Slovenia PM: No bailout needed


UNITED NATIONS (AP) — Slovenia's prime minister insisted that the Alpine nation does not need a bailout from the European Union, despite a crippling banking crisis that has unnerved investors and caused political gridlock.

Prime Minister Janez Jansa said Thursday that Slovenia can overcome the threat of bankruptcy on its own by quickly passing banking reform legislation and spending $3 billion to $4 billion euros buying bad debt from state-owned banks.

In an interview with The Associated Press on the sidelines of the annual gathering of world leaders at the United Nations, Jansa said his government is "determined to do everything that's possible" to prevent the need for foreign assistance.

"We don't need money from the European stability mechanism," he said. "Of course we need structural reforms which were neglected during the past."

Once the richest of the six former Yugoslav republics, the Eurozone nation has been hit with a severe recession. Slovenia's real estate bubble burst after the 2008 global financial meltdown, much like Spain, which is under pressure to seek a rescue package.

Slovenia's debt-to-GDP ratio is under 60 percent, Jansa said. By comparison, Spain's debt ratio is to 75.9 percent, according to figures published this month by the Bank of Spain.

Jansa said his government wants to start buying up bad debt from banks by the end of the year. Slovenia also plans to sell bonds later this year.

Parliament "is starting to take all necessary measures to pull Slovenia from dangerous water," he said. "We have to stabilize our banking system. This is the most important short-term measure."

Along with an overheated construction sector, Jansa blamed the crisis on the reluctance of past governments to privatize banks after Slovenia broke away from Yugoslavia.

Jansa also said the severity Europe's financial crisis was underestimated, which only prolonged the political stalemate in Slovenia, when the previous government should have been acting quickly to enact reforms.

Along with continuing to reduce its budget deficit, Jansa said Slovenia must pass pension and labor reform to "send appropriate signals to financial markets."

The prime minister said he was confident his center-right government could push pension reform through a bitterly-divided parliament, and that it could survive a referendum if one is called.

Last year, a center-left government failed to pass pension and labor reform. Jansa said his government's proposed pension reform was more palatable because it focused on increasing the number of years Slovenians must pay into the pension system, from 35 years to 40, instead of merely increasing the retirement age to 65, as the failed measure did.

Jansa will need to negotiate with the opposition, which might be less willing to cooperate after Slovenia's main opposition leader, Zoran Jankovic, was among five people briefly detained Thursday in an alleged multimillion-dollar corruption investigation into the building of a sports complex.

Jankovic and his center-left Positive Slovenia coalition won the most votes in a parliamentary election last December. But he failed to form a government and a center-right coalition led by Jansa, his longtime rival, took power.

After declaring Thursday in his address to the United Nations General Assembly that "freedom of speech is fundamental in a democracy," Jansa said there was no campaign to silence his opponents and critics.

"First, I cannot comment on concrete actions of the police and other state authorities. It would be unfair," he said. "Second, freedom of speech has nothing to do with corruption."

Jansa faces his own corruption investigation. A bribery probe is examining a deal to buy military vehicles from Finnish company Patria in 2006, during Jansa's first term as prime minister. He dismissed the charges as false.

In his General Assembly address, Jansa proposed strengthening enforcement of the 1951 U.N. Genocide Convention. He told The AP that he was motivated by the U.N.'s inability to stop the genocide in Bosnia, and that the deaths of nearly 30,000 people in Syria were "clear proof" that a legal enforcement mechanism of the Genocide Convention is needed.

Russia and China have blocked three Security Council resolutions that could have led to sanctions on Syria.

"It's not too late to stop the conflict, we can still save tens of thousands of lives," he said. "As Secretary-General Ban Ki-Moon stated Monday, we have to add some tools. Otherwise, everything is stuck with the situation in the Security Council."