

Relations and dialogue between the big powers today still substantially affect overall developments in international relations. However, the picture is rapidly changing, with the strength and influence of other countries and factors also growing. We are moving towards multipolarity in the present-day world, which requires new mechanisms to co-ordinate interests and maintain their balance as the basis of our common security.

The radical and far-reaching turnabouts in East European countries, together with the changes that have swept over the Soviet Union, have changed the entire political picture of Europe. The past, inhibitory ideological and political frameworks have been removed. Scope has been created for inaugurating market economies, free elections and for the expression of various interests and needs. The road has been paved for the unification of the two German states, thus eliminating a vestige of the second world war and a symbol of division on our continent. An all-European debate on our common future has begun.

I trust that you will share my opinion when I stress that in this context one has to be critical of one’s past, its delusions and instances of narrow-mindedness. We should leave the Europe of divisions and wars behind us. This is a debt we owe to the world and to civilisation. We should return to history to seek inspirational examples of intellectual endeavour, of humaneness and freedom, of understanding and of the integration of nations in European and global civilisation.

We have to be aware of these things today as well because sudden changes of relations and equilibrium can also bring about disruptions, revive old antagonisms or provoke new ones by encouraging unrealistic ambitions and exclusiveness upon ethnic, religious or any other grounds.

I hope that the future pluralistic Europe which we are constructing will be free from these dangers and that in its pluralism and unity it will be responsive to the problems of the non-European parts of the world as well. The sense of interdependence, solidarity and of fateful ties among the European peoples requires that the processes of integration, democratisation and the pursuit of prosperity should not be confined to a single geographical and political area.

As a country which has for decades been developing co-operation and friendly relations with all countries and which in the precarious conditions of cold war sought a way out and a guarantee of its future and independence in the policy of non-alignment, Yugoslavia today resolutely calls for the further positive development of political relations between East and West and of economic co-operation between North and South. This we have to do not only because of the responsibility which Yugoslavia shoulders today as it chairs the Non-Aligned Movement which comprises the majority of developing countries, but also because of the awareness of the interdependence of the contemporary world, which experience has confirmed time and again. It is an incontestable truth that only in a world which shares similar values and aspires to similar goals can understanding among peoples prevail, guaranteeing thereby peace and security for all.

The state which I represent is comparatively young as a joint state community. However, the history of the peoples comprising it is an inseparable part of the long history of Europe. Our existence and our deeds are built into the European space, history, culture and the civilisation of our continent. I trust, ladies and gentlemen, that you are all aware of the wealth of Yugoslavia’s historical and cultural mosaic, with all its national, linguistic, religious and other diversities.

May I stress at this point that, if we constituted a part of European history and contributed to the richness of its cultural heritage in the past, if our country and its people shared the fate and challenges of all the peoples of Europe in this century, then it is only natural that today as well Yugoslavia’s first and foremost interest should be joining in the democratic processes of all-European integration. The more so as even at times of the harshest confrontation between the blocs and of numerous constraints, Yugoslavia maintained its independence and the openness of its borders and promoted intensive cultural, political and economic co-operation with all the countries of Europe.

We are interested in the existing forms of European co-operation, its institutions and organisations, becoming broader-based and paving the way to new European co-operation by being more open towards other countries and associations. It is in this light that we view the role of the European Community, the Council of Europe, the European Parliament and the CSCE.

Changes have swept through the world today, Europe in particular, and are also occurring in Yugoslavia, although we cannot equate the ones in our country with those elsewhere. Yugoslavia is a country of marked internal national, cultural, religious and historical differences. Despite the fact that it is a complex state, it managed to ensure a relatively successful economic and social development and an internal balance among its nations and nationalities, with all their differences, over a number of decades. Among the principles which Yugoslavia sought to uphold in its post-war development was autonomous action on the international scene, reflected, inter alia, in its conflict with the Stalinist Soviet Union and its break with the Eastern bloc, as well as in its policy of non-alignment. On the internal relations plane, Yugoslavia was built upon the principle of the autonomy of nations, organised in republican states and linked into the Yugoslav federation. Extensive rights were guaranteed to all national minorities. In the economic sphere already in the 1950s enterprises gained a comparatively high degree of independence and the workers’ management rights, and the system developed over several decades as a self-management socialist system with significant emphasis on market decentralisation.

The political system was, truly, a single-party one, but was, nevertheless, designed to encourage the broadest political participation of all the citizens. After good initial results, the system, although based on the humane principles of political participation and workers’ self-management, started entering a crisis because of the absence of competitive elements both in political and economic life. Economic performance fell short of requirements given the aggravated international economic environment characterised by trade protectionism and the debt crisis which had gripped almost all developing countries, including Yugoslavia. Thus, over the last ten years, Yugoslavia experienced economic stagnation with a high capital outflow to service its external debts. The decreased social product for domestic consumption led to a struggle for its internal redistribution resulting in deteriorated relations among the Yugoslav nations and nationalities, a reduced standard of living, increased unemployment, mounting social problems and a growing inflation. Throughout those years, Yugoslavia sought to address these problems within the framework of the existing system. However, these endeavours failed to yield adequate results. Moreover, numerous adverse phenomena multiplied. In particular, internationality contradictions sharpened. We could say that the equilibrium that had existed in the previous political-economic system began to be eroded.

In the past year in Yugoslavia we have embarked on reforms, both political and economic, to so radical an extent as to bring about substantial changes in the political and economic system. Economic reforms based on market principles are being implemented to the full. The existing tradition of decentralised operation of our enterprises and their corresponding market experience make our task easier. The general internal deregulation and foreign trade liberalisation involve keen competition in economic performance and have set in motion a very difficult and painful process of economic restructuring on the principles of maximum economic efficiency.

We are introducing a capital market, we have established full equality among various forms of ownership, with a growing share of private ownership, and we have accorded foreign investors equal treatment.

In the past year, the economic crisis in Yugoslavia culminated in hyper-inflation, which we have managed fully to curb through a resolute anti-inflationary programme in the past four months. At the same time, the positive balance of payments performance registered over a number of years enabled us to establish the convertibility of the Yugoslav currency, which should constitute the basis for our further financial and general economic opening towards the world.

In outlining these facts it was my intention to inform you that Yugoslavia had exerted exceptional efforts to resolve the difficulties it encountered in the past period, relying on its own forces. The mentioned results have been attained virtually without external support and with a simultaneous exceptionally high net outflow of funds for external debt servicing.

Parallel with the current far-reaching economic reforms aimed at establishing an efficient economic system which will be compatible with the most developed European and world systems, the issue of our joining European and world integration processes is gaining in importance in Yugoslavia. Rather than have an autarchic economic system, we want to join, particularly, European integration processes. For a long time Yugoslavia has had a special agreement with EFTA. Of late, we have further intensified our relations and are prepared for full membership of that grouping. For a long time we have also been an associate member of OECD and now wish to become a full member.

The European Community figures most prominently in our economic relations. So far, we have regulated these relations through special trade and financial agreements, while now we wish to establish the closest possible functional and institutional links with the Community. I think that, given the pace of economic and political changes so far, in two or three years Yugoslavia will have created the prerequisites to apply for full membership in the European Community.

We are aware that the process of the further restructuring of the Yugoslav economy will be difficult, that we will encounter significant transitional problems, but it is nevertheless our wish to design our future economic structure and new development cycle so as to fit into the common European economic space.

We are also making changes in the political system. We have accepted the idea that political competition is necessary, we have relinquished one-party monopoly. Different parties are emerging throughout the country, with the political changes in the different republics evolving at varying paces but with the idea of political pluralism being universally espoused. Multiparty parliamentary elections were recently held in Slovenia and Croatia and elections in the other republics will successively follow. We expect the Yugoslav Federal Parliament to be constituted on multi-party principles also by the end of the year. The multinational and federal order of our country involves a rather complex procedure of changing the constitutional and legislative order which in certain instances is in fact behind the already carried out or accepted changes. I am of the opinion that intensive democratic processes cannot be halted in any part of the country.

The protection of individual human rights features prominently in our constitutional and legal changes. We have initiated amendments to our criminal law so as to make it more specific and eliminate ideological provisions. In this way, it will be brought into line with the highest international civilisation standards and achievements. We have opted for an independent judiciary with all the attributes of a legal state. Yugoslavia has acceded to numerous international conventions on the protection of human rights and is ready to accede to others at the earliest possible date, including the European Convention on Human Rights, when we become a member of the Council of Europe.

All the above-mentioned changes in the political and economic system are unfolding under aggravated internal inter-nationality contradictions, with heightened mutual mistrust, burgeoning nationalism, the revival of differences from the past, as a result of deteriorated economic and political circumstances. National feelings often blur the objective causes of our problems and make it difficult to seek rational ways out.

In this context I would particularly single out the difficulties we are confronted with in our province of Kosovo where in a relatively small geographic area there are numerous problems, from disrupted inter-nationality relations, development and population problems, to a crisis of political and legal institutions. National extremisms have been precluding normal economic and political life in this province for almost more than a decade now. They have led to tragic losses of human life and undesired recourse to force so as to maintain elementary peace and legal order. We are seeking a solution through political means on democratic principles and by implementing economic development programmes where we see scope for co-operation with international institutions as well. We believe that the latest developments are along these lines and that conditions for precisely such a solution are gradually being created.

What we are attempting to do in Yugoslavia today is to strike a new inter-nationality balance under changed political and economic conditions, in the framework of parliamentary multiparty democracy and an efficient market economy without a priori political authority which could adjudicate and resolve inter-nationality conflicts in an authoritarian manner. The differences in the pace of implementing political and economic changes in various parts of the country further increase internal contradictions and aggravate confrontations. We know that this is not Yugoslavia’s problem alone, that internationality contradictions from the past are being revived in many parts of Europe. Even up to now the Yugoslav state has been based on a high degree of autonomy and sovereignty of the republics comprising it. It is on those principles that today as well we wish to consolidate the relations among our nations and nationalities. We expect that the process of economic and political reforms that we are implementing will be brought to a successful completion which will have a positive impact on stabilising internationality relations in the state. The tempo of our joining global, particularly European, integration processes is of great significance in this context. Most Yugoslavs see a place for themselves in a future economically, culturally and politically united Europe. I believe that Yugoslavia can contribute to the establishment of such a Europe. And surely Europe, on its part, can considerably help Yugoslavia in resolving its current internal difficulties, primarily by intensifying the pace of Yugoslavia’s inclusion in various European integrations.

Distinguished Representatives, ladies and gentlemen, it is with special pleasure that I say that for many years now Yugoslavia has successfully been developing its co-operation with the Council of Europe. This co-operation has particularly been intensified over the past few years. Yugoslavia participates in the activities of the Council of Europe as a “special guest”. On our part we have also formally expressed our interest in full membership. Through all-round participation in the activities of the Council of Europe, our country wishes to contribute to the transformation of Europe into a continent of peace, new stability, co-operation and prosperity.

As I address this eminent gathering, the members of the Parliamentary Assembly of the Council of Europe, I wish to point out that we particularly appreciate the contribution of the Council of Europe to the dynamic changes taking place on our continent today. We especially value your solidarity and the balanced and yet resolute support extended to the democratic evolution within European countries which are now in the stage of restructuring their economic and socio-political systems. Therefore I believe that the Council of Europe deserves to be acknowledged as a unique international institution which provides a legal and political framework for the common civilisation and democratic achievements of all Europeans. In this way the Council of Europe contributes to the consolidation of positive developments in Europe and to strengthening their democratic core, which is in the interest of all European countries, including my own.

Ladies and gentlemen, today, when I have the honour of representing Yugoslavia amongst the parliamentarians of the Council of Europe for the first time, allow me to express our expectation and hope that in the very near future Yugoslavia shall, as a fully-fledged member of the Council, work together with you on creating a Europe of the future. (Applause)


Thank you very much, President Drnovsek, for your interesting statement. We have listened with great interest to what you have said, not only about the developments in your country, but also about your international activities. On behalf of the Assembly, I thank you, particularly for your words about the Council of Europe, our activities and our future role.

We now come to oral questions. We appreciate that you, President Drnovsek, have been kind enough to agree to answer questions from the members of the Assembly. We thank you very much for that because it gives us the chance to consider problems that are of special interest to the Assembly. I propose to invite you, President Drnovsek, to answer each question in turn. I shall call each member to ask a brief supplementary question if he or she so desires. I stress that the question must be brief.

I remind the Assembly that in accordance with the guidelines that were recently approved by the Standing Committee and which are reproduced on page 104 of the Rules of Procedure, all oral and supplementary questions will be limited to half a minute each.

Nine members have so far expressed a wish to ask a question of Mr Drnovsek and I propose to call them in the following order: Mr Klejdzinski, Mr Elmquist, Mr Ruffy, Mr Martinez, Mr Portelli, Mr Rokofyllos, Mr Garcia Sanchez, Mr Bruton and Mr Pahtas. I call Mr Klejdzinski, to ask the first question, which is about minorities.

Mr KLEJDZINSKI (Federal Republic of Germany) (translation)

Mr President, I would just like very briefly and simply to ask how you see the problem of minorities and the protection of minorities in your state.

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

As I shall try to explain, the issue of nationalities and minorities is one of the most important that we face in Yugoslavia. In the past, I believe that we succeeded in achieving a balance between our minorities and our nationalities on the principles of independence, equality and the sovereignty of the republican states. Now, when we are changing both our political and economic systems, we are in a transitional period in which the relationships between our nationalities and our minorities are no longer in balance. We face a problem of nationalism. Many questions are now being raised about such relationships. It is perhaps the major issue in the constitutional changes that we have begun in Yugoslavia. We are still trying to follow the principles that we tried to follow before – to guarantee the full rights of all the minorities in Yugoslavia and to confirm the sovereignty of our nations in their republican states, and in the state of Yugoslavia as a whole.

Mr ELMQUIST (Denmark)

I noted that in your speech, Mr President, you talked of the political programme and economic development to help the Kosovo process where the minority problem is extremely complicated. Would you elaborate somewhat on the political programme, or have you done so already in response to Mr Klejdzinski?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

The situation in Kosovo is extremely complex for several reasons. We recently removed the state of emergency in the province, which was introduced with the primary objective of preventing national conflicts which could have resulted in even more casualties. We are now trying to initiate a peaceful process of negotiation between the different nationalities in the province to find a new balance. Our intention is that that should be done within the framework of a democratic multi-party system which we expect to be in place in the province soon – in the entire Republic of Serbia.

The law on a multi-party system in the republic is already with the Assembly. We can expect that all political forces that are ready to participate in the normal political process of solving the problems of Kosovo will be able to participate legally and to the full to influence the final solutions.


I understand that, recently, quite a large number of police officers were changed in the Kosovo province. Do you think that, if there were fewer police officers of a certain origin and more of ethnic Albanian origin, tensions would be lessened?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

As far as I am aware, these changes were made to consolidate the legal situation in Kosovo. The legal institutions there were very weak for many years, as were the courts and the police forces. Those changes will not influence in any way the democratic process that I have described and which we expect to take place in Kosovo.

Mr RUFFY (Switzerland) (translation)

I should like to thank you, Mr President, for discussing the matter of Kosovo. I would like to ask a question, expanding on what you have said.

Is it conceivable that Kosovo will, one day, be a full republic, and that the unbalanced relationship between Serbia and Kosovo will be resolved?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

I cannot predict what will happen in the future. Our aim now is to open the democratic process in Kosovo, with political discussions and negotiations. As I have already said, Yugoslavia has been preparing a new constitution and everybody will participate in the new discussions in the legal institutions and in the legal process. The final and lasting solution will be the one that will be accepted by everybody in Kosovo and in Serbia. We are very much aware that no solution is possible which is based only on the interests of one side or one nationality, and that everybody will have to agree to some compromise to live together in the province with all their differences, different cultures and nationalities. We should very much like emotions to cool a little and rational discussions to start so that we can find adequate legal solutions in the new constitution.

Mr MARTINEZ (Spain) (translation)

Mr President, would Yugoslavia’s entry into the Council of Europe and its subsequent active and committed participation in the process of European construction entail giving up the non- aligned status proclaimed by Yugoslavia for many years, or do you believe that non-alignment is compatible with the new Europe, which will be achieved by throwing off the structure of blocs which has divided our continent since the end of the second world war?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

Yugoslavia chairs the Non-Aligned Movement and we are still active in non-aligned policy. We think that our orientation towards Europe is now compatible with our activities in the Non-Aligned Movement. We are very much aware that now there are no more tensions between the two blocs and that the Non-Aligned Movement must change. We declared new principles for the Non-Aligned Movement at the conference in Belgrade and we now focus mainly on economic issues, and on the North-South problem which we consider is still serious. There is a stalemate in the development process throughout the world and Yugoslavia will remain active in solving that problem. The Non-Aligned Movement can still contribute something to the world processes when there are some open political and economic problems. We believe it to be an additional forum for international co-ordination that can sometimes contribute to efforts of other organisations, especially the United Nations. Yugoslavia does not think that the Non-Aligned Movement’s orientation is incompatible with its integration with Europe.

Mr MARTINEZ (translation)

I should like to thank the Yugoslav President and assure him that his presence here is a cause for celebration for many Spanish democrats. I am thinking in particular of the Spanish socialists who have taken his country as a symbol of national unity, of friendship and solidarity with those who fought for years against the fascist dictatorship in my country. Render unto Caesar the things which are Caesar’s and unto God the things which are God’s.


What role do you see for the Non-Aligned Movement in future, in view of the changing political situation between East and West?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

We consider the changes in the relations between the two superpowers as a realisation of the goals and desires of the non-aligned countries. We welcome these new developments. There are still regional political crises all over the world, involving different countries, including members of the Non-Aligned Movement. The Non-Aligned Movement, as a forum for international co-ordination, can contribute to solving some of the regional political problems. As I have said, we should like to contribute to the North-South dialogue, mainly on economic issues.


Do you see any conflict between belonging to the Non-Aligned Movement and your country’s aspiration to join the European Community? If not, how do you correlate those two positions?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

I have answered that question, at least in part. Our aspirations to integrate with the European Community and other European bodies are not in conflict with our present role in chairing the Non-Aligned Movement. Yugoslavia has always been opposed to the Non-Aligned Movement being a formal organisation with formal requirements. It is an informal international organisation and it does not prevent any member from participating in regional, economic or political integrations, such as the European Community. We have changed the practice of the Non-Aligned Movement and we are now ready for co-operation with everybody and to integrate with all countries. We avoid ideological or any other confrontations. Strictly speaking, we are an additional form of international co-ordination which focuses on special interests which are, perhaps, not completely covered by other international organisations.

Mr ROKOFYLLOS (Greece) (translation)

In addition to the traditionally very warm bilateral relations between them, Yugoslavia and Greece have recently played a leading role in promoting co-operation between the Balkan countries.

In welcoming your presence here as a herald of your future accession to the Council of Europe, which is a beacon of freedom and of the rights of man and of peoples, I feel it natural to ask you about the immediate future prospects for Balkan co-operation.

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

Co-operation in the Balkans is of vital interest to European and world peace. Yugoslavia is in favour of developing cooperation between the Balkan countries. We participate actively in different forms of co-ordination between the Balkan countries. We can see that there are many problems in those countries. Sometimes we face similar problems inside Yugoslavia. There are problems involving the minorities and co-operation between neighbours. Yugoslavia is ready to participate and to contribute as much as possible to ease all the tensions between the Balkan countries, especially the minorities.

Mr ROKOFYLLOS (translation)

From another point of view, I should like to ask you if you intend to ease, or even to remove all restrictions on land transport across your country, through which all traffic between Greece and the Community must pass?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

We should very much like to integrate fully with Europe and to develop completely our traffic infrastructure, which is not sufficiently developed. It is one of the most important areas for our co-operation, especially with the European Community. We have no intention of limiting or closing traffic access across Yugoslavia. On the contrary, we should like to find all possible ways of developing it in co-operation with other European countries, especially our neighbours and the European Community, which is as interested in that as we are. Perhaps some delay in the development of our traffic infrastructure was caused by our development problems, especially to the service that I mentioned, as I tried to explain in my speech. The economic situation in Yugoslavia is improving and, in the near future, we shall do a great deal to develop transport facilities and the whole traffic infrastructure.

Mr GARClA SANCHEZ (Spain) (interpretation)

congratulated Mr Drnovsek on the recent transformation in the Yugoslav economy, which in 1987 had been suffering 100 % inflation and negative growth in GNP but had made great progress since then. Could such progress be maintained?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia (interpretation)

thanked Mr Garcia Sanchez for his kind words. The state of the Yugoslav economy was now much more satisfactory. The government had brought inflation under control and had announced the convertibility of the Yugoslav currency, the dinar. He hoped that the economy would further develop to become fully compatible with those of EEC countries.

Mr GARCIA SANCHEZ (interpretation)

asked how the increase in imports into Yugoslavia would affect the balance of payments position.

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia (interpretation)

said that the Yugoslav Government had liberalised the rules relating to imports, and he hoped that further steps in this direction would be taken over forthcoming months.

Mr BRUTON (Ireland)

I, too, congratulate you, Mr President, on the success of your economic policy in bringing down inflation from 1 200% to around 30% in almost a year. However, I have read that one factor in that is that the Central Bank in Yugoslavia must be almost unique in Europe in that it has the power to propose legislation direct to the legislature, bypassing the government. Does that show any weakness in the economic powers of the Presidency and the Executive Council? How has that proposal worked? Are there any forms of assistance that you would like other European countries and institutions to give to Yugoslavia in dealing with the effects of your successful economic policy, for example in the area of unemployment and redundancies, which I understand are a fairly substantial problem?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

We are trying to establish a completely independent Central Bank because in the past we had a bad experience when politics were involved too much in our Central Bank and our economic affairs. Now we should like to separate the two. There are authorities in the Presidency that can sometimes support the Central Bank in urgent measures, when the Federal Parliament cannot find a solution that is acceptable to everybody.

With regard to our present difficulties, we are very much aware that many problems lie ahead and that the process of restructuring the Yugoslav economy is not yet finished. We expect many bankruptcies in the near future and it is even possible that unemployment will increase. However, we are very much aware that that is a necessary process that we must face and we intend to insist on economic changes. We should like the new development cycle to start as soon as possible. We expect international co-operation mainly in the form of direct foreign investment.

We have carried out our economic programme without foreign assistance up to now. Some new credits will probably be necessary, but not to such an extent that it will mean another increase in the Yugoslav external debt. We succeeded in diminishing our external debt in the past eighteen months, from 20 thousand million to 16 thousand million dollars and we should like to continue that process of normalisation of our international financial relations.


Have you yet established a federal system of unemployment compensation to help those who become redundant as a result of restructuring?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

Yes, we established a federal system in addition to the republican system that existed before. We established special funds at federal level to support the process of the restructuring of the economy, especially to ease the problem of unemployment. Those special funds from the central budget are now directed towards that purpose.

Mr PAHTAS (Greece) (translation)

Our Assembly has adopted a very clear stance concerning the division of the island of Cyprus, a member state of the Council of Europe and also one of the non-aligned countries. We deplore the occupation and believe that it must come to an end.

You have argued on behalf of this just cause over many years in the United Nations, making an enormous contribution to the adoption of decisions to this end.

How do you, as Chairman of the non-aligned countries, regard the fact that the United Nations resolutions have not yet been complied with, although they are the key to a just and equitable solution of the Cyprus problem? Would you also be so kind as to tell us briefly about your experience with self-management in your country?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

Yugoslavia, in its capacity as Chairman of the Non-Aligned Movement, tries to support activities directed at solving the Cyprus problem, on the basis of the United Nations declaration. We have co-operated, sometimes very closely, with the Secretary General of the United Nations and with the Cyprus authorities. We still support those activities and that direction of policy, but we cannot influence all the different parts of the process, so we are limited to such support and to giving further support to a solution on the basis of the United Nations declaration.

Mr PAHTAS (translation)

Could you reply briefly to my short question on self-management?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

In Yugoslavia, we developed a complex system of self-management and self-determination, also at local level. We are now changing the political system, to introduce various political parties into it, but we still try to maintain the institutions that proved to be quite good and quite successful in solving our problems, especially at local level, when we think that a large majority of people are included in the self-management process. We have tried to rationalise all the self-management activities as much as possible to make them compatible with the country’s material possibilities. The changes are mainly directed towards rationalisation and maintaining only the necessary structures – the others have been eliminated.

Mr JESSEL (United Kingdom)

Members of the Committee on Economic Affairs and Development, who met in Belgrade in May 1989, greatly appreciated the warm welcome that they received. Thank you very much, Mr President.

On the battle against inflation, I should like to congratulate the President on the dramatic reduction in inflation from 1 200% to 30% in one year. How was this done? How did the government win public acceptance for the drastic measures that must have been needed?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

Thank you for your friendly words, Mr Jessel. We introduced a severe anti-inflation programme which was based on strict monetary policy. That was the first key measure. In our second measure, we fixed our currency, the dinar, to the German mark and declared a rate of seven dinars to one German mark. We have successfully maintained that relationship until now.

We liberalised imports, which created additional supply in our market and ensured that there was a necessary balance between supply and demand. In our last important step, we introduced certain controls of personal incomes – salaries – in the first stage of the programme. The programme was based mainly on market measures, liberalisation and deregulation rather than on administrative measures.

This was accepted by the majority of the population because it was almost impossible to continue to support inflation. There was complete disorder in the economy. It was no longer possible to measure our national currency. Foreign currency was increasingly used in general transactions in the country. Those were some of the reasons why we introduced convertibility and fixed the level of the dinar to the German mark, the foreign currency which was most used in parallel transactions during the inflationary period. We can now see that this programme has succeeded, because there was zero inflation in April.

Mr HARDY (United Kingdom)

I am grateful to you for calling me, Mr President. My name should have been on the original list.

May I take it that President Drnovsek appreciates the concern that, as the lid of power bloc confrontation is raised, it should not be replaced by increasing manifestations of the more fevered forms of excessive nationalism? Is he aware that many members of the Assembly share that anxiety? The Assembly has long had an attachment to, and some responsibility for, the rights of individuals and minorities. Bearing that in mind, does the President see any prospect of the Council of Europe serving in an advisory capacity and perhaps in some respects as an appeal mechanism, in an effort to control the spread of that excessive nationalism?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia

We think that the Council of Europe, and our membership of it, could contribute much towards solving the internal problems in Yugoslavia, lessening the tensions between nationalities and helping us to overcome the difficulties in what we consider to be a transitional phase. As I explained, we changed the systems and nationality matters emerged with intensity. The prospect of an integrated Europe would help us to overcome the disintegration tendencies inside the country. It would not be logical if Yugoslavia as a whole now entered the process of European integration as a member of the Council of Europe but the process of internal disintegration on the basis of different nations inside the country continued. Integration would be psychologically important for our country and would mean the greatest support for us. We shall very much appreciate all the advice that you can give us during this transitional period.

Mr VALLEIX (France) (translation)

The Yugoslav political system is federal because of the problem of nationalities and minorities.

As you have just reminded us, Mr President, you are as a matter of course taking difficult steps, like those to combat inflation, in line with the profound economic and political changes in your country. The paradox is that the concept of a federal structure is taken to the extreme of a revolving Presidency, thereby enabling each province to have its say in turn.

My question is this: How can you reconcile efficiency with a procedure of this kind?

Following upon the various constitutional reforms implemented over the last two years – and here my question links up with Mr Hardy’s – do you consider it necessary to reform your country’s constitution regarding the powers of the President or the highest levels of authority?

Mr Drnovšek, President of the Presidency of the Socialist Federal Republic of Yugoslavia (translation)

Of course we would like to enhance the efficacy of our management processes. The new constitution provides increased powers for the institutions of the Federation. Nevertheless, given the lack of confidence between the various republics and nationalities and in the light of current conflicts, a system strengthening central State powers would hardly be acceptable. Firstly, we must improve our internal relations.

With regard to the shared State Presidency, decision-making raises real problems because of the majority voting system. Accepting the President of each republic for a longer period would, however, be extremely difficult in Yugoslavia. While remaining fully aware of the weakness of the shared Presidency, we continue to think that it is the best way of taking political decisions.


I have no other speakers on my list. That concludes all the questions to President Drnovsek of Yugoslavia.

Once again, on behalf of the Assembly, I thank you warmly for coming to Strasbourg and addressing the Assembly. I thank you also for answering all our questions. We have learnt a lot about Yugoslavia this morning. Again I thank you, Mr President, for all that you and your country have done in the past for our Assembly and for the Council of Europe.