(ANSAMed) - LJUBLJANA, AUGUST 10 - Slovenia sees its banks and
bonds downgraded by two rating agencies for the second time this
year, fueling speculation that the once-booming country will
soon be the sixth EU member to apply for a bailout.
Moody's cut Slovenia's debt rating by three notches, from A2 to
Baa2, Standard & Poor's cut it by one notch to A from A+, and
Fitch on Wednesday downgraded it one point, to A-, on ''the
worrisome state of the country's financial sector.''
The three agencies cited banking deterioration and government
slowness to recapitalize state lending institutions as the
reasons for their negative outlooks.
The government needs to inject 2.8 billion euros, or 8% of GDP, to stabilize its banks, according to Fitch. This sent the spread flying. Slovenia's 10-year notes are now retailing at 7.03%, a rate at which other countries threw in the towel and turned to the EU for a bailout. Janez Jansa's conservative administration denies all such rumors, and expressed ''surprise'' that the agencies ''failed to take into account savings measures implemented last May,'' officials said. The Jansa government also cited measures to reduce the deficit from 6.4% in 2011 to 4% this year, while containing public debt at 48% of GDP.
Slovenia joined the EU in 2004 and adopted the single currency in 2007, the first former Eastern bloc country to do so. It is among the countries hardest hit by the euro zone crisis, and its society is becoming more and more pessimistic, German daily Suddeutsche Zeitung wrote in a Wednesday article that was widely quoted by Slovenian media.
''At first it resembled a small Austria, but in the past two years it has become more and more like Italy,'' Suddeutsche Zeitung wrote. (ANSAMed).
The government needs to inject 2.8 billion euros, or 8% of GDP, to stabilize its banks, according to Fitch. This sent the spread flying. Slovenia's 10-year notes are now retailing at 7.03%, a rate at which other countries threw in the towel and turned to the EU for a bailout. Janez Jansa's conservative administration denies all such rumors, and expressed ''surprise'' that the agencies ''failed to take into account savings measures implemented last May,'' officials said. The Jansa government also cited measures to reduce the deficit from 6.4% in 2011 to 4% this year, while containing public debt at 48% of GDP.
Slovenia joined the EU in 2004 and adopted the single currency in 2007, the first former Eastern bloc country to do so. It is among the countries hardest hit by the euro zone crisis, and its society is becoming more and more pessimistic, German daily Suddeutsche Zeitung wrote in a Wednesday article that was widely quoted by Slovenian media.
''At first it resembled a small Austria, but in the past two years it has become more and more like Italy,'' Suddeutsche Zeitung wrote. (ANSAMed).
