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| Slovenia's new Prime Minister, Alenka Bratusek, is hoping to avoid an EU bailout |
The
government of Slovenia has announced a package of measures it hopes will help
avoid an EU bailout.
The
measures include a tax increase, a major restructuring of Slovenia's ailing
banking sector, and a programme of mass privatisation.
Slovenia's
mostly state-owned banking sector is suffering from mounting bad debts and the
government has struggled to borrow money.
The
European Commission will now consider the plan.
It is
expected to deliver its verdict by the end of the month.
Slovenia
has been in recession since 2011, and analysts have cited it as the most likely
country to seek help from the EU following the bailout of Cyprus earlier this
year.
European
officials have expressed concern over the stability of the country's banking
sector, which is struggling under billions of euros of bad debts.
Meanwhile
the government's ability to borrow money was dealt a blow last week when
Moody's, a ratings agency, cut Slovenia's bonds to "junk" status.
Despite
this, the government was able to raise 3.5bn euros (£3bn; $4.6bn) from
international bond markets last week, which has bought it some time.
The package
of measures was announced by Slovenia's recently installed Prime Minister,
Alenka Bratusek, and her Finance Minister, Uros Cufer.
The
measures include a 2% increase in VAT to shore up government finances.
A "bad
bank" will also be created to allow the banking sector to offload its bad
debts.
Meanwhile a
total of 15 publicly-owned businesses will be sold off, including the second
biggest bank, Nova KBM, and the flag-carrying airline, Adria Airways.
The biggest
bank, NLB, has already announced plans to downsize.
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