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By Marja Novak
BRDO PRI KRANJU, Slovenia, April 26 Slovenian
Prime Minister Alenka Bratusek lost the leadership of her
centre-left Positive Slovenia (PS) party to a challenger
unwanted by her coalition partners on Saturday, a move that is
likely to bring down her government and trigger an early
A party congress chose Ljubljana mayor Zoran Jankovic as the
new PS leader, the party said. All three coalition partners have
said they would not cooperate with a party led by Jankovic, who
is under investigation for corruption and has denied all
Bratusek, whose government managed to save Slovenian from an
international bailout last year, told congress before the vote
that she cannot remain the prime minister without the party
"I can no longer be the prime minister if I do not have
support within my own party," she said.
Slovenia was the fastest growing euro zone member in 2007
but was badly hit a year later by the global financial crisis.
It dodged the need for an international bailout last December by
pumping some 3.3 billion euros ($4.6 billion) into its troubled
banks, and expects the economy to grow by 0.5 percent this year
after two consecutive years of recession.
With its borrowing needs covered for 2014, the former
Yugoslav republic looks unlikely to have to resort to outside
help even if the government collapses. But its fall could delay
planned cuts and privatisations aimed at reviving the economy.
Jankovic asked Bratusek after the vote not to resort to any
hasty decisions, saying he hoped she would stay the prime
"I think she does her work well," Jankovic told the party.
But according to the national news agency STA a junior
coalition party, the Civic List, called for talks on the date of
the early election immediately after the vote and analysts
believe the government will not be able to survive the PS
"I expect the coalition will break up and since it is very
unlikely that a new coalition could be formed within the
existing parliament we can expect early election later this
year," said Borut Hocevar, an analyst of daily Finance.
Jankovic founded the PS two months before a 2011 election
but failed to form a government despite winning the most votes.
After a centre-right cabinet collapsed over another corruption
scandal, he quit the party helm in February 2013 to enable his
hand-picked successor Bratusek to form a new government.
Bratusek's government hoped to reduce the budget deficit to
4.2 percent of gross domestic product this year, in line with EU
demands, and down from 14.7 percent in 2013 when the deficit
soared due to state injections in local banks.
But Jankovic said on Friday Slovenia should launch 10 to 12
large infrastructure programmes in order to revive the economy
and create new jobs, even if that would result in missing the
The yield on Slovenia's 10-year benchmark bond, which has
fallen back to its 2007 level this year as investor confidence
grows, rose to 3.698 percent on Friday from 3.562 a day before,
according to Reuters data, and could rise further if political
Analysts say a government collapse would slow down reforms,
which include privatisations and trimming the public sector and
national health service.
Last year, Bratusek's government earmarked 15 firms for
sale, including the largest telecom company Telekom Slovenia
and the number two bank Nova KBM, in the hope of
selling most of them by the end of this year. So far only two
have been sold.
Jaromir Sindel, an economist at Citi Research, said early
election, if necessary, should take place as soon as possible.
"If the eventual election takes place before the summer, it
would be better for Slovenian credit as the new government could
be ready for important decisions in the second half of 2014 -
the (preparation of the) state budget for 2015 and privatization
issues," he said.
Slovenia has refused to sell its major banks, insurers,
telecom and energy firms over the past two decades so the
government still controls about half of the economy.
(Reporting By Marja Novak; Editing by Chris Reese, Bernard Orr)