Fresh Slovenian protests amid bailout fears

LJUBLJANA (Reuters) - Around 2,500 anti-corruption protesters gathered in the center of the Slovenian capital Ljubljana on Saturday, the first such demonstrations since the center-left government of Prime Minister Alenka Bratusek took power on March 20.

People walk next to the ABank building in Ljubljana, April 15, 2013. REUTERS/Srdjan Zivulovic

Similar protests helped bring down the previous conservative government of Janez Jansa, which lost a majority in parliament in January over a corruption scandal, although those involved crowds of up to 20,000 people.

Many on the streets on Saturday hoped Slovenia could avoid a Cyprus-style bailout, seen as a risk with the country’s three biggest banks, in which the state has large stakes, nursing most of the 7 billion of euros of bad loans in the lending sector.

“Power to the people” and “Let’s fire the troika, not the people” read banners held aloft by protesters blowing whistles.

“I am here because I believe we have to get rid of anyone who has held high political office during the last 20 years,” said Damijan Sencar, a 51-year old electrical engineer. “The political elite here is corrupt.”

“I fear that things will get even worse in Slovenia if the troika comes, but I hope that can still be avoided,” he added, referring to EU/IMF bodies involved in last month’s chaotic bailout of Cyprus.


The new center-left government plans tax increases and more public sector wage cuts in order to further reduce the budget deficit, which reached 4 percent of GDP last year, down from 6.4 percent in 2011.

The government is also planning to establish by June a special bank which will take over most bad loans burdening the ailing banking sector - at the heart of concerns Slovenia could be the next euro zone member in need of financial rescue.

The small Alpine state of two million people was badly hit by the global financial crisis due to its dependency on exports, and fell into recession again last year amid lower export demand and a fall in domestic spending caused by budget cuts.

Unemployment stands at a 14-year high and is expected to rise further by the end of the year.

The government this week held non-deal fundraising road shows in the main global financial centers, although Finance Minister Uros Cufer told Reuters last month the country had sufficient liquidity to postpone a bond issue until the autumn.

Yields on Slovenian bonds have soared to almost 7 percent since March when the Cyprus bailout deal was announced, but eased to 5.936 percent on Friday for the country’s 10-year benchmark bond, according to Reuters data.

Slovenia issued its last bond in October, a $2.25 billion 10-year paper with a yield of 5.7 percent. The government says the country will be able to solve its problems without international help.

Reporting By Marja Novak; editing by Mike Collett-White