Slovenia Bank Restructuring to Begin Next Month
The bailouts of the weakest banks in Slovenia should begin next month, the country's finance minister told CNBC on Tuesday, but he insisted that he is not concerned with the time-frame of the process.
Uros Cufer said the first assets would be transferred to the nation's so-called bad bank by the end of June, with the exercise due to be completed by the third quarter.
Slovenia plans to move 3.3 billion euros of bad loans from its three largest banks, NLB, Nova KBM and Abanka Vipa, to the bad bank in return for state guaranteed bonds worth 1.1 billion euros.
Cufer assured investors that Tuesday's successful bond auction would not delay the country's economic reforms. The finance ministry raised almost 55 million euros in the sale, which followed a larger auction earlier in May - just two days after Moody's downgraded the country's credit rating - in which it raised 2.7 billion euros.
"This [the bond auction] is not connected, we know we need to do our reforms very quickly. This is what we have explained to our investors and we are now delivering what we have promised," he said.
"We are not going to focus on time. We want to do a very transparent, professional process and we want to maximize the price, not time."
(Read More: After Cyprus, Is Slovenia Next Euro Zone Domino?)
Cufer added that the state-owned companies Slovenia has pledged to sell in order to avoid an international bailout is the first of a number of measures.
"We put the list of 15 companies to the parliament and this is just a first package so we will see how things proceed and see what else we can do," he said.
The much-anticipated sell-off package includes the country's second largest bank, its biggest telecoms operator and the national airline.
EU Economic and Monetary Affairs Commissioner Ollie Rehn said it was premature to decide on the credibility of Slovenia's reform plans on Monday.
"It is too early to say whether the programs provide a sufficiently strong and credible response to the major challenge the country faces for the moment," he said.
The Organisation for Economic Co-operation and Development (OECD) warned that Slovenia is heading toward a severe banking crisis and a deep recession despite recent reforms in an economic survey of the country in April.
(Read More: Slovenia Faces 'Severe Banking Crisis': OECD)
"Slovenia has been hit hard by a boom-bust cycle, compounded by reform backlogs and the euro area sovereign debt crisis," the OECD said, adding that the government's attempts to reform the banking sector and reduce the country's debt pile were "weighing on growth."