Ljubljana Mayor Zoran Jankovic, who won Slovenia’s snap election on Dec. 4, was asked to form a Cabinet as the euro-region nation struggles with mounting debt and a threat of a credit-rating cut.
Jankovic’s Positive Slovenia party won 28 seats in the 90- member assembly and the former chief of store chain Mercator Poslovni Sistem (MELR) d.d. was named as premier-designate, President Danilo Turk told reporters in Ljubljana today. Jankovic is seeking support from smaller parties to form a majority coalition.
“I hope this nomination will speed up talks to form the new Cabinet,” Turk said.
Slovenia, the first former communist nation to adopt the euro almost five years ago, had its credit rating lowered one level by Moody’s Investors Service to A1 from Aa3 on Dec. 22 on the risk that the state of government finances may deteriorate from a possible need to support its banks. Standard & Poor’s and Fitch Ratings said last month they may cut the scores of 15 euro-region members after assessing the outcome a European Union summit on a tighter fiscal pact.
The next government will need to tackle rising debt and the threat of a recession for the export-driven economy as efforts to solve the sovereign debt crisis in Europe fail to win investor confidence. The government is a majority owner of Nova Ljubljanska Banka d.d. and Nova Kreditna Banka Maribor d.d. (KBMR), the country’s two biggest lenders.
Slovenians went to the polls after the government of Prime Minister Borut Pahor was ousted in September for failing to convince voters on the need to adopt pension changes and its inability to cut spending. Lawmakers on Dec. 23 adopted 150 million euros ($196 million) of savings measures by freezing public employee’s wages, pensions and benefit payments to allay investors’ concern over its debt.
Slovenia’s public debt is forecast to surge to over 50 percent of total output in 2012 from 23 percent in 2007, according to the European Commission.
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