Slovenians insist they won't be the next Cyprus
Published 02/04/2013 | 05:00
Slovenia "will not need a bail-out this year" as there is still time to raise money in the markets, the embattled country's finance minister has claimed.
Uros Cufer declared he was "calm" despite borrowing costs for the government rocketing to a record high in the wake of the tumultuous Cypriot bail-out. The spreads could come under further pressure today as markets open after the Easter holiday.
"Slovenia cannot be compared to Cyprus, it is certainly not a tax haven ... the basic problem of the banks in Slovenia is too much debt in companies and a lack of capital," he said.
Slovenia, which joined the euro five years ago, is in the depths of its second recession in four years and is not forecast to return to growth until 2014.
The country had pegged its hopes on the new centre-left government, which took office on March 20, to chart a path to recovery. Instead the new administration came to power amid eurozone turmoil following the overwhelming rejection in Cyprus of the initial EU bailout offer. Now it faces contagion as investors fear Slovenia will meet the same fate as the Mediterranean island, which was forced to settle for a deal that left depositors in its two largest banks with deep losses.
Mr Uros, however, maintained his country did not need help, saying that while Slovenia's banks were also in trouble, the sector was smaller than in Cyprus and it did not share the exposure to toxic Greek debt.
The IMF said Slovenia would need to raise at least €3bn this year. But Mr Cufer said Slovenia was not in a hurry. "We do not have to go to the markets in these overheated times due to Cyprus," he said. "We can wait for the markets to calm down."
Meanwhile, in Cyprus, three judges will be granted sweeping powers to investigate allegations that top politicians and their family members used advance knowledge of the country's bailout to protect assets.
President Nicos Anastasiades pledged that even remote family members would be subject to scrutiny by the commission. (© Daily Telegraph, London)