Slovenia to turn centre right for economic lift

Reuters News
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Posted: Dec 03, 2011 6:23 PM

By Marja Novak

LJUBLJANA (Reuters) - Slovenia votes for a new government Sunday with the center-right opposition set to return to power on a pledge of painful reforms to halt the European Union member's slide back into recession.

Once a model of successful post-communist transition, euro zone member Slovenia is facing renewed economic contraction, rising unemployment and a potential credit rating downgrade.

The opposition Slovenian Democratic Party (SDS) led by former prime minister Janez Jansa is eying a return to office, promising to cut the budget deficit, create jobs and hike the retirement age.

The outgoing government led by center-left Prime Minister Borut Pahor's Social Democrats lost its majority in May amid internal policy squabbles and was ousted by parliament in September.

Polls suggest Jansa, who was prime minister of the former Yugoslav republic from 2004 to 2008, will return to the post but

will need the support of smaller parties to secure a majority.

"If ever Slovenia needed a government with a strong majority ... it is in the period coming up," Jansa said on Pop TV.

RECESSION

An Alpine state of 2 million people, Slovenia was the fastest growing euro zone member four years ago, but its export-driven economy was badly hit by the global crisis and contracted by 8 percent in 2009.

After a modest recovery, data released this week suggests another recession is on the way after the economy shrank 0.5 percent in the third quarter of 2011. [ID:nL5E7MU2PX]

Jansa's SDS has pledged to cut Slovenia's deficit by trimming public administration and accelerating privatization. He proposes to ease a credit crunch by establishing a "bad bank" that would take over state-owned banks' non-performing loans.

The party would raise the retirement age, currently among the lowest in the EU at 57 for women and 58 for men.

Center-left Ljubljana mayor Zoran Jankovic is seen as Jansa's closest challenger for the premiership.

Polls open at 7 a.m. (01:00 a.m. EST) and close at 7 p.m. (1:00 p.m. EST). Preliminary results are expected by 4:00 p.m. EST.

(Editing by Matt Robinson and David Cowell)