(Adds referendum vote, governor quotes, details)
By Marja Novak
LJUBLJANA May 24 Slovenia's parliament voted on
Friday to change the constitution to ensure governments run
balanced budgets from 2015, part of economic reform efforts to
ensure the euro zone state will not need a bailout.
It also tightened the rules on referendums, which will no
longer be held on laws involving taxes, the budget or human
rights. Referendums instigated by trade unions and political
parties have been used to block proposed reforms in the past.
Slovenia is struggling to curb a budget deficit that has
soared since the global crisis ravaged its export-driven economy
and is forecast to double this year to 7.9 percent of output.
Prime Minister Alenka Bratusek's two-month old government is
racing to persuade financial markets and the European Commission
that it can enforce long-delayed reforms and avoid becoming the
sixth euro zone country to seek aid.
Bank of Slovenia governor Marko Kranjec said on Friday a
bailout could be avoided by consolidating public finances,
enforcing structural reforms and drawing foreign investment.
"The ball is in the government's side of the court," he told
Reuters on the sidelines of a financial conference in Croatia.
Slovenia is the only ex-communist state in Europe not to
have sold its main banks, which are choking on most of the
financial sector's 7 billion euros ($9 billion) of bad loans.
"The parliamentary vote (on budget limits) is positive news
as it shows that political consensus on important matters has
finally been reached," said Saso Stanovnik, chief economist at
investment firm Alta Invest.
"But the government will have to act fast and immediately
start a complete reform of the public sector to bring down
government spending as required by the amendment."
The yield on Slovenia's benchmark 10-year bond fell slightly
to 5.9 percent on Friday, according to Reuters data, and
analysts said it could decline further.
"The adoption of the fiscal rule and hopes of a more
ambitious programme of fiscal consolidation as a result should
be well received by the market, and by the European Commission,"
said Standard Bank analyst Timothy Ash.
The government has said it will sell Slovenia's second
largest bank Nova KBM , main telecoms provider
Telekom Slovenia, the Ljubljana airport, airline Adria
Airways and 11 other companies to raise funds.
It also plans to raise value-added tax by 2 percentage
points to 22 percent from July and reduce public sector wages.
Kranjec said the VAT increase would "certainly impact
consumption and, later on, production", although that could be
offset by a possible rise in exports. The central bank is
sticking to its April forecast of a 1.9 fall in GDP this year.
Slovenia bought itself some time earlier in May when it sold
two international bonds, raising $3.5 billion. It will need to
return to the market early next year to refinance a 1.5 billion
euro five-year bond which matures on April 2, 2014.
($1 = 0.7751 euros)
(Reporting By Marja Novak, additional reporting by Igor Ilic in
Croatia; Editing by Zoran Radosavljevic and Catherine Evans)