Slovenia is by far the most prosperous of the applicant states knocking on the EU's door

If you walk across the Triple Bridge that links the Old Town with the rest of Ljubljana, you pass beneath an illuminated sign…

If you walk across the Triple Bridge that links the Old Town with the rest of Ljubljana, you pass beneath an illuminated sign suspended from a steel girder. On one side, in blue, it reads "EU Citizens", just like a passport control barrier at an international airport and on the reverse, in black, "Others".

The signs are a conceptual art work, part of "Manifesta", a big contemporary art show taking place in the Slovenian capital this summer. But the nonchalant response of local people to the signs leaves no doubt that the citizens of this little Alpine state feel quite confident that they will soon become full members of the EU.

With average wages close to those in Portugal, Slovenia is by far the most prosperous of the central and eastern European states knocking on the EU's door. If inflation were a little lower, the former Yugoslav republic would even meet the Maastricht criteria for adopting the euro.

In fact, Slovenia's two million citizens are doing so well outside the EU that some opinion formers are asking if they really need to join at all.

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"Nobody's talking enough about the possibility of staying out of the EU and of being an equal partner outside. I think this initial enthusiasm for the EU has diminished in the past few years because of a more realistic approach to membership," said Mr Mitja Mersol, editor of Delo, Slovenia's leading daily newspaper.

Some Slovenians are annoyed at the prospect of having to close down the duty-free shops that attract thousands of tourists from neighbouring Austria and Italy, while others are nervous about allowing foreigners to buy property in their country.

Dr Janez Potocnik, Slovenia's chief negotiator with the EU, dismisses talk of going it alone and points out that the country's proximity to its former Yugoslav partners is a compelling reason to avoid isolation.

"Of course we could also survive outside the EU. But it is not only economic, it is also political, it's about security. We have been very near conflict and this is something that gives us a lot of reasons to prove that we want to be what we think we are - a central European country," he said.

In these hot August weeks, when most of Ljubljana decamps to the seaside, many of Slovenia's politicians are hard at work in the city, preparing for a general election on October 15th.

The prime minister, Mr Andrej Bajuk, announced this week that, following the collapse of his rightwing government after less than four months in office, he is setting up his own political party.

A former banker who returned to Slovenia last year after a lifetime in Argentina, Mr Bajuk speaks poor Slovenian and his opponents predict that he will disappear from the political scene as abruptly as he entered it.

"He was three years old when he left Slovenia. He was never a citizen of Slovenia. He never paid a single dollar or peso to our budget and he's now our prime minister. People cannot accept that," according to Mr Jelko Kacin, a former defence minister who now chairs Slovenia's parliamentary foreign affairs committee.

Among Mr Bajuk's supporters is Ljubljana's outspoken Catholic Archbishop, Dr Franc Rode, who has used the Church's improved status since independence to introduce his own political agenda. One of his demands is for school catechism classes to be recognised as an optional subject towards school qualifications. He is also pressing for the return of Church property confiscated by the communist regime in Yugoslavia.

The debate about the relationship between church and state has been accompanied by a bitter dispute over compensation for anti-communists, such as Mr Bajuk's parents, who supported fascist Italy and Germany against Tito's communist partisans. Thousands of anti-communists were massacred after they were handed over to Tito by the western allies at the end of the war.

"It's being brought up more and more. By gaining independence, Slovenia opened its doors to its Diaspora, including Slovenians who were forced to leave the country in 1945. They are voicing some past grievances about injustices they were subjected to after the war. It was fair in 1990 when we gained independence that some of the major mistakes and crimes were admitted by representatives of former regimes. But the debate has become very divisive and polarising," Mr Mersol said.

Liberals warn that the Church may be pushing its luck in attempting to influence political life and Mr Mersol believes that the archbishop's aggressive approach will ultimately prove counter-productive.

But he believes that, even if the current debates are divisive and sometimes unpleasant, they are a necessary stage in Slovenia's democratic learning curve.