By Leos Rousek
Slovenia's first female prime minister lost the leadership of
her center-left party on Saturday after a year in office, raising
the prospect of early elections in this small euro-zone country in
the midst of a bank-rescue process.
Premier Alenka Bratusek failed to win a vote to run the Positive
Slovenia party after a challenge by a party founder and Ljubljana
Mayor Zoran Jankovic. The party's three coalition partners have
threatened to quit the government if Mr. Jankovic takes over the
ruling party.
"Without the support of my party, I can no longer be the head of
government," Ms. Bratusek said during the party's congress, adding
that without running her own party she will lack "equal footing"
with her coalition partners.
Mr. Jankovic, a millionaire who derives his wealth from a chain
of grocery stores, founded the Positive Slovenia party in 2011. It
went on to win parliamentary elections that year.
But Mr. Jankovic failed to find coalition partners to get a
majority in the legislature. He stepped down as party leader in
early 2013 amid corruption allegations that he has denied. He
picked Ms. Bratusek as his successor last year, which allowed the
party to form the current governing coalition.
Slovenia, once a model economic reformer among former Communist
countries in Central Europe, was hit hard by the financial crisis
in 2008 and the subsequent euro-zone debt crisis.
Last year, the small former Yugoslav republic of two million
people narrowly dodged an international bailout after Ms.
Bratusek's government injected $4.4 billion to fix the banking
sector, dominated by three state-owned lenders. The government is
seeking to slash its budget deficit to 4.2% of gross domestic
product this year, in line with demands by the European Commission,
after the bank-sector bailout pushed the figure to nearly 15% last
year.
After the party leadership vote, Mr. Jankovic urged Ms. Bratusek
to stay on as prime minister, but other coalition members are
likely to push for an election to be held this year, about 12
months ahead of schedule.
According the Slovenian news agency STA, Ms. Bratusek is likely
to hold talks on the future of her cabinet on Tuesday.
"Early elections appear likely which will complicate the reform
agenda," said Timothy Ash, a London-based analyst at Standard Bank
Group Ltd.
Last year, Ms. Bratusek's government slated 15 state-owned
companies--including the country's No. 2 bank in asset terms, Nova
KBM, and telecommunications company Telekom Slovenije--for
privatization. The process has been slow and the country still
hasn't sold its major firms, with about half of the economy in
state hands.
However, the country has succeeded to raise sufficient financing
of its budget needs through early 2015.
"The plus is that the [Finance Ministry] has used the past year
or so to get ahead of the curve by significantly pre-financing
itself," Mr. Ash said.
Write to Leos Rousek at leos.rousek@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires