Slovenia Bond Sale at Risk as Jansa Takes Over Finance Ministry

Slovenia’s Prime Minister Janez Jansa rejected a Finance Ministry bond-sale plan overruling Janez Sustersic, who stepped down as Finance Minister with Jansa taking over his duties.

“A bond sale must be decided by the Cabinet, not just the Finance Ministry as stated by Mr. Sustersic,” Jansa told reporters in Ljubljana today as he took over his office at the Finance Ministry. “The ministry proposed borrowing for this year of as much as 4.5 billion euros ($6.15 billion), which we rejected and the matter will be reconsidered.”

Jansa, who’s leading a minority government after a partner abandoned the coalition due to corruption allegations against him, has vowed to push on with the overhaul of the economy and the bank recapitalization plan. His efforts may be thwarted by eventual early elections. Coalition partners have called upon Jansa to step down after the anti-graft commission found he failed to properly declare his private assets.

Slovenia risks an early election which could undermine efforts to create a “bad bank” that is intended to clean up lenders’ balance sheets and force the euro-region nation to become the sixth country in the 17-member bloc to seek financial assistance.

The yield on the benchmark dollar-denominated debt maturing in 2022 rose 6 basis points to the highest level this year, reaching 5.16 percent at 2:16 p.m. from 5.103 percent yesterday, according to data compiled by Bloomberg.

Sustersic said Jan. 25, when he officially tendered his resignation, that the ministry doesn’t need prior government approval for a possible debt sale. He said a planned bond auction was scrapped as the political turmoil erupted.

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