Ovi -
we cover every issue
Resource for Foreigners in Finland  
Ovi Bookshop - Free Ebook
Join Ovi in Facebook
Ovi Language
Books by Avgi Meleti
Stop violence against women
Murray Hunter: Opportunity, Strategy and Entrepreneurship
International Red Cross and Red Crescent Movement
BBC News :   - 
iBite :   - 
Slovenian report
by Euro Reporter
2012-07-25 09:30:02
Print - Comment - Send to a Friend - More from this Author
DeliciousRedditFacebookDigg! StumbleUpon
Slovenia postpones vote on fiscal limit, bank aid fund

Slovenia postponed a vote on approving the limit on fiscal spending and on the creation of a sovereign fund that is meant to take bad loans from banks. Lawmakers, who were to vote on the measures today, will decide at the end of August on putting the spending limit into the constitution and on creating the fund that will assume non- performing credits from lenders, including Nova Ljubljanska Banka d.d., Prime Minister Janez Jansa said in an e-mailed statement late yesterday.

“This is the last delay that Slovenia can afford in solving these key problems,” Jansa said. “If these measures are adopted, the damage will be repaired and the delay will pay off. If not, the price will be double of what it would have been today.”

Slovenia is seeking to allay investors’ concern over its debt, which has more than doubled since the former Yugoslav nation adopted the euro in 2007. Banks, which rely on funding from the European Central Bank for liquidity, will probably need to be propped up by an international assistance program by year’s end, economists from London to Warsaw have said. The Slovenian Sovereign Holding will be created by merging agencies that are managing state assets valued at more than 10 billion Euros ($12.3 billion). Bad loans, which surged to about 6 billion Euros, would be transferred to the fund to clean up banks’ balance sheets so that they would be able to finance the economy, which is teetering on the brink of its second recession in three years.


Weak Slovenian banks highlight euro-zone risks

Slovenia could well be the sixth euro-zone country to receive a bailout to shore up its troubled banks. Slovenian and EU officials rule out the likelihood, but economists question their promises — similar assurances were made before Ireland and Portugal were thrown a lifeline. “It cannot be excluded that they will need international assistance,” said Hermine Vidovic, of the Vienna Institute for International Economic Studies. The Central European country’s 10-year-bond yields have recently spiked to the critical seven-percent level that forced other members of the currency bloc to seek help, so in the next few months Slovenia could be the next in line after Ireland, Spain, Portugal Greece and Cyprus. The precarious state of Slovenia’s banking system and its potential effect on the euro zone is the latest reminder that the bloc is running out of time to fix its broken banks. But one key step — a full-fledged area-wide banking union — appears to be a long way off as political wrangling among euro capitals about the components of such a union gets in the way of progress.

Leaders’ inaction threatens to accelerate the ongoing capital flight from debt-stricken southern Europe, renewing doubts about the future of the euro. Some observers even fear that this trend could ultimately lead to cash flight from the European Central Bank (ECB), marking a point of no return for the monetary union. “It is an emergency situation because the financial flows are going faster than the political decisions,” said Diego Valiante, of the Centre for European Policy Studies in Brussels, explaining that without a banking union it will be too expensive to save national banks.

“The euro-zone debt crisis is not an economic crisis any more — it’s a political crisis,” Valiante said, adding that the next few months will be crucial, showing once and for all if euro officials are prepared to go beyond rhetoric in order to end the deepening turmoil. Southern Europe has been bleeding cash for several years, but the past 12 months have been particularly painful. Economists see this as a sign of financial disintegration in the euro area. If Europe doesn’t move more boldly toward a banking union and more fiscal integration in general, many fear this phenomenon will be exacerbated. And another scary scenario could eventually take place, Valiante warned. “If banks start really to believe that the euro zone will break up, banks will start withdrawing their money from the ECB,” Valiante said. That scenario would effectively spell the end of the euro zone.


Slovenia approves $541 million thermal plant guarantee

Slovenian lawmakers conditionally approved state guarantees of 440 million Euros ($541 million) for the upgrade of thermal power plant Termoelektrarna Sostanj d.o.o., Delo newspaper reported, citing lawmakers in the capital Ljubljana.

The government also gave its backing to the 1.3 billion- euro project on condition the price doesn’t exceed the current estimate, Dejan Krusec, the junior minister at the Finance Ministry said, according to the Slovenian newspaper.

The project, in which France’s Alstom SA (ALO) is providing the equipment, is Slovenia’s biggest energy investment with loans provided by the European Investment Bank and the European Bank for Reconstruction and Development. The completion of the 600 megawatt coal-powered unit is seen in 2016.

Print - Comment - Send to a Friend - More from this Author

Get it off your chest
 (comments policy)

© Copyright CHAMELEON PROJECT Tmi 2005-2008  -  Sitemap  -  Add to favourites  -  Link to Ovi
Privacy Policy  -  Contact  -  RSS Feeds  -  Search  -  Submissions  -  Subscribe  -  About Ovi