Slovenian Finance Chief Departure Is Blow to NLB Bank Saleby and
Mramor’s resignation may signal snap vote, economist says
Political wrangling may affect asset sales, analyst says
Slovenian Finance Minister Dusan Mramor unexpectedly stepped down, citing “personal reasons,” in a potential blow to the Adriatic euro-zone country’s efforts to sell its biggest bank Nova Ljubljanska Banka d.d.
Prime Minister Miro Cerar announced the resignation in the capital Ljubljana Wednesday. Cerar rejected an offer by Mramor to quit in January over bonuses the minister received while working as an economics professor. Most recently, Mramor sided with European Central Bank President Mario Draghi this week over a government investigation into the central bank’s role in Slovenia’s 2013 bank rescue, which Governor Bostjan Jazbec said was an attack on the monetary authority’s independence.
“My biggest achievement is the consolidation of public finances and the ensuing improvement of Slovenia’s position,” Mramor, who will return to his university job, told reporters on Wednesday. As the main architect of policies that have narrowed the budget deficit and led to the end of the European Union’s monitoring of Slovenia’s budget in May, he also took credit for a credit-rating upgrade “and lower interest rates on our government bonds and for the entire economy.”
Mramor’s resignation may impede the planned sale of Nova Ljubljanska Banka, which suffered a blow earlier this month with the resignation of Marko Jazbec, the chief of the agency that is overseeing the sale of Slovenia’s state-owned assets. The country’s efforts to put public companies into private hands have been frustrated by wrangling among the country’s leadership for more than a decade.
Cerar’s administration took power in September 2014 and pledged to extend the asset sale agreed under the previous government of Alenka Bratusek, who along with the central bank Governor Bostjan Jazbec orchestrated the rescue of state-owned banks, including NLB.
NLB bank must be sold by the end of next year as part of a commitment to the EU to dispose of lenders that received state aid. The initial public offering that was first planned for the autumn 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.
The resignation “points to the heart of the country’s problems, which are the close ties between the economy and politics, especially in light of the planned IPO for NLB bank,” Gunter Deuber, an analyst at Raiffeisen Bank International AG, said by phone from Vienna. He sees limited impact on the Slovenian bonds, which are being purchased by the ECB with its quantitative easing policy.
The yield on the nation’s benchmark notes maturing in March 2026 declined 1 basis point, or 0.01 percent, to 0.97 percent in Ljubljana, compared with its lowest level 0.953 percent on March 13, 2015, according to data compiled by Bloomberg. Slovenia’s budget gap ballooned to almost 15 percent of its output after the 2013 bank rescue and the government reduced it to below 3 percent of GDP last year, ending the EU’s monitoring of its budget.
Mramor will be temporarily replaced by Minister Without Portfolio Alenka Smerkolj, who’s in charge of a government office for development and EU affairs, until a new minister is named.
“Many issues have accumulated including the management of state assets, the resignation of Marko Jazbec over the brewing in Luka Koper and eventually the problem of the NLB privatization and the question of higher pensions,” Andraz Grahek, partner at Capital Genetics in Ljubljana said by phone. “It all looks like positioning ahead of new elections, which are due in two years.”
Cerar is leading a three-way coalition that, besides his party, includes uneasy partners, the Social Democrat and Desus, the pensioner’s party led by Foreign Minister Karl Erjavec.