Bloomberg News

Slovenia to Get Cabinet as Pensioners Party Joins Coalition

January 24, 2012

(Updates with background starting in third paragraph.)

Jan. 24 (Bloomberg) -- Slovenia will probably get a new premier-designate after the Pensioners’ Party agreed to join a coalition headed by former Prime Minister Janez Jansa, ending weeks of political uncertainty in the euro-region nation.

“We’re joining the coalition,” the party’s president, Karl Erjavec, said today in an interview with TV Slovenija, citing the need to end address the country’s economic “crisis.” The party has 6 seats in the 90-member legislature, bringing Jansa’s support to 50 lawmakers.

Jansa, whose party came second in the snap vote last month, needs 46 votes to be confirmed as premier at a parliamentary session on Jan. 28. His Cabinet would probably be confirmed two weeks after that. Zoran Jankovic, a former mayor of Ljubljana whose party won the Dec. 4 vote, failed to be confirmed as premier-designate on Jan. 12.

Slovenia, which has been without an official government since the ouster of Borut Pahor’s administration in September, needs to trim public spending to comply with the new fiscal pact being pushed by European leaders such as German chancellor Angela Merkel. Jansa, who led the Cabinet from 2004 to 2008, has proposed spending cuts of 800 million euros ($1.04 billion) to allay investor concern over the country’s debt.

The export-driven economy is sliding into a recession as the debt crisis in Europe saps demand for its goods. Gross domestic product will shrink 1.1 percent this year, the European Bank for Reconstruction and Development said today in a report.

Slovenia’s borrowing costs rose to over 7 percent in November, while its credit rating was lowered by all the major ratings companies after the government fell. Standard & Poor’s cut the country’s assessment to A+ on Jan. 13 along with eight other euro-region nations. Moody’s lowered Slovenia’s credit grade on Dec. 23, citing the potential need for the government to support the banking industry.

Public debt surged to over 45 percent of GDP last year from 23 percent in 2007, according to the European Commission November report. The level is forecast to rise to just above 50 percent this year, the report said.

--Editors: Alan Crosby, Andrew Langley

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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