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D&B Preserves Slovenia's Rating, Urges Pension Reform

Ljubljana, 09 May (STA) - International rating firm Dun&Bradstreet (D&B) preserved Slovenia's DB2c low risk rating in its May report released on Monday. While labelling the trend as stable, D%B noted that the mid-term stability of the country's public finances would depend on the fate of the pension reform.

The report mentions the household appliance maker Gorenje's plans to move operations abroad, suggesting that Slovenia's competitiveness was being undermined by a high administrative burden, complex bankruptcy procedures and relatively high tax rates.

Noting a narrowing of the budget deficit in the final quarter of 2010 following a rise in tax revenues, the report says that austerity measures would allow Slovenia to bring the deficit under the 3% of GDP Maastricht threshold.

On the other hand, D&B urges caution, pointing to the EUR 243m state contribution to the recapitalisation of the NLB bank, obligations related to the Portuguese and Irish bailout and rising servicing costs following the increase in the ECB base rate.

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