Crisis: Slovenian PM Jansa to Dublin to talk banking crisis
Slovenian gov't to give banks 1 bln euro bailout
(ANSAmed) - Ljubljana, September 11 - Slovenian Premier Janez Jansa travels to Ireland tomorrow to learn how the Irish government put their banks back on their feet following the 2008 crash, local media cited the premier's office as saying on Tuesday.
Slovenia will likely face a similar scenario in the coming months, and Jansa wants to be prepared. Yesterday in Luxembourg, Jansa told Eurogroup President Jean-Claude Juncker that while Slovenia's situation is "serious, Ljubljana has the potential to come out of the crisis" without asking for a bailout.
Slovenia will invest 1 billion euros to bail out the country's major state-owned banks, according to Economics Minister Janez Sustercic.
But the bailout might have to amount to much more, analysts said. Following a string of state company and consortium failures, Slovenia's three major lenders own 6-8 billion euros of bad loans between them, and this could amount to a bailout equal to 17% of GDP. At that point, asking for an EU bailout would be inevitable.
The government has aired the possibility of a so-called bad bank, which keep the nation's credit system solvent by taking on all its bad loans. After a series of ratings agencies downgrades and with its 10-year bond at 6.5%, Slovenia's immediate problem is how to cover expenses and debt financing.
Slovenia will likely face a similar scenario in the coming months, and Jansa wants to be prepared. Yesterday in Luxembourg, Jansa told Eurogroup President Jean-Claude Juncker that while Slovenia's situation is "serious, Ljubljana has the potential to come out of the crisis" without asking for a bailout.
Slovenia will invest 1 billion euros to bail out the country's major state-owned banks, according to Economics Minister Janez Sustercic.
But the bailout might have to amount to much more, analysts said. Following a string of state company and consortium failures, Slovenia's three major lenders own 6-8 billion euros of bad loans between them, and this could amount to a bailout equal to 17% of GDP. At that point, asking for an EU bailout would be inevitable.
The government has aired the possibility of a so-called bad bank, which keep the nation's credit system solvent by taking on all its bad loans. After a series of ratings agencies downgrades and with its 10-year bond at 6.5%, Slovenia's immediate problem is how to cover expenses and debt financing.
Posts
