Bank of Slovenia Probe Breached ECB Document Confidentiality

Slovenia’s central bank castigated the country’s prosecutor for breaching the confidentiality of European Central Bank documents in a raid tied to an investigation of the monetary authority’s role in a 2013 bank rescue.

Banka Slovenije called on Prosecutor General Zvonko Fiser to conclude his probe into the 3.2 billion euro ($3.5 billion) taxpayer-funded bank recapitalization of state-owned banks, which swelled the euro-zone member’s fiscal deficit to 15 percent of gross domestic product last year. Both the central bank and Finance Minister Dusan Mramor, who unexpectedly resigned on Wednesday, have sided with ECB President Mario Draghi in portraying the probe as an attack on the central bank’s independence.

The seizure of data and computers of central bank employees was carried out “in a way that breached the confidentiality of ECB documents,” the central bank said in a statement on Wednesday. It urged Fiser to conclude the probe quickly to “eliminate doubt about the work of Banka Slovenije” and allow workers whose computers were confiscated to get back to work.

The bailout has stoked a dispute between the central bank and the ECB on one side and Slovenia’s judiciary on the other over whether the rescue was necessary and why no one has been brought to justice for the huge losses in the lenders that triggered the crisis. Lawmakers also grilled central bank Governor Bostjan Jazbec in parliament last week over the regulator’s asset-quality review and stress tests that preceded the bailout.

Growing Dispute

The July 7 raid by investigators prompted Draghi to threaten legal action against the Slovenian prosecutors and the police to safeguard the independence of the Slovenian central bank. Fiser said the investigation was conducted in line with the law.

Among the banks bailed out by the government is the largest lender in the country of 2.1 million people, Nova Ljubljanska Banka d.d., as well as other state-owned lenders. Because they received state aid in 2011, the European Union has demanded that the government sell them by the end of next year.

Political wrangling has led to repeated delays in the sale of NLB. An initial public offering of NLB shares will probably start by year-end, Blaz Brodnjak, the bank’s chief executive officer, said in an interview with Slovenian Delo newspaper over the weekend.

Obstacles have arisen around other sale efforts as well. The head of the state privatization agency, Marko Jazbec, resigned this month after a dispute over port operator Luka Koper d.d., warning against “politics and private interests” in the process. Last year, the state privatization agency failed to offload the biggest asset on the block, Telekom Slovenije d.d., after attracting a single bidder.

Slovenia has been one of the slowest eastern members of the European Union to put state-owned assets into private hands. While Prime Minister Miro Cerar’s government sold lender Nova Kreditna Banka Maribor last year, progress has been slow on other sales, and the International Monetary Fund has urged the country to further reduce the government’s role in the economy.