Slovenia’s bond rally, the biggest among Europe’s former communist nations, risks faltering as a government budget dispute following the cleanup of toxic-bank loans threatens to unseat Prime Minister Alenka Bratusek.
Slovenian Prime Minister Alenka Bratusek will seek a vote of confidence in her four-party government, which is embroiled in a dispute over how to raise funds and heal the budget after a bank bailout last year.
Slovenians began voting for a new government that will have to tackle a widening budget deficit, hold back rising debts and keep the first former communist nation to use the euro from slipping back into recession.
The Slovenian Democratic Party of Pensioners quit Prime Minister Janez Jansa’s four-party coalition, raising the risk the nation will hold a second round of early elections in a year and be forced to seek a bailout.
A move to make the European Central Bank chief supervisor of euro-area lenders, paving the way for direct bailouts from the currency bloc’s firewall fund, may come too late to help Slovenia, Prime Minister Janez Jansa said.