Barroso Urges Slovenia to Get its Banking Sector in Order
The European Commission expects Slovenia to take ambitious measures to get its banking sector in order and enshrine the golden fiscal rule into the Constitution, stated European Commission President, Jose Manuel Barroso, after a meeting with Prime Minister, Janez Janša, before the EU Summit.
Brussels is keeping a close eye on Slovenia’s banking sector, Barroso said, noting that the Commission had warned Slovenia, in May, to strengthen its banking sector. “The Slovenian banking sector needs ambitious measures,” he added. While Barroso did not comment on the general assembly of Slovenia’s largest bank, NLB, which confirmed a EUR 381m recapitalisation, Janša labelled the assembly as “successful”. He stressed that the recapitalisation of the state-owned bank would meet the capital adequacy requirements set by the European Banking Authority. “This urgent step is now behind us,” said Janša. Asked whether Slovenia will be able to fix its banking sector without the help of European rescue funds, the prime minister said an answer could only be given after due diligence at Slovenian banks is complete.
Regarding the fiscal pact which Slovenia ratified in mid-April but has so far failed to implement, Barroso said he expects Slovenia to meet its obligations. “Lets hope there will be enough consensus for that”, he said, referring to the lack of the two-thirds parliamentary majority required to include the fiscal rule in the Constitution. “Slovenia is facing numerous challenges,” Barroso stressed, saying he was pleased to receive Janša’s assurance that Slovenia would respond decisively to all such challenges. Barroso added that apart from the banking sector, Slovenia must also reduce its budget deficit and ensure long-term stability of its public finances.
According to Janša, Slovenia and the European Commission hold similar views regarding the current issues facing the eurozone. “We need to harmonise certain policies,” Janša said, emphasising stronger and more centralised oversight of financial institutions. He noted also that in times of economic turmoil, Slovenia was better off having the euro and so it is also in the important to preserve it.
Janša also agreed that the EU needs to focus not only on long-term measures, but also on measures that will solve the current issues facing EU members. “The countries are in different positions, but due to political and monetary inter-dependence, we share the same fate in many areas,” Janša stressed.
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