The Slovenia Times

Law Changes to Enable Rapid Bank Recapitalisation


The changes, which were adopted with 47 votes in favour, make available a total of EUR 4.7bn for state recapitalisation of banks.

Finance Ministry State Secretary Mateja Vraničar told the Finance and Monetary Policy Committee shortly before the plenary vote at today's extraordinary session that the bill would allow for much faster recapitalisations than possible through the Bank Asset Management Corporation (BAMC).

Under the changes, the recapitalisation would be financed with loans (capped at EUR 1bn in 2013 under the budget implementation act) and existing liquid assets in the budget.

The liquid assets encompass the state's deposits in total of EUR 3.5bn, which includes EUR 1.2bn earmarked for bank recapitalisation in the 2013 budget, and some EUR 200m intended for company recapitalisation that could be transferred from the budget B-balance sheet.

The opposition obstructed both the committee meeting and the plenary session discussing the changes, which were fast-tracked through parliament.

The committee voted down the opposition's amendment to have the National Assembly approve all recapitalisation plans once the stress test results are revealed.

The coalition Social Democrats (SD) MP Matevž Frangež said at the plenary that "extraordinary times called for extraordinary measures".

President of opposition People's Party (SLS) Franc Bogovič was very critical, saying that the changes strip the National Assembly of its powers, leaving the government free to decide about which toxic loans to transfer to BAMC and how big the taxpayers' burden would be.

The opposition Democrats (SDS) MP Andrej Šircelj pointed out that it was parliament rather than the government that was in charge of public finance, while New Slovenia's (NSi) Jožef Horvat labelled the move a "crude violation of parliamentary democracy or even its end".


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