ECB's Kranjec no need for Slovenian bank aid for now

LJUBLJANA, June 19 Tue Jun 19, 2012 9:20am EDT

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LJUBLJANA, June 19 (Reuters) - European Central Bank Governing Council member Marko Kranjec did not rule out that Slovenia may have to ask for international aid to prop up its banking sector, but there was no need to do so at the moment, he said on Tuesday.

Asked whether Slovenia will have to ask for international help because of the problems of its banking sector, Kranjec said: "We do not exclude anything ... but for now this is an entirely hypothetical question."

"Conditions (in the Slovenian banking sector) are going in the bad direction, but for now I do not see a reason that Slovenia would need to ask for (international) help," said Kranjec, who is also governor of the Bank of Slovenia.

Earlier this month, Spain secured up to 100 billion euros in bailout money to recapitalise its ailing banks, which raised concern in the markets that such a step would push Europe's fourth largest economy further into debt, potentially closer towards requesting a full bailout programme.

Kranjec also stressed the need for fiscal consolidation in Slovenia to bring the country's borrowing costs down.

"Yields on our (Slovenian) debt are very high but poor availability of (financial) resources is even more worrying," said Kranjec, referring to severe cuts in availability of international financial resources since the middle of 2011. (Reporting By Marja Novak, writing by Eva Kuehnen)

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