Xenophobic, protectionist, and on the verge of economic decline.

LJUBLJANA, Slovenia—At a little wine store on one of Ljubljana's central boulevards, the proprietor is proud to offer customers a bottle of the local red wine, Teranton, vintage 1988. "It's older than our country," he says with a smile.

Welcome to Slovenia, the poster child of the new Europe. On May 1 it will be one of 10 countries to join the European Union. With the exception of the islands of Cyprus and Malta, all will be former Communist states. Slovenia is widely vaunted as the most promising of them all.

With its clean and bustling downtown, charming bridges crossing the Ljubljana River, and Hapsburg-yellow municipal buildings, Slovenia's capital is a picture postcard of the post-Tito Yugoslavia that should have been. For many of the country's 2 million inhabitants, it is. Slovenia achieved its independence after just 10 days of fighting, thus side-stepping the horrendous ethnic conflict that tore the rest of the former country apart. The newly formed nation inherited a modern infrastructure, excellent trade connections, lots of tourism, and modern factories. The Slovenian gross domestic product has had solid growth of between 2 percent and 4 percent over the last five years, while Western Europe is fighting off stagnation. The average take-home pay per month is more than 700 euros, compared with about 400 euros in Hungary. Today, Slovenians enjoy the highest standard of living among the former Communist bloc countries entering the European Union.

As nation-states go, Slovenia is the equivalent of a quiet but comfortable middle-class suburb. But like any suburban fairy tale, the Slovenian story has its dark sides. The tiny Alpine country prides itself on its conservatism, with an overwhelmingly homogeneous Catholic population that likes to identify itself with the Sound of Music values of Germanic Central Europe rather than the chaotic Balkans to the south.

But Balkan chauvinism is not as far away as many Slovenes would like to think.

Fireman Anton Debevec found that out in 1992 when he tried to register his daughter's car only to have his identification papers confiscated and declared void. Although he was born in Slovenia, he had lived in Serbia as a child, and so the Slovenian authorities considered him a Serb. Debevec was told he was no longer a legal resident of Slovenia. He lost his health insurance, his right to own property, and his pension. "I was suddenly without any rights at all," said Debevec. "I was a foreigner in my own country."

Debevec had been erased.

When Slovenia declared independence in 1991, the more than 100,000 Bosnians, Serbs, and Croats living there were given six months to apply for citizenship. Most completed the necessary paperwork and became Slovenian citizens. But at least 18,000 did not register properly, either through ignorance, because they thought they could maintain their residence status without changing their citizenship, or because they could not obtain the necessary papers because of conflicts, such as the Bosnian Muslims who were told to go to their Serb-occupied hometowns for their birth certificates.

These 18,000 lost their citizenship and all their rights. They became known as "the erased people." "It was a massive illegal act of political vengeance," said Matevz Krivic, a former judge for Slovenia's constitutional court.

Like Debevec, most of the erased didn't find out about their illegal status for months and sometimes years. They lost their jobs and access to health care, the right to own property or collect pensions. Some were deported and at least seven committed suicide. Aleksander Todorovic, the head of the Association of Erased Persons, who found that he'd lost his legal status when he went to register his daughter's birth, calls it "a refined form of ethnic cleansing."