January 14, 2013 8:05 pm

EU bailout not for Slovenia, says president

Slovenia has no need “whatsoever” for an EU bailout, according to its president, who emphasised the necessity to improve the scandal-hit country’s justice system before citizens would embrace further economic reforms.

Borut Pahor, who won the presidency in December after being ousted as prime minister in 2011, also expressed his determination to move beyond austerity and begin reinvesting in the country’s infrastructure.

“Fatigue is a very good word for a description of the general mood in the country,” Mr Pahor told the Financial Times. “What we need is to end this austerity.”

Slovenia in 2007 became the first former Communist-bloc country to join the euro – a point of pride for the nation of 2m.

The country has since become a weak link in the 17-member eurozone after an Irish-style property bust tore a hole through its banks, prompting repeated speculation that Ljubljana would be forced to seek a bailout from Brussels.

Slovenia’s economic struggles have been compounded by a brewing political crisis over high-level corruption that has triggered widespread protests.

The country’s anti-corruption watchdog this week accused Janez Jansa, the prime minister, of graft, citing €200,000 in private assets that he allegedly failed to declare. As a result of the report, Mr Jansa’s centre-right coalition partners have asked him to resign – a request he has so far rejected.

Mr Pahor acknowledged that his government had misjudged the severity of the financial crisis in 2009. But with the passage of a pensions overhaul in December, he argued that Slovenia now had the wherewithal to deal with any shortfalls in its banking system.

“There is no reason whatsoever [for a bailout],” Mr Pahor said, adding: “I think the government has enough resources.”

Olli Rehn, the economics and monetary affairs commissioner, appeared to endorse that assessment during an appearance at a think-tank in Brussels on Friday, saying: “The country is taking action to address its economic and fiscal problems, which includes also a very important pension reform.”

Mr Pahor pledged to continue work to shore up the country’s banking system and reform other aspects of the economy, including the labour market. But the success of those endeavours ultimately hinged on strengthening the rule of law, he argued.

“The general feeling of the people is still a feeling of injustice,” Mr Pahor said.

Without some sense of basic fairness, he argued, it was difficult to persuade citizens to accept other sacrifices. He cited abuses related to privatisation, in particular, as an area that merited a more thorough review by judicial authorities.

“It all starts with rule of law,” the president said, calling it “crucial for the success of reforms”.

Reflecting on other lessons he had drawn from his time as prime minister, Mr Pahor also promised to wield power in a more consensual fashion.

“Maybe my mistake being prime minister is I thought it was my duty to push, to go with reforms no matter how strong the support of social partners,” he said. “I underestimated this, and I paid a huge price.”

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