Slovenia is strong enough to contain its banks’ bad debts and avoid a bailout, Finland’s Europe Minister Alexander Stubb said.
“With the euro crisis, we have a whole bunch of sharks circling around and the sharks pick on one country or another,” Stubb told reporters in Helsinki today. “It looks like the sharks are trying to pick on Slovenia. I’m hopeful, and fairly confident, it will certainly not be the next Cyprus.”
Slovenia’s government is working to restore investor faith in its banks through budget consolidation as the economy struggles with its second recession since 2009. A rash of corporate bankruptcies has saddled Slovenian lenders with a pile of bad debts, threatening to turn the nation into the sixth euro member to ask for an international rescue after Cyprus agreed to the terms of its 10 billion-euro ($12.8 billion) bailout.
The yield on Slovenia’s dollar-denominated bond maturing in 2022 exceeded 6 percent last week, and traded at about 5.9 percent today, according to data compiled by Bloomberg. The country’s euro bond due in 2020 yielded 6.17 percent today, down from more than 7.05 percent last week.
Stubb declined to comment on options available to the country.
“The euro crisis and the financial crisis have been an earthquake and we’re seeing some aftershocks right now,” Stubb said. “I still feel that the worst is over.”
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at email@example.com
To contact the editor responsible for this story: Tasneem Brogger at firstname.lastname@example.org