July 28, 2014 / 8:30 PM / in 3 years

Slovenia to restart privatisation process before new government takes office

LJUBLJANA, July 28 (Reuters) - Slovenia’s outgoing government said on Monday that it would restart its privatisation programme before the new government takes office, after suspending it ahead of the national election earlier this month.

Prime Minister Alenka Bratusek’s centre-left government halted the programme to allow the incoming government to reconsider the privatisation process. Analysts, however, said the suspension could deter investors or bring down the prices of the companies on sale.

Selling off state-owned companies is seen as a key component of Slovenia’s ability to stabilise its finances and its economy after the government had to spend 3 billion euros last year to rescue troubled banks and narrowly avoided having to seek an international bailout.

Bratusek’s government has earmarked 15 companies for privatisation, and already sold two of them. Others on the list include Slovenia’s second-largest bank Nova KBM, airport Aerodrom Ljubljana and telecom firm Telekom.

A recently formed centre-left party SMC, led by Miro Cerar, won the election but has yet to complete talks with coalition partners on forming the new cabinet.

The outgoing cabinet’s statement on Monday did not elaborate on the reversal of its earlier decision.

“At the proposal of the Slovenian State Holding (SDH) the government decided to change its decision from July 3 that SDH would neither complete the ongoing nor begin the new privatisation procedures before the new government is formed,” the government said.

SDH is in charge of running the sale of state assets.

Slovenia, which joined the European Union in 2004 and the euro zone in 2007, has for years been reluctant to sell major companies, citing national interests. Its economy is still largely state run.

Following the election results Cerar suggested he might revisit the former cabinet’s plans and that he hoped to have their privatisation programme in place this year. (Reporting by Almir Demirovic, writing by Igor Ilic in Zagreb; Editing by Susan Fenton)

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