Slovenian Premier Ready to Quit If Snap Vote Held SoonBoris Cerni
Slovenian Prime Minister Alenka Bratusek, who was ousted as chairman of the Positive Slovenia party, said she will resign if early elections are held soon.
Bratusek said she will meet with three other coalition partners to see whether a snap vote can be held before “summer” and “to complete the process that would least hurt” Slovenia, STA newswire reported today, citing Bratusek after her meeting with President Borut Pahor in the capital Ljubljana. Pahor is also in favor of early elections, according to an e-mailed statement from his office.
Bratusek, who became premier in March 2013, helped Slovenia avoid an international bailout by recapitalizing the bank industry with 3.2 billion euros ($4.4 billion), moving toxic loans to a state agency, starting state-asset sales and pledging to stem the widening budget deficit.
“Efforts to forge a new ruling coalition are likely to be dashed and early elections appear as the most probable outcome,” Timothy Ash, an emerging-markets economist at Standard Bank Plc in London, said in a report before Bratusek’s decision today. “The ruling parties may, however, prefer to delay these until the autumn, with Bratusek staying on in an acting capacity in the intervening period. The latter scenario should provide a bridgehead for the market.”
The yield on Slovenia’s euro-denominated bonds maturing in 2024 fell for the first time after rising for four consecutive sessions. The yield plunged 15 basis points, or 0.15 percent, to 3.73 percent at 2:42 p.m. in Ljubljana after surging 20 basis points yesterday and reaching a seven-week high in mid-day trading, according to data compiled by Bloomberg.
Bratusek yesterday met with lawmakers from Positive Slovenia to gauge whether she still has their support, Delo newspaper reported today. The party has 27 lawmakers and the coalition controls 49 seats in the 90-member assembly.
“While a collapse of the government coalition, early elections and stalling on reforms and privatization look likely, we find it difficult to see it resulting in anything more than a negative credit repricing,” Peter Attard Montalto, an economist at Nomura International Plc in London said in a report yesterday.
Slovenia’s BBB+ credit rating at Fitch Ratings, the third-lowest level in the investment category, is set for review on May 2. A downgrade is unlikely, an economist Apolline Menut at Barclays Plc investment unit, said yesterday.
Fitch has a negative outlook on the country’s sovereign debt. Standard & Poor’s rates Slovenia at A- while Moody’s Investors Service has Ba1 score, the highest grade on junk, or non-investment category. They both have a stable outlook on Slovenia.