The country study is based on the findings of several missions that visited Slovenia during the second half of 1997 and 1998. The report analyzes economic developments of the past few years and policy options linked to the challenges faced by Slovenia in its pursuit of European Union membership.The report is composed of two volumes. 'Volume I' is a summary report that condenses main findings and conclusions. The report focuses on: • elimination of the remaining structural weaknesses as means to maintain the macroeconomic stability; • increasing the competitiveness of the Slovene economy abroad; and • redefining the size and roles of the public and private sectors. 'Volume II' is the main report. It provides the assessment and technical analysis of selected key sectors of the Slovene economy. While each chapter is sector-specific in nature, the EU accession process dominates them. 'Volume II' covers the following issues: • Review of the economic performance during the transition • Analysis of the growth and income convergence issues • Study of the environment sector • Assessment of the foreign trade sector • Challenges of the financial sector • Enterprise sector issues • Labor market and social policies • Agricultural sector • Municipal governments