Brussels, 27/09/2013 (Agence Europe) - Slovenian prime minister Alenka Bratusek has admitted that the country's central bank is in talks about a potential request for international aid from the eurozone to stabilise the country's banks.
“We are talking with the Bank of Slovenia also about that possibility, about what it would mean to get help for the banking sector, but there is no need to speculate from that that Slovenia would actually need help,” she said on Thursday 26 September, according to Reuters. On Monday, the head of Eurogroup, Jeroen Dijsselbloem, will be in Ljubljana.
Three state-owned banks dominate the country's financial sector - Nova Ljubljanska Banka D.D., Nova Kreditna Banka Maribor D.D. and Abanka Vipa D.D. - and they are struggling with some €7.5 billion euros of bad debts, which equals 21.5% of GDP of this small country of two million inhabitants. The banking sector is currently under study to determine exact financing needs and the results are expected at the end of November.
The European Commission recently said that Slovenia will be able to sort out its bank problems without aid, although there is little room for manoeuvre and the situation is damaging the real economy. On Friday, interest rates on Slovenian ten-year bonds stood at 6.7%, close to the 7% level considered to be unaffordable. The Slovenian government says that the country's financing needs are covered until April 2014, when €1.5 billion in five-year bonds has to be repaid. (MB/transl.fl)