Latest euro-zone bailout? Slovenian PM Alenka Bratusek threatens to quit

She warns 'time for games is over' and faces party leadership challenge this month

The Slovenian Prime Minister Alenka Bratusek threatened today to quit the government if she loses a party leadership vote this month, saying the country had no time for "games" as it seeks to avert an international bailout.

Bratusek's resignation would almost certainly trigger a snap election, delaying a raft of crisis measures to shore up Slovenia's finances and increasing the likelihood it will become the latest member of the 17-nation euro zone to seek EU/IMF aid.

In a direct challenge to Bratusek's authority, Ljubljana mayor Zoran Jankovic, who created the Positive Slovenia party in 2011 but resigned in February, announced on Wednesday he would challenge her for the party leadership at a congress on 19 October.

Bratusek's coalition allies have said they would quit the governing alliance if Jankovic, who has been tainted by accusations of corruption, returns as party leader. The government already faces a confidence vote, expected in November, over the 2014 national budget.

Analysts say it is far from certain which way the party leadership vote will go. Technically Bratusek can continue as prime minister even if not leader of the party, but she made clear she would not.

"The fact is that someone else will have to try to form a government if I would not have sufficient support in the party," Bratusek said in a statement.

"My biggest worry is how to effectively overhaul the banks, confirm a sustainable budget, start a new development and investment cycle," she said. "It should be clear to everyone that the time for games is over."

Jankovic stepped aside as leader of Positive Slovenia in February to clear the way for Bratusek to form a coalition government with the urgent task of overhauling the Alpine country's debt-laden banks and offloading more than a dozen state-controlled companies.

The other coalition parties had refused to cooperate with Jankovic after a state anti-corruption commission said he was unable to explain the origin of a large part of his income over recent years. Jankovic denied any wrongdoing.

Ex-socialist Slovenia's export-driven economy was the euro zone's fastest growing when it joined the bloc in 2007 but hit a wall with the onset of the global crisis.

Its banks, mostly state-owned, are now nursing an estimated 7.9 billion euros ($10.7 billion) in bad loans, equivalent to as much as 22.5 percent of national output. The government is waiting on the results of an international audit ordered by the European Commission and due in November before it can recapitalise the banks.

With Slovenia's recession forecast to last until at least 2015, markets are increasingly nervous that the recapitalisation bill will be too high, forcing the country of 2 million people to seek a bailout.

Though Slovenia's economy represents a tiny fraction of the euro zone's entire output, another bailout following that of Cyprus would further dent confidence that the single currency zone can contain its debt crisis.

Having issued two bonds worth $3.5 billion in May, Slovenia will have to tap the markets again before its 5-year 1.5 billion euros bond expires on 2 April.

"The struggle between Jankovic and Bratusek is undecided and either of them could win at the congress," said Borut Hocevar, a political analyst at the Slovenian daily Finance.

"But if Jankovic wins the government will fall, which would increase political instability for several months and make a bailout practically unavoidable."

Reuters

Start your day with The Independent, sign up for daily news emails
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
news
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
News
i100
Sport
Alexis Sanchez missed a penalty before scoring the opening goal with a header at the back post
footballLive! Sanchez makes up for penalty miss to put Arsenal ahead
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
News
i100
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Sport
Rooney celebrates with striker-partner Radamel Falcao after the pair combine to put United ahead
footballManchester United vs Newcastle match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Ashdown Group: Marketing Manager/Marketing Controller (Financial Services)

£70000 - £75000 per annum + benefits: Ashdown Group: Marketing Manager/Marketi...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all