Political novice wins power in Slovenia, hints at revisiting economic reform plan (updated)

Telekom Slovenije, D.d

13/07/2014 21:01

* Euro zone country narrowly avoided international bailout 
    * Son of Olympic athlete wins, must lead recovery 
    * PM frontrunner cool on some privatisations 
    * Investors wary of backsliding 
 
 (Updates with official count) 
    By Marja Novak and Zoran Radosavljevic 
    LJUBLJANA, July 13 (Reuters) - Centre-left political novice 
Miro Cerar led his party to victory in Slovenia's election on 
Sunday, indicating he would rewrite a reform package agreed with 
the European Union to fix the euro zone member's depleted 
finances. 
    The result will test investor nerves, given Cerar's 
hostility to some of the big-ticket privatisations that the EU 
says are key to a long-term fix for Slovenia, which narrowly 
avoided having to seek an international bailout for its banks 
last year. 
    Cerar's six-week-old SMC party won 34.8 percent of the vote, 
which translates to 36 seats in the 90-seat parliament. That 
would give the 50-year-old law professor the strong mandate his 
recent predecessors have lacked, potentially going some way to 
restoring political stability after years of turbulence and weak 
government.  
    The centre-right SDS party was in second place with 20.6 
percent and a string of smaller centre-left parties also won 
seats and were lining up to join Cerar in government. 
    Success for Cerar, whose Olympic gymnast father was one of 
Slovenia's greatest ever sportsmen, is punishment by voters for 
the traditional parties, tarnished by corruption scandals and 
years of economic turmoil in the ex-Yugoslav republic. 
    Outgoing Prime Minister Alenka Bratusek called Sunday's snap 
election after losing public confidence. Cerar's government will 
now oversee a raft of crisis measures agreed with the EU to 
reduce Slovenia's budget deficit and remake an economy heavily 
controlled by the state. 
    Cerar, however, opposes the sale of telecoms provider 
Telekom Slovenia  TLSG.LJ  and the international airport, 
Aerodrom Ljubljana  ARPO.LJ , fuelling investor fears of 
backsliding. 
    Suggesting he planned to revisit the crisis programme agreed 
under the previous government, Cerar told Reuters: "Our party 
will aim for Slovenia to fulfil its EU obligations but within 
that we will seek our own ways to reach these goals in the best 
way for Slovenia." 
    He said his cabinet would immediately consider which 
companies would remain in state hands and what to do with the 
rest. "I'll do my best to have our privatisation programme in 
place this year," he said. "This will be one of the priorities 
of the government." 
     
    REFORM DOUBTS 
    The outgoing government suspended the privatisation process 
this month pending the formation of a new government, which is 
not expected before mid-September. 
    Cerar will have to find other ways to raise cash if he is to 
meet a target agreed with the EU to slash back Slovenia's budget 
deficit to 3 percent of output by 2015, from a forecast 4.2 
percent this year. 
    He will form the fourth government since the 2008 financial 
crisis, which shredded Slovenia's reputation as an economic 
trailblazer in ex-Communist Eastern Europe. 
    Analysts expect him to turn to the Social Democrats (SD) and 
the Desus pensioners' party to form a coalition, but he may cast 
the net even wider in order to shore up support. 
    Both the SD and Desus were part of the outgoing cabinet and 
were reluctant recruits to the toughest of Bratusek's crisis 
measures, particularly privatisation.  
    "In the more likely scenario that the centre-left assumes 
power, the next cabinet will likely delay or halt many of the 
reforms necessary to improve Slovenia's public finances," said 
Tsveta Petrova, an analyst at Eurasia group.  
    "Still, the country might see some anti-corruption 
initiatives in line with Cerar's election campaign." 
    Cerar created his Party of Miro Cerar (SMC) barely six weeks 
ago and shot to the top of opinion polls among voters looking 
for someone new and untarnished by the corruption scandals that 
have dogged the mainstream parties.  ID:nL6N0PM1K3   
    He owes much of his celebrity to his gymnast father, twice 
Olympic pommel horse champion when Slovenia was part of 
Yugoslavia. 
    State meddling in the economy was at the heart of the crisis 
that began when the global economic downturn hit Slovenia's 
vital exports. Bad loans exposed years of reckless lending and 
an economic model that had largely avoided the privatisations 
pursued by others in Eastern Europe after the Cold War ended. 
    In December 2013, Bratusek's government poured 3.3 billion 
euros into the banking system to keep it afloat and avoided 
becoming the latest member of the 17-nation euro zone to seek a 
bailout from the European Union and International Monetary Fund. 
 
 (Writing by Matt Robinson; Editing by Susan Fenton) 
 ((Marja.Novak@thomsonreuters.com)(+386-8-205-6369)(Reuters 
Messaging: marja.novak.thomsonreuters.com@reuters.net)) 
 
Keywords: SLOVENIA ELECTION/