UPDATE 1-Centre-left political novice proposed as Slovenian prime minister

Tue Aug 19, 2014 8:20am EDT

* Miro Cerar nominated by president as new PM

* Legal expert won convincingly in July election

* Uncertainty over privatisation process, crisis measures (Updates with quotes, details, background)

By Marja Novak

LJUBLJANA, Aug 19 (Reuters) - Slovenian President Borut Pahor nominated law professor Miro Cerar as prime minister on Tuesday after his centre-left SMC party ran away with a July election just weeks after he entered politics.

Parliament has seven days to confirm the appointment of the 50-year-old political novice, who has expressed reluctance to sell some of the bigger state assets slated for privatisation under a drive to steady Slovenia's finances after the euro zone member narrowly avoided an international bailout for its banks late last year.

"I am aware of the great ... challenge to ensure that we exit the crisis, to overhaul the country in a way that enables a life of quality and sustainable development," Cerar told reporters after his nomination.

Parliament is expected to confirm his appointment on Monday, after which Cerar, a professor at the Ljubljana Law Faculty and a legal advisor to parliament, will have 15 days to present his cabinet, which will also be put to lawmakers for approval.

Cerar is expected to wrap up coalition talks with the Desus pensioners' party, the centre-left Social Democrats (SD) and the Alliance of Alenka Bratusek (ZAB) later this week or next.

"For now we can say that Desus and the Social Democrats will surely be in the coalition, while it remains unclear whether the Alliance of Alenka Bratusek will join," said Tanja Staric, a political analyst of Radio Slovenia.

Bratusek was prime minister when the crisis came to a head in December last year, when the government injected 3.3 billion euros of its own money into banks drowning in bad loans.

Staric said privatisation would pose the biggest challenge to the new government, given resistance from the SD and Desus despite a pressing need to consolidate public finances.

Cerar has said he opposes the privatisation of strategic firms such as telecoms operator Telekom Slovenia, airport Aerodrom Ljubljana, port Luka Koper and the railway, though he has backed the sale of smaller state enterprises.

Some analysts, however, believe the Telekom and Aerodrom sales will go ahead later this year, given the process had already been launched by the previous government.

"I believe that the firms that have already been set for privatisation will be sold while it will be very difficult for the government parties to agree on which other companies to privatise in the future," Staric said.

Slovenia has agreed with the European Commission to reduce its budget deficit to 3 percent of GDP in 2015, down from some 4.2 percent this year.

The deficit soared to 14.7 percent in 2013 on the bank recapitalisation, prompted by an increase in bad loans after the global crisis ravaged Slovenia's export sector and exposed widespread cronyism and corruption in an economy of which some 50 percent is still controlled by the state.

Successive governments since Slovenia declared independence from socialist Yugoslavia in 1991 have avoided selling state assets, including banks. (Editing by Matt Robinson and Robin Pomeroy)

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