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UPDATE 1-ECB's Jazbec: Slovenia could be downgraded due to dependence on German economy
February 2, 2015 / 12:26 PM / 3 years ago

UPDATE 1-ECB's Jazbec: Slovenia could be downgraded due to dependence on German economy

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BUDAPEST, Feb 2 (Reuters) - Slovenia’s credit rating could be downgraded because of its dependence on the German economy, the Bank of Slovenia Governor and ECB governing council member Bostjan Jazbec said on Monday.

“In recent weeks one of the credit agencies came to us and said that they are thinking of downgrading us because we depend too much on what is happening in Germany,” Jazbec told a central banking conference in Budapest.

He did not name the agency in question but added the agency said the downgrade could happen even though Germany itself would not be downgraded.

Slovenia exports about 70 percent of its production, mainly to other European Union states. Germany is its largest trading partner, accounting for almost 20 percent of Slovenia’s exports.

Moody’s upgraded Slovenia to Baa3 with a stable outlook in January. It is rated A- with a negative outlook by S&P and BBB+ with a stable outlook by Fitch.

Slovenia narrowly avoided an international bailout in 2013 when the government had to pour more than 3 billion euros ($3.4 billion) of its own money in local banks to stop them collapsing under bad loans.

Slovenia’s economy expanded by about 2.5 percent in 2014, boosted by higher export demand, after two consecutive years of recession. The government expects growth of about 2 percent this year. ($1 = 0.8834 euros) (Reporting by Gergely Szakacs, Writing by Marja Novak; Editing by Ruth Pitchford)

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