Slovenia Easily Embraces New Statehood : Balkans: The republic has emerged from the wreckage of Yugoslavia with dreams and dignity intact.

Masters of their own affairs for the first time in 1,400 years, Slovenes embraced their new statehood Thursday by wheeling and dealing with Germans, seizing control of their airspace and heaping European bankers with plans for new highways and modern transport.

The scars of last summer’s war have not all healed, and Slovenia still faces an uncertain battle for recognition by the United States and Russia. But the 2 million people of this serene republic, tucked between the Alps and the Adriatic, have emerged from the wreckage of Yugoslavia with their dreams and their dignity intact.

Doubts about the future are drowned out by the hum of fax machines and the roar of heavy equipment deployed to repair the bruised economy.

War with rival Serbia and the Yugoslav federal army still confronts neighboring Croatia, and the four other republics still unrecognized after Yugoslavia’s demise have been left in a diplomatic limbo.

Of the six Balkan republics bound for 73 years by the Yugoslav alliance that has finally collapsed, only Slovenia has been given much chance of going it alone. Manageably small and unusually cohesive, some believe Slovenia could even outpace most of Eastern European in the race to secure Western lifestyles.

Serbia continued to rattle its political saber, with the prime minister warning Thursday that European recognition “represents quite a risk” and President Slobodan Milosevic insisting that Yugoslavia is not yet dead.

But Slovenian leaders proudly point to the grip they now have on both internal and foreign affairs, having divested themselves of all federal controls since declaring independence June 25.

They have the advantage of having no common border with Serbia or large populations of Serbs that have exposed all other republics to insistent territorial claims by the dominant republic.

The broad coalition of political parties governing Slovenia is the most stable leadership in the troubled Balkans. Despite 10% unemployment, an “interim” currency, declining production and shrinking real incomes, the economy now appears to be stabilizing, and there is little threat of labor unrest.

Yet Slovenian leaders, espousing the no-nonsense determination that allowed the tiny republic to boot out the Yugoslav army Goliath after only a 10-day war, say that achieving statehood was the easy part. “We have to become an autonomous and prosperous state,” President Milan Kucan said after a dizzying day of diplomatic exchanges and business chats. “Our public is aware of the situation, but will get impatient if we do not show them results.”

He also expressed concern that without the diplomatic blessing of Washington and Moscow, Slovenia will not have achieved full independence. “Without the recognition of the United States of America, we don’t have all the elements necessary to pursue our policies and become a full-fledged member of the international community,” said Kucan, 51, who has guided Slovenia since it was still a Communist component of Yugoslavia in the mid-1980s.

America-bashing has become a favorite sport of Croatian officials irritated by Washington’s reluctance to acknowledge the Balkan federation’s breakup. If Slovenian leaders share that view, they prudently cover their disappointment with diplomatic niceties.

“We hear from our representatives in Washington that the climate in the State Department may be about to change,” said Deputy Foreign Minister Zoran Thaler. “We understand that a supertanker can’t change course in a short time, but hopefully the movement will start soon.”

The lack of American recognition will prevent Slovenia from joining the United Nations or gaining membership in organizations vital to its economic recovery, such as the World Bank, the International Monetary Fund and the Conference on Security and Cooperation in Europe. But the consequences of recognition by more than 30 countries, from Iceland to Australia, has allowed the little country to shift into independence swiftly and smoothly.

One of the most significant boosts from recognition was Slovenia’s recovery of the right to reopen its airports after a six-month closure imposed by the angry Yugoslav government after Slovenia defeated a bungled federal army invasion this past summer.

On Slovenia’s first day of recognized independence, officials signed an interim agreement with Austria to manage air traffic. They brought in international experts to test and verify landing and ground control systems, said Information Minister Jelko Kacin. “We’re ready. We were prepared for this,” he said. “The airports will be open, and we will be resuming flights either tomorrow or the day after.”

Another immediate consequence of foreign acceptance is Slovenia’s eligibility for help from the European Bank for Reconstruction and Development, which aims to assist the former Communist countries of Eastern Europe in spurring private enterprise and develop market economies. A delegation from the London-based bank has been going over Slovenia’s books and projects for the past week.

Bank Vice President Klaus Hoffarth issued an optimistic outlook after his talks, saying there was no legal hindrance to extending loans for improving highways, railroads, phones and power generation. “Every ministry has a large number of essential infrastructure projects,” he commented, a bit overwhelmed by what was an avalanche of building and business ideas. “It is important after this first, initial contact that the appropriate agencies in the government of Slovenia establish a list of priorities. . . .”

Slovenia was the most productive and advanced of Yugoslav republics, accounting for more than 30% of hard-currency exports and one quarter of the former federation’s national income. Constituting only 8% of the federation’s population, Slovenes also had the highest living standards and an average income above that of European Community members Greece and Portugal.

Domestic commerce, which accounted for nearly 60% of Slovenia’s economic activity, has suffered as wages and buying power have been hard-hit by rising unemployment and inflation that peaked in October at an annual rate of about 150%. But Mitja Otorepec of the Slovenian Chamber of Economy says the republic appears now to have gotten over the worst of its recession, with inflation falling off to about 6% per month.