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Slovenia on track to avoid bailout, says Eurogroup’s Juncker

Published on 10/09/2012

The head of the Eurogroup, Jean-Claude Juncker, said on Monday that he expects Slovenia to deliver on promised reforms and therefore avoid a bailout request.

“The situation in Slovenia is serious and Slovenia has no time to lose,” the Luxembourg prime minister said after talks with Slovenian counterpart Janez Jansa.

“My working assumption is that the reforms that have been annnounced by the government will be implemented in a forseeable timeframe,” Juncker said, referring to pension and labour-market reforms.

Therefore, he added: “My working assumption is not that Slovenia will ask for a bailout.

“My working assumption is that Slovenia will deliver” on the reforms.

Jansa said simply that Slovenia has every “potential” to get out of its present difficulties.

The former Yugoslav republic of Slovenia, which entered the eurozone in 2007, has been poised on the edge of financial disaster since its banking sector in particular was hard hit amid the debt crisis.

After the main international ratings agencies cut Slovenia’s credit rating, Jansa last month warned the country may need a bailout unless the opposition backed his reform drive.

On Sunday, Finance Minister Janez Sustersic said there was a shortfall in Slovenia’s public finances for this year worth half a billion euros ($640 billion.)