Saturday, March 30, 2013

Slovenian bailout 'is inevitable': Second tiny EU state caught in fallout from Cyprus banks crisis

The Cyprus bailout crisis could lead to yet another country’s banks being put in peril.

The cost of borrowing in Slovenia tripled last week amid market fears for the future of eurozone countries.

Government bond rates soared from 1.2per cent to 4.26per cent, putting the future of the country’s nationally owned banks at risk.

‘Slovenia is now inevitably heading to a bailout, the eurozone shot itself completely in the foot following the Cyprus issue,’ said Tim Ash, head of European research at Standard Bank.

The International Monetary Fund said the country’s banks ‘are under severe distress’ due to the size of bad loans sitting on their books.