Slovenia has the funds to recapitalize its troubled banks, the central bank said on Tuesday, indicating that the results of stress tests due this week mean Europe would not need to bail out another member of its currency union.
The test results, which are expected to be announced soon, will determine whether Slovenia can fix its banks on its own or has to seek assistance from the European Union and the International Monetary Fund, much like Greece, Ireland, Portugal, Spain and Cyprus, Reuters reports.
Slovenia's banks are burdened with an estimated $10.88 billion in bad loans - approximately one-fifth of all output - after two recessions since the start of the global crisis devastated the country's exporters.
The central bank said that a bill had been passed allowing the government to inject up to $6.45 billion into the banks.
"The appropriate legal basis for their recapitalization has been prepared and the government has the funds for that purpose, so the recapitalization will be implemented very quickly," the central bank said, according to Reuters.
Even if it escapes without a bailout, Slovenia faces trouble ahead. Economic output has shrunk 11 percent since 2008 and it is the only member of the 17 nation European bloc besides Cyprus that is expected to see further economic contraction next year.
At the same time, unemployment has topped 12 percent and is expected to keep rising as the government cuts spending.
More Stories
- EUROPEAN INVESTMENT BANK: Bosnia and Herzegovina: EIB provides €340 million to advance works on northern part of Corridor Vc
- ABN AMRO SERVICES COMPANY: Fempower Your Growth: like tindering with female entrepreneurs
- EUROPEAN INVESTMENT BANK: Egypt: Team Europe - EIB and Banque Misr work together to support private businesses and speed up the recovery of SMEs from COVID-19
- ASIAN DEVELOPMENT BANK: ADB, NNS Sign Loans to Build Milestone Solar Power Project in Uzbekistan
- ASIAN DEVELOPMENT BANK: $123 Million ADB Loan to Help Build Elevated Walkways in Manila
- EUROPEAN INVESTMENT BANK: Germany: EIB provides €15 million of funding to IDnow
- ASIAN DEVELOPMENT BANK: CAREC Endorses Long-Term Strategy to Promote Safe, Sustainable, and Inclusive Tourism
- EUROPEAN INVESTMENT BANK: EIB Group provides €150 million to support artificial intelligence companies
- ASIAN DEVELOPMENT BANK: ADB Approves $430 Million to Help Rehabilitate Power Distribution Networks in Uttar Pradesh, India
- EUROPEAN INVESTMENT BANK: Greece: EIB backs EUR 470 million road safety scheme