Slovenia Rookie Backing Sell-Off Caution Set to Win Vote

Slovenians began voting in a snap election for the fourth government since 2008 that will probably show a shift in the electorate’s trust to a newcomer from the established political elite.

The six-week-old party of law professor Miro Cerar is set to take 34.5 percent, while the Slovenian Democratic Party of former Premier Janez Jansa should come in second place with 25.5 percent, according to a July 9 Episcenter survey published by Planet TV, a private broadcaster. The new party of outgoing Prime Minister Alenka Bratusek may get 4 percent, just enough to enter parliament. The poll of 1,042 people had no margin of error.

The elections were triggered by Bratusek’s resignation in May after her privatization plans helped ignite a leadership scrap within her party. The reluctance of political rivals to sell state assets more than two decades after communism ended may spark an investment retreat in the ex-Yugoslav republic.

Rejection of her plan “raises once again question marks about the domestic authorities’ willingness to import long-term foreign capital expertise,” Carlos Ortiz, an economist at UniCredit AG in London, said in a July 10 note. “Moreover, it risks seeing a significant delay in the sale of assets beyond target.”

Austerity Plan

The polls opened at 7 a.m. and close at 7 p.m. in Ljubljana with exit-poll results scheduled to be published soon after by public broadcaster TV Slovenia and Pop TV. Official results from the election commission are expected later in the evening. Voter turnout was almost 36 percent at 4 p.m., according to the election commission’s website.

Before stepping down, Bratusek steered Slovenia away from becoming the euro area’s sixth international bailout recipient by pushing through a 3.2 billion-euro ($4.4 billion) banking rescue. The austerity program was designed to help the nation steady its finances after rescuing its banks to avoid following Greece and Cyprus into a bailout.

“Cerar is the only one who wasn’t involved in all the dirty business of the past two decades, so he’s best placed to lead the country,” said Denis Papic, 40, who’s involved in organizing concerts for the music business, after he cast his vote in central Ljubljana.

“We need a clean slate,” said Jordan Zupancic, 73, a pensioner who declined to disclose his voting preference.

Coalition Building

Should he win, Cerar would probably unite with two smaller parties that would rather raise taxes than trim public spending, according to New York-based Eurasia Group.

“A center-left coalition government is the most likely scenario,” Eurasia analyst Tsveta Petrova said in a July 8 note. “The fiscal trajectory and reform outlook, especially privatizations and public-sector cuts, will suffer as a result.”

Cerar, whose mother was a district attorney and father a famous gymnast, stands in contrast to Jansa, who’s serving a two-year prison term for corruption. Hundreds of his supporters have gathered in front of the Supreme Court in Ljubljana every day for the past two weeks to urge his release after the Constitutional Court rejected a June 18 appeal.

Untainted Party

Cerar’s party “isn’t ideologically burdened and not tainted by corruption,” Zijad Becirovic, director of the International Institute for Middle East and Balkan Studies, a research institute based in the capital, Ljubljana, said yesterday by phone. “He’s a positive figure who may become a tough yet honest politician.”

Bratusek leaves unfinished an economic overhaul that includes selling some of the country’s largest companies and narrowing the budget gap to less than 3 percent of gross domestic product by end-2015 from almost 15 percent last year. Failure to do so would curb inflows of EU funds and stoking a debt ratio the EU says may exceed 80 percent of GDP by year-end.

Bratusek last year pledged in a plan that was sent to the European Commission to sell 15 companies, including phone company Telekom Slovenije d.d. and lender Nova Kreditna Banka Maribor d.d.

The move put her at odds with members of her Positive Slovenia party, which ousted her in favor of Ljubljana Mayor Zoran Jankovic.

On July 3, Bratusek proposed halting the asset-sale plan until the new government is in place.

The Organization for Economic Development and Cooperation has criticized Slovenia for controlling too big a chunk of its economy, while the International Monetary Fund backed Bratusek’s plan to sell off the state-run companies.

“Restructuring and the privatization of parts of the banking sector is an essential element of this overall reform process,” Olli Rehn, the EU’s economic and monetary affairs commissioner, said June 20 in Luxembourg.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

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

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