While the sovereign holding referendum seems to be out of the picture, it is still possible that Slovenians will be deciding about the bad bank, as another trade union is challenging the act.

The sovereign holding referendum was rejected 20 to 16, while the bad bank referendum was rejected with 12 votes in favour and 24 against. To initiate the referenda, these would have to be backed by absolute majority in the 40-member National Council.

The referenda proponents claim that the sovereign holding act fails to offer concrete solutions on the implementation of the act. "We never got the answer on the content of the act," said Mihael Jenčič, one of the proponents.

They find it contentious that the state would let the holding manage all state assets and exclude itself from managing it. Moreover, the act does not follow the principle of the state withdrawing from state-owned companies, the proponents say.

They also do not see the reason to abolish the State Asset Management Agency (AUKN), which they believe operates well.

After striking a deal with the Trade Union of Energy Workers, Finance Minister Janez Šušteršič defended the act in front of the National Council, rejecting the claims voiced by referendum proponents.

He underlined that the government did not intend to turn the holding into a "tool...for mass privatisation". He pointed out that the existing act also does not include a strategy on state asset management. Moreover, the profits from state-owned companies do not go into state budget under existing legislation.

As for the bad bank act, the councillors warned that cleaning of the banks' balance sheets could take a very long time and could cost the state much more than capital increases.

The bad bank referendum proponents believe Slovenia needs to restructure a number of companies, bit this does not demand a restructuring of banks. They are also sceptical about the bad bank out of fear that the banking system would fall under the influence of politics.

Šušteršič rejected claims that a bad bank would be more expensive than capital increases, saying that both approaches cost the same. The only question is which approach is faster, according to the minister. He believes bad bank is the better choice and that the move also helps resolve problems of indebted companies.

If the National Council endorsed the referenda proposals today, this would automatically mean that the votes would be called, while trade unions and other referendum proponents need to collect 40,000 signatures of support to have a referendum called.

Šušteršič expressed satisfaction after the referenda initiatives were rejected. "I am happy that reason prevailed at the end." He believes that referendum proponents would not be likely to succeed at the polls. But if called, the votes would hinder the solving of bad claims for a year.

While he had reached a deal with the energy trade union, the ministry is still in talks with the Trade Union of Chemical, Non-Metal and Rubber Industries trying to get it to drop the referendum efforts against the bad bank. "These talks are taking longer, are more demanding," the minister commented.

Unless the trade union drops the attempt by tomorrow, parliamentary Speaker Gregor Virant will set a term in which they will have to collect 40,000 signatures. "Once they start collecting signatures [avoiding the referendum] remains an option, although it would be a bit harder."

If the bad bank act is rejected in a referendum, this would cause a crisis in Slovenia sooner than expected. He believes that in this case, foreign aid would remain one of few options left to Slovenia.