March 15, 2018 / 1:06 PM / a year ago

Slovenia prepares for early election in May after PM quits

LJUBLJANA (Reuters) - Slovenia will likely hold an early national election in May, the president’s office said on Thursday, after Prime Minister Miro Cerar resigned protesting about legal obstacles to a key development project.

Miro Cerar, Slovenia's Prime Minister speaks during a news conference announcing his resignation in Ljubljana, Slovenia, March 14, 2018. REUTERS/Borut Zivulovic

Cerar said he had also had enough of pressure from trade unions and what he described as obstruction from coalition partners when he said late on Wednesday he was stepping down.

Slovenia was already due to hold elections in June. But President Borut Pahor had decided after meeting Cerar not to nominate an interim prime minister to lead the government until then, his office said.

Pahor believed “it is better to call premature parliamentary election” in the last two weeks of May, his office added. That would be the country’s third early vote in a row.

The presidency said he would hold off formally calling the vote until he met parties and lawmakers next week. They also have the right to nominate an interim prime minister - though that was seen as highly unlikely so close to election day.

Cerar resigned hours after the Supreme Court annulled the result of a September referendum that had approved a 1-billion-euro railway project which was the biggest investment project of his center-left government.

He has also faced strikes by public sector workers demanding wage hikes, alongside squabbling in the governing coalition, made up of his Party of Modern Centre, the Social Democrats and the pensioners’ party Desus.

The Chamber of Commerce and Industry said earlier on Thursday that Cerar’s resignation did not pose a significant risk to the economy, as the political system had already been gearing up for an election.

The government’s macroeconomic institute UMAR on Thursday increased its GDP forecast for 2018 to 5.1 percent from the 3.9 percent forecast in September, saying the economy would be boosted by exports and investments.

The yield on Slovenia’s 10-year benchmark bond fell to 1.197 percent by 1310 GMT (9.10 a.m. ET)on Thursday from 1.247 percent a day before, according to Reuters data, suggesting investors were keeping their nerve.

Reporting By Marja Novak; Editing by Hugh Lawson and Andrew Heavens

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