World Economy

Slovenia’s 2013 Bank Rescue Challenged

Slovenia’s 2013 Bank Rescue ChallengedSlovenia’s 2013 Bank Rescue Challenged

In 2013, Slovenia rescued its failing banks by wiping out stock investors and holders of about €600 million ($700 million) of debt. Now some of those investors want their money back, Bloomberg reported. While their appeals have had limited success so far, a shake-up at the central bank and a ruling from the nation’s Constitutional Court suggest the matter is far from closed. The investors are pushing for a law that would enable them to recoup losses, while putting the tiny Balkan state on a collision course with the European Union and European Central Bank. “The passing of a law like this would be like opening Pandora’s box,” said Otilia Dhand, senior vice president for central and eastern Europe for Brussels-based Teneo Intelligence. “There would be a risk of national reviews in every country that executed a bail-in.” Slovenia won permission from European authorities for the €3.2 billion rescue of its largest banks by agreeing that investors—not just taxpayers—would feel the pain. The bailout, coming near the end of the eurozone’s sovereign-debt crisis, allowed the Alpine nation of two million people to avoid a Greece-style international rescue program.


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