Slovenia Risks Election as Calls Rise for Jansa to Resign

Slovenian Prime Minister Janez Jansa’s party dismissed calls from coalition partners for him to resign over corruption allegations and refused to take part in any “technical government.”

Jansa allegedly failed to declare “more than 200,000 euros” ($265,260) worth of private assets, according to Jan. 8 statement by Goran Klemencic, the head of Slovenia’s anti- corruption authority. As a result, two coalition partners called on Jansa to quit.

The board of Jansa’s Slovenian Democratic Party “unanimously rejected the offer” to form a “technical government,” the party said on its website after a leadership meeting. Out of 285 party board members, 281 backed Jansa as their leader. Jansa gave coalition partners a Jan. 14 deadline to decide whether they want to stay in his government, News portal www.24ur.com reported.

Slovenia, the first post-communist nation to adopt the euro six years ago, is grappling with its second recession in three years as Jansa’s Cabinet, less than a year in office, works on an economic overhaul and savings measures to avoid becoming the sixth euro-region nation to seek an international bailout.

European Union President Herman Van Rompuy phoned Jansa on Jan. 10 and “emphasized the importance of political stability” at a time of taking strategic decisions, according to the premier’s party.

Facing Risks

The country risks a credit rating downgrade, an increase in risk premium on Slovenian bonds and an increase in the cost of capital in case of snap elections, which would also halt efforts to lead the economy out of the crisis, the party cited Jansa as saying after the board meeting.

Yields on Slovenia’s Eurobond maturing in 2022 stood at 4.652 percent at 7:28 a.m. in Ljubljana, rising from 4.643 percent on Jan. 10, according to data compiled by Bloomberg.

Standard & Poor’s put Slovenia’s credit rating on watch negative on Nov. 6 because of opposition efforts to call a referendum on the government’s plan to overhaul the economy. The referendum was later scrapped by the country’s Constitutional Court.

Slovenia has seen weeks of occasionally violent protests against alleged corruption and austerity. Gross domestic product shrank 3.3 percent in the third quarter from a year earlier, the third-biggest drop in the euro region after Greece and Portugal, as consumption slumped and exports to Europe eased. GDP is forecast to recover in 2014, according to the European Commission’s November report.

To contact the reporter on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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