Slovenia parliament confirms Jansa as prime minister

LJUBLJANA (Reuters) - The Slovenian parliament confirmed conservative Janez Jansa as prime minister on Saturday, almost two months after an inconclusive December 4 election, parliamentary speaker Gregor Virant said.

Janez Jansa (C), leader of the Social democratic party (SDS) is congratulated after the Slovenian parliament confirmed him as the euro zone member's new Prime Minister in Ljubljana January 28, 2012. REUTERS/Srdjan Zivulovic

Jansa has 15 days to put forward a cabinet charged with driving economic growth and introducing reforms to stop the country’s credit rating from being cut - but he has a corruption trial hanging over him, which could derail his premiership if he were found guilty.

The cabinet must be confirmed by parliament, in which Jansa’s five-party coalition has a solid majority.

Jansa, also prime minister from 2004 to 2008, has promised to cut taxes, red tape and the budget deficit, ease the credit crunch and raise the retirement age in the euro zone member.

“The first steps of this government will be stabilisation of public finances ... decrees to give impetus to economic growth and enable formation of new jobs,” Jansa told reporters after the vote, saying he hoped the new government would be voted in by February 10.

President Danilo Turk said earlier this week that Jansa lacked legitimacy for the post because of a trial, which began in September, in which he and four co-defendants are charged with bribery over a 2006 deal for Finnish armoured vehicles worth 278 million euros ($365 million). Jansa denied all charges.

Earlier this month parliament rejected Turk’s candidate as prime minister, centre-left Zoran Jankovic. Jankovic’s Positive Slovenia party won most votes at the election but was unable to form a coalition that would have a majority in parliament.

Jansa’s centre-right Slovenian Democratic Party (SDS) signed a coalition pact this week with the centre-right People’s Party and New Slovenia, the centrist Civic List of Gregor Virant and the pensioners’ party Desus. The five parties hold 50 out of 90 seats in parliament.

On Friday credit rating agency Fitch cut Slovenia’s sovereign debt rating by two notches to A because of a deterioration in the economic outlook.

All major credit agencies have cut Slovenia’s rating since September because of the political crisis, lack of reforms and the deepening euro zone debt crisis, and put it on negative watch. Slovenia is rated A+ by Standard&Poor’s and A1 by Moody’s.

The political crisis started in September when parliament ousted the centre-left government of Prime Minister Borut Pahor amid internal coalition squabbles and an inability to implement reforms that would speed economic growth.

“The new government will have a hard time because of the need for big budget savings ... and because it is made of five parties which are very different,” Meta Roglic, an analyst at the daily Dnevnik, told Reuters.

“Even so it might succeed in staying in power for the full four-year mandate, particularly since it can expect that the opposition will support some of the main economic reforms,” she added.

Slovenia’s budget deficit soared to some 5.5 percent of GDP in 2011 from a balanced budget in 2007 because of lower tax income and high government spending.

On Thursday, the government’s macroeconomic institute said Slovenia’s economic growth would slow to 0.2 percent this year from 0.5 percent in 2011 because of lower export demand and low domestic spending.

Slovenia was the fastest-growing euro zone member in 2007 but its export-oriented economy was badly hit by the global crisis and shrank by 8 percent in 2009. Recent data showed another recession was possible as the economy shrank by 0.5 percent in the third quarter of 2011.

Reporting By Marja Novak; Editing by Tim Pearce