* Privatisation plan to go to parliament in 14 days - PM
* Government to send stability plan to EU by May 9
* Slovenia racing to avoid need for financial bailout
* PM says 2013 budget revision likely
By Marja Novak
LJUBLJANA Slovenia will have a plan ready to put
to parliament in two weeks to sell off state assets, probably
including a bank, the country's prime minister said on Friday as
her government races to avert a bailout.
In her first major news conference in Ljubljana since taking
office last month, Alenka Bratusek said her government would
also send a 'stability programme' to European Union partners in
Brussels by May 9 "at the latest".
The head of Slovenia's largest bank, state-owned NLB, told
Reuters on Friday he did not expect the bank could be sold this
year but finding a buyer would be possible in 2014 if the bank
is recapitalised and restructured.
The tiny ex-communist country is coming under increasing
pressure from financial markets after the messy bailout of
Cyprus last month, raising concerns it could be the next euro
zone country to need rescuing.
The country of 2 million people needs to raise about 3
billion euros ($3.9 billion) this year to recapitalise its
biggest state-owned banks, repay maturing debt and cover its
Yields on its 10-year benchmark bond rose to 6.61 percent on
Friday - closer to the 7 percent threshold at which a country's
finances can become unsustainable - from 4.77 percent on March
15, the day before the Cyprus bailout deal.
"We will immediately start processes to privatise one or two
companies. My wish is that one of those would be a bank,"
Bratusek said, adding that the proposals would come before
parliament in 14 days.
Investors have complained over the lack of clarity regarding
the plans of the three-week-old centre-left government, but
Bratusek said she believed decisions should be reached before
they are revealed to the public.
"I find it difficult to talk about things until they are
agreed upon. I think it is right to do something first and then
present it (to the public)."
Slovenia, the first state to break away from the former
Yugoslavia and a trailblazer for ex-communist eastern Europe
when it joined the euro zone in 2007, shied away from
privatising its biggest banks, which are now burdened with bad
loans. Its export-driven economy has been pounded by falling
demand in the debt-laden euro region.
Trying to calm markets, Slovenia's Finance Ministry said on
Thursday it planned the early rollover of debt maturing in June
with an auction of around 500 million euros ($656 million) worth
of 18-month treasury bills on April 17.
"I hope and wish that the T-bill auction will be
successful," Bratusek said.
If successful, the operation which was probably agreed ahead
of time with Slovenia's mostly state-owned banking sector, could
give markets more time to calm down following the Cyprus's
Bratusek said the 2013 budget adopted by the previous
government was "unrealistic" and would likely be revised to
introduce more savings and tax increases, adding it was
unrealistic to expect that the government could run a balanced
budget as early as in 2015 as suggested by the opposition.
Last year the previous, conservative government - which lost
its majority in parliament this January over a corruption
scandal - managed to reduce the budget deficit to 3.7 percent
from 6.4 percent in 2011.
Bratusek said the new government will continue with
austerity but will also aim to do it in a way so as not to cause
further economic contraction.
"It is a fact that we have problems, but I assured
(Brussels) that we will continue with reforms," Bratusek said.
The government expects the economy to contract by 1.9
percent this year versus 2.3 percent in 2012 due to weak export
demand and a fall in domestic spending caused by budget cuts but
expects a mild recovery in 2014.
The country's banks, mostly state-owned, are nursing some 7
billion euros of bad loans which equals a fifth of GDP. The
government plans to establish a bad bank by June that will take
over bad loans and enable bank privatisation.