The Slovenia Times

Finance Minister: Slovenia Not Thinking of Using ESM


Slovenia is being unofficially increasingly mentioned in connection with the countries that have or may ask for financial assistance. Austrian Finance Maria Fekter today publicly mentioned Slovenia as a potential candidate for assistance from the new permanent mechanism that became operative today.

"We are for now not thinking of having to use the ESM," Šušteršič said in response. He repeated that the government was determined to do all that is necessary to avoid the need of having to ask for aid, which he said would not be the best solution.

"The best solution is taking care of ourselves. Last week we had two important pieces of legislation passed in parliament - the act to manage bad loans and the sovereign holding act. I hope they will be implemented fast," the minister said.

He repeated the government's view that the operation to clean up bank's balance sheets could be financed with the country's own funds, mainly through the later sale of the banks' assets and the banks themselves.

The minister conceded that the transfer of bad loans would create a public debt at the beginning. But as long as the country is capable of borrowing in markets, he believes it sensible to finance potential additional recapitalisations of banks in this way.

Slovenia is formally not on the agenda of today's session of the Eurogroup, to be discussing the countries that have asked for aid or will presumably do so, such as Spain and Cyprus.

Nevertheless, Šušteršič said the ministers were informally discussing developments in individual countries, and were well informed about the situation in any of them.

"We also had a word with the Austrian minister about our [Slovenia's] adopting a law last week that is trying to solve the problem of bad claims," the minister said in response to Fekter's comments earlier.

His explanation of why Slovenia is being mentioned as a country that might need help was the challenging situation in the country and the high interest rates on the country's borrowing as well the question of whether Slovenia would carry out government-sponsored reforms.

He said the country had done what was expected of it in the field of public finances, that is a serious cut in the budget deficit, while he noted that the eurozone was also closely monitoring statements about potential referenda against government-sponsored laws.

Aside from keeping the other members informed about its action, Slovenia has also formally presented the measures it is taking to the International Monetary Fund (IMF), European Central Bank (ECB) and the European Commission.

"The response was positive - in the sense that the measures are right, but that we must also carry them out," the minister said.


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