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Slovenian central bank chief warns of looming bailout

Slovenia's central bank chief, Bostjan Jazbec, has said he cannot rule out a bailout request from his struggling country as recession is deeper than expected. He urged speedier reforms in the eurozone nation.

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Slovenian central bank chief warns against looming bailout

Slovenia's new central bank chief, Bostjan Jazbec, confirmed he did not rule out his country becoming the sixth member of the eurozone to seek outside help, if its bond yields stayed close to the danger level of 7 percent.

He told Deutsche Welle the decision to seek a bailout from international creditors depended strongly on the financial markets' confidence in the Slovenian economy, adding that perhaps too little was being done by the government to convince investors the country could solve its problems in a transparent and credible way.

Jazbec made it clear that, while everything was still open, nobody in the country was really in favor of asking for outside help.

Political turmoil an added irritation

The central bank chief said the results of a banking stress test were yet to come as the quality of the data sent by lenders so far had left much to be desired, causing various delays.

He noted, though, that in the end it would be better to be able to fall back on reliable data rather than basing an analysis on interim figures.

Jazbec deplored that the current economic problems in the country coincided with a political crisis that in his view compounded the overall situation further. The government of Prime Minister Alenka Bratusek survived a confidence vote on Thursday, but Slovenians remain unhappy about more spending cuts and tax hikes deemed necessary to bring down public deficit levels.

hg/rc (dpa, AFP)

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