Baluarte
06-11-2013, 11:25 PM
SLOVENIA plans to inject 900 million euros ($A1.27 billion) into its troubled banks by the end of the month as the country scrambles to avoid becoming the third eurozone state to be dragged into a bailout by lenders weighed down with bad debts.
Prime Minister Alenka Bratusek told the Czech daily Hospodarske noviny that: "We will carry out the capitalisation according to the central bank's estimate by the end of June."
She said the government would proceed quickly with the Slovenian central bank's estimate of 900 million euros ($A1.27 billion), although the European Commission has a different estimate.
Mountains of bad debt at Slovenian banks have prompted fears the country could soon follow Cyprus and Ireland, who ended up needing massive bailouts by the EU and IMF after rescuing their lenders.
The recapitalisation is needed as lenders unload bad loans and assets to a so-called bad bank, booking huge losses but opening the way to the recovery of the sector.
"Our goal is to transfer the first package of toxic loans to the bad bank by the end of June," said Bratusek.
The country's largest bank, loss-making state-owned Nova Ljubljanska Banka (NLB), approved on Tuesday taking up to 500 million euros in new capital, most of which is expected to come from the state.
On Monday, Slovenia's second bank, NKBM, backed taking up to 400 million euros to open the way to its privatisation.
The Slovenian government has said it plans to ultimately inject into the country's top three banks some 1.3 billion euros or 3.7 per cent of gross domestic product.
That is expected to bring Slovenia's deficit this year to 7.8 per cent of gross domestic product, well above the three per cent EU ceiling.
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Public money goes to the banks again.
Prime Minister Alenka Bratusek told the Czech daily Hospodarske noviny that: "We will carry out the capitalisation according to the central bank's estimate by the end of June."
She said the government would proceed quickly with the Slovenian central bank's estimate of 900 million euros ($A1.27 billion), although the European Commission has a different estimate.
Mountains of bad debt at Slovenian banks have prompted fears the country could soon follow Cyprus and Ireland, who ended up needing massive bailouts by the EU and IMF after rescuing their lenders.
The recapitalisation is needed as lenders unload bad loans and assets to a so-called bad bank, booking huge losses but opening the way to the recovery of the sector.
"Our goal is to transfer the first package of toxic loans to the bad bank by the end of June," said Bratusek.
The country's largest bank, loss-making state-owned Nova Ljubljanska Banka (NLB), approved on Tuesday taking up to 500 million euros in new capital, most of which is expected to come from the state.
On Monday, Slovenia's second bank, NKBM, backed taking up to 400 million euros to open the way to its privatisation.
The Slovenian government has said it plans to ultimately inject into the country's top three banks some 1.3 billion euros or 3.7 per cent of gross domestic product.
That is expected to bring Slovenia's deficit this year to 7.8 per cent of gross domestic product, well above the three per cent EU ceiling.
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Public money goes to the banks again.