Thursday

19th Sep 2019

Markets punish Slovenia for political crisis

Slovenia's borrowing costs have reached 'bail-out territory' after lawmakers rejected the premier-designate, putting the euro-country on the line for further downgrades by ratings agencies.

Zoran Jankovic, the mayor of Slovenia's capital Ljubljana, fell four votes short of the 46 needed to be approved as prime minister by the parliament, with the country's president set to re-cast his name or propose someone new within two weeks.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Markets have reacted negatively to the political problems in Ljubljana (Photo: European Commission)

Jankovic's Positive Slovenia - a centre-left party - won the most votes in snap elections in December after the government of Borut Pahor was toppled over pensions reform and budget cuts.

Slovenia, the first post-Communist nation to adopt the euro five years ago, needs to cut public spending to comply with new EU fiscal rules and the upcoming intergovernmental treaty on budget discipline. According to central bank governor Marko Kranjek, Ljubljana needs to cut some €1 billion to meet requirements.

Ratings agencies have already reacted to the prolonged crisis, with Moody's downgrading Slovenia to A1 in December and Fitch putting its AA- rating on "negative watch" with a possible downgrade due this month.

The borrowing cost on Slovenia's 10-year bond jumped above seven percent this week when compared to German bunds - an "unsustainable" territory attained last year by Italy and Spain, which prompted intervention from the European Central Bank.

Madrid fared well on Thursday in its bond sale, raising €10 billion, twice as much money as it planned, as domestic banks used money made available by the ECB to buy up government debt. The average yield on the three-year bond was 3.3 percent.

Italy also saw increased interest for its short-term papers on Thursday, raising €12 billion with an average yield of 5.9 percent, a good omen for the three-year bonds worth €2-3 billion planned for Friday.

Centre-left wins in Croatia, scores well in Slovenia

Elections on Sunday brought in a left-leaning coalition in Croatia, as predicted, but caused a surprise in neighbouring Slovenia, where a new centre-left party led by a businessman mayor surpassed all expectations.

Hungary tops EU anti-fraud investigation list

In its annual report, the EU's anti-fraud agency said it concluded nine investigations into Hungary and found irregularities in seven cases. In total, the agency recommended the recovery of €371m EU-wide.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

News in Brief

  1. EU adds €100m to research and Erasmus budgets
  2. Ambassador: UK Poles should 'seriously consider' leaving
  3. Trump's UK ambassador stirs up anti-EU feeling
  4. Brexit chaos is lesson to other EU states, ECB governor says
  5. EU condemns Israel's latest land grab
  6. Scotland to keep some laws aligned with EU after Brexit
  7. Spain to hold fresh election in November
  8. Turkey ups pressure on visa-free entry into EU

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  2. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  3. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  4. Nordic Council of MinistersNo evidence that social media are harmful to young people
  5. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  6. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  7. Nordic Council of MinistersEducation gets refugees into work
  8. Counter BalanceSign the petition to help reform the EU’s Bank
  9. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  10. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  11. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  12. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat

Latest News

  1. A new Commission for the one percent
  2. Juncker: No-deal Brexit 'palpable'
  3. Germany adopts blockchain strategy and says no to Libra
  4. Revanchist Russia continues to rewrite European history
  5. How EU trains discriminate against the disabled
  6. These are the crunch issues for the 2019-2024 EU commission
  7. Defending the 'European way of life' name splits MEPs
  8. Hungary claims EU 'witch-hunt' over rule of law hearing

Join EUobserver

Support quality EU news

Join us