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Minister Says Slovenia Not Capable of Backing Its EU Guarantee

Ljubljana, 18 November (STA) - Development and European Affairs Minister Mitja Gaspari told the press on Thursday that Slovenia would not be able to meet its debt obligations if borrowers who resort to the the euro stability mechanism default.

The money from this fund should be treated as a reserve and should not be used to help EU members overcome the crisis, Gaspari said following today's cabinet session.

Slovenia should contribute EUR 2.073bn to the EUR 440bn eurozone stability fund, endorsed in May, but the country's participation in the scheme is still subject to a Constitutional Court review.

Ireland is believed to be on the verge of requesting this form of aid, while Portugal might be next.

Gaspari pointed out that merely the use of these funds would not automatically create any debt obligation to the countries participating in the scheme. This would only happen if the borrowers defaulted, he said.

"We have already made it clear that Slovenia is absolutely not capable of meeting such a debt obligation," Gaspari said.

"It is therefore up to the major EU countries and the entire eurozone to run their policies and approach the capital and financial markets in a way that would alleviate anxiety and instability of the markets, not increase them."

Slovenia needs the eurozone to work well. "It is the best currency area Slovenia can have," the minister said, adding that the country would have had much bigger problems had it kept its own currency.

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