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"Slovenia is facing a very demanding task of not only launching necessary reforms but also building the indispensable national consensus of carrying out these reforms," Barroso told the press in Brussels on Tuesday.

"I've come out of this meeting with a feeling of confidence that Slovenia will rise to the challenge," he added.

Bratušek, for whom this was the first visit abroad since taking office on 20 March, responded to questions about whether Slovenia would need international aid by saying that those who want to speculate should do so on the basis of facts and figures.

She pointed out that Slovenia's macroeconomic and financial standing is still in many ways better than the European average, highlighting national debt as being well below the EU average. She also stressed that Slovenia was not a tax haven but was rather an export-oriented economy.

"Slovenia is a strong and stable country, probably stronger than many other European countries," she said in reiterating that the country was capable of dealing with its problems on its own.

She announced that the government was "working day and night on measures" aimed at dealing with fixing its ailing banking system and restarting the economy, while calling on European policy makers to ensure that small countries like Slovenia have the conditions to deal with their problems on their own in the face of rampant market speculation.

Bratušek announced that the country's main priorities in the coming months were fixing the banking system, carrying out privatisation and consolidating public finances.

The first task will be the banking sector, she said, suggesting that the bad bank could be up and running by June. Moreover, the prime minister announced that Slovenia could privatise the first of several state-owned companies by the summer.

Meanwhile, Barroso pointed to the need for Slovenia to restore confidence. "I shared with the prime minister the view that credibility can only be established through a concrete and hands-on reform strategy that addresses not only the specific situation of the banking sector but the main macro-financial bottlenecks to growth."

In this respect, Bratušek reiterated that the new government would not shy away from efforts to consolidate public finances. "Absolutely we will continue with austerity...but in a way that will ensure that consolidation does not further hamper economic growth," she said.

Barroso echoed Bratušek's sentiment as regards Slovenia's ability to deal with the challenges on its own, saying that there was no indication that Slovenia would need a bailout.

"You heard the prime minister that Slovenia does not think this will be necessary and a very strong message that they will do everything to avoid this," he said, adding that he was confident that a recovery was withing reach for Slovenia given ambitious and quick measures.

After meeting Barroso, Bratušek also held talks with President of the European Council Herman Van Rompuy and President of the European Parliament Martin Schulz as well as Slovenian MEPs.