Slovenia May Ask for Bailout in July, Prime Minister Jansa Says

[poiuytrewq0987]

Slovenia may ask for an international bailout if lawmakers fail to adopt legislation next month that would limit public spending, Prime Minister Janez Jansa said in an interview with a local radio station.

“July will be the moment of truth since parliament will vote on the golden fiscal rule and on changes to the way referendums are organized,” Jansa was quoted as saying in an interview with Koper-based Radio Ognjisce. “If we continue to get more and more debt, we will see a Greek scenario here and this generation will have to pay dearly for the stupidity of those that have delayed decisions.”

http://www.businessweek.com/news/2012-06-27/slovenia-may-ask-for-bailout-in-july-prime-minister-jansa-says

[The Lawspeaker]

Ooh for f.ck's sake...

[poiuytrewq0987]

Ooh for f.ck's sake...

It seems like smaller countries with a high debt to gdp ratio will be the next ones to ask for a bailout... first Cyprus now Slovenia.

[dralos]

no way,this aint true,alenka wont let this happen

[The Lawspeaker]

We have elections coming up in September. I think that if Slovenia, Cyprus, Spain, Italy etc. all need to be bailed out that we can expect a landslide victory for Eurosceptic parties here.

[poiuytrewq0987]

Slovenia alone will be supplying more capital to its troubled largest bank, NLB after Belgian shareholder KBC decided not to subscribe to a new share issue.

"After very careful and thorough consideration ... KBC has today decided not to participate in the short term capital solution proposed by NLB and the Republic of Slovenia," KBC said in a statement sent to Reuters June 29.

On June 27 KBC and the government, which are the major owners of NLB, had agreed that KBC would buy new shares worth EUR61m by June 30, raising its stake in the bank to 33.9% from 25%.

At the same time the government would buy contingent convertible bonds (CoCos) worth EUR320m. Both moves would raise NLB's Core Tier 1 capital solvency ratio from 6% to 9% of assets as required by the European Banking Authority.

The finance ministry said June 29 KBC decided to back out after it failed to get an immediate assurance from the European Commission that it could keep its stake in NLB even beyond 2012. Because of state aid it received in the past, KBC has been obliged under EU rules to sell its stakes in some other banks, among them in NLB.

The ministry said NLB's new share issue will now be purchased by state-owned investment funds SOD and KAD, which will reduce KBC's stake in the bank to about 22% while the state's stake in NLB will be raised to about 60% from 55% at present, according to a calculation by Reuters.

"KAD and SOD will use reserves ... so there will be no need to take on new debt or to raise the budget deficit," the ministry said in a statement.

The government hopes to sell more than half its stake in NLB to a strategic investor by the end of the year to leave it with a 25% holding.

Meanwhile, the country's prime minister is reiterating Slovenia does not need international aid.

"It is our assessment that based on the already passed measures, in particular the act on the balancing of public finances, Slovenia as a state is at this point in no danger of asking for help," Prime Minister Janez Jansa said in Brussels at the end of the EU summit June 29.

The only issue still left unsolved is the banking sector, he added. However, since due diligence of Slovenian banks is still under way, it is too early to make any kind of assessments as regards to the banks' need for financial aid.

http://www.balkans.com/open-news.php?uniquenumber=149822