The Slovenia Times

PM Going to Brussels to Stop Speculative Attacks on Slovenia


Bratušek will begin her visit with a meeting with European Commission President Jose Manuel Barroso on Tuesday morning. A meeting with European Council President Herman Van Rompuy is next on her agenda while talks with European Parliament President Martin Schulz are scheduled for the evening. Bratušek is also expected to hold meetings with several Slovenian MEPs.

Bratušek can expect a fair amount of media attention during her visit to Brussels. "Many eyes will be on the prime minister during her Tuesday premiere. She better come armed with a good communications strategy. Not only banks but also politics will be in the limelight this time," a foreign Brussels insider told the STA.

Some foreign media have run stories over the past weeks wondering whether Slovenia would follow the footsteps of Greece, Ireland, Portugal, Spain and Cyprus to become the next eurozone member to require a bailout.

Bratušek has rejected these allegations, as has Finance Minister Uroš Čufer. Outgoing central bank governor Marko Kranjec also voiced a "categorical" denial of this scenario.

Regardless of the truth behind the allegations, Slovenia is on the Brussels radar. Barroso warned as early as last June that the Slovenian banking sector required an ambitious response, while Monetary and Economic Affairs Commissioner Olli Rehn backed in November the government's plans for a bad bank.

EU sources warned at the end of March that the bad bank should be established within two months if Slovenia wanted to avoid a bailout.

Another likely topic of discussion will be Slovenia's referendum rules, which have been criticised in the past for preventing the implementation of unpopular but necessary reforms.

Slovenia will have to borrow at least EUR 2bn by summer and an additional EUR 1bn by the end of the year. But costs of borrowing on the financial markets have recently seen an increase, with the implicit interest rate on Slovenia's ten-year bonds currently at around 6.20%.

Brussels has also called for privatisation of state companies and is closely monitoring the consolidation of Slovenia's public finances. It is already clear that Slovenia will fail to do its homework - eliminating the excess budget deficit by January 2014 - and will have to ask Brussels for an extension of the deadline by which it must bring its annual structural deficit under 0.5% of GDP.

As a signatory of the fiscal compact, Slovenia must transpose the deficit rule into its legal system, preferably at the constitutional level. But the procedure to do so has been brought to a standstill due to objections voiced by the former opposition, which included the now ruling Positive Slovenia (PS).

The National Assembly is expected to take up the matter again on Thursday this week - at an extraordinary session called by the opposition Democrats (SDS).


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