Jan. 28 (Bloomberg) -- Slovenia’s parliament nominated Janez Jansa as the next prime minister to lead the euro-area nation that’s had its credit score cut by Fitch Ratings as the economy slides into recession.
Lawmakers chose Jansa in a televised vote of 51-39 after his party came second in an election last month. He has two weeks to nominate his team of ministers before parliament holds a confirmation vote. A government could be in place by Feb. 10., said Gregor Virant, the speaker of the parliament and a partner Slovenia’s five-way coalition.
“The priorities are clear as they would be for any government, to stabilize public finances, spur economic growth and create new jobs,” Jansa, 53, told lawmakers before the vote. ”We will focus on savings measures and fiscal discipline so that our credit rating improves and we can then borrow affordably since we need money to finance projects.”
Slovenia, which has been without an official government since September, had its long-term credit rating lowered by Fitch to A from AA- with a negative outlook yesterday because of a lack of financing flexibility in the face of the debt crisis. The country is sliding into recession because demand for its exports in Europe is slowing as nations trim spending to lower their debt burden.
Jansa, who led the former Yugoslav nation when it adopted the euro in January 2007, pledged to cut government spending by 800 million euros ($10.5 billion) this year.
Slovenia’s borrowing costs advanced past 7 percent in November as the sovereign debt crisis threatened Italy, its neighbor to the west and the third-biggest trading partner after Germany and Austria. The yield on notes maturing in January 2021 has dropped since then and stood at 6.487 percent yesterday, according to mid-pricing data compiled by Bloomberg.
Slovenians went to the polls on Dec. 4 after the Cabinet of Prime Minister Borut Pahor was toppled in September for failing to convince voters in the need to approve pension changes and its own inability to cut spending. The surprise winner of the snap vote was Zoran Jankovic, who was nominated by President Danilo Turk to form a government. He failed to win enough support from lawmakers.
Slovenia’s gross domestic product shrank an annual 0.5 percent in the third quarter last year. The economy is forecast to contract 1.1 percent this year, according to the European Bank for Reconstruction and Development. Slovenia’s government forecasting institute sees a 0.2 percent growth in 2012.
The nation’s public debt surged to over 45 percent last year from 23 percent in 2007, according the European Commission. Slovenia may have difficulties cutting its budget gap to below 3 percent by the end of next year as mandated by the euro region’s stability pact, central bank Governor Marko Kranjec said on Jan. 26. He says the current budget deficit is about 6 percent.
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