Brussels, 22/03/2013 (Agence Europe) - Marko Kranjec, a Slovenian member of the European Central Bank's Governing Council, said on Friday morning that he did not think Slovenia would find itself in the same situation as Cyprus. Ljubljana is seen by some commentators as the next country to request international aid to help it bail out its banks. The country's three biggest banks, which between them hold €7 billion of bad debt (20% of Slovenian GDP) are state-owned.
On Wednesday evening, the Slovenian parliament voted in favour of a four-party coalition government, with Alenka Bratusek as prime minister, after a vote of no-confidence last month in the previous government under Janez Jansa. Bratusek's main objective is to reduce the austerity measures in order to protect growth, while continuing to consolidate the budget. The job of finance minister is expected to go to Uros Cufer, a banker at the Central Bank of Slovenia. Credit rating agency Fitch reacted positively to the end of political uncertainty in Ljubljana, but said that many tough problems remained. Fitch says that Slovenia will be able to avoid having to be bailed out.
On Wednesday, after a fact-finding mission to Slovenia, the International Monetary Fund called on the country to pursue the reform process to get out of recession, adding that sorting out the financial industry's problems would also be necessary. Like Fitch, the IMF recommends that a “bad bank” be set up to hive off bad debts from the other banks. The Slovenian economy is expected by both the IMF and the European Commission to return to growth next year. (EL/transl.fl)