Slovene ruling party postpones congress to avert political crisis

Reuters News
Posted: Oct 03, 2013 6:59 AM
Slovene ruling party postpones congress to avert political crisis

By Marja Novak

LJUBLJANA (Reuters) - The party of Slovenian Prime Minister Alenka Bratusek said on Thursday it would postpone its congress to prevent a political crisis in a country struggling to avoid a financial bailout.

The postponement of the center-left Positive Slovenia's congress, due to take place on October 19, followed an announcement by Ljubljana mayor Zoran Jankovic, who founded the party in 2011, that he planned to challenge Bratusek for the party leadership.

Earlier on Thursday Bratusek threatened to quit if she lost a leadership vote, saying the country had no time for "games" as it seeks to avert an international bailout.

"The executive board of the party supports Alenka Bratusek as the prime minister and the president of the party. We are putting the interest of the state ahead of the interest of the party," deputy party president Masa Kociper told reporters.

"We believe that the government is doing a good job," she added.

The party will not hold its congress until just before the next parliamentary election, which, as things stand, is due in late 2015.

Analysts welcomed the postponement of the congress, saying that the risk of political turmoil would have worsened Slovenia's financial worries, focused on banks, mostly state-owned, that are being choked by some 7.9 billion euros ($10.76 billion) of bad loans, equivalent of around 22.5 percent of GDP.

"Disaster averted, sigh of relief for Slovenian credit," said Abbas Ameli-Renani, an emerging market analyst at the Royal Bank of Scotland. "For now, the credit focus goes back onto banks and stress tests."

The government is waiting for results of an international audit ordered by the European Commission and due in November before it can recapitalize the banks.

Bratusek's resignation would almost certainly trigger a snap election, delaying a raft of crisis measures to shore up Slovenia's finances and increasing the likelihood it will become the latest member of the 17-nation euro zone to seek EU/IMF aid.

Bratusek's coalition allies have said they would quit the governing alliance if Jankovic, who has been tainted by accusations of corruption, returns as party leader. The government already faces a confidence vote, expected in November, over the 2014 budget.

Analysts said that although the political crisis was over it remained unclear whether Slovenia would be able to solve its problems without international aid.

"There is still a chance that Slovenia makes it without help but that mostly depends upon the size of financial needs of the banks which will be revealed after stress test results are out," said Borut Hocevar, an analyst at daily Finance.

(Reporting by Marja Novak; Editing by Robin Pomeroy)