Slovenian elections unlikely to fix political uncertainty

By bne IntelliNews July 11, 2014

Clare Nuttall in Bucharest -


Slovenia’s snap parliamentary elections on July 13 are expected to deliver a new centre-left coalition led by the Party of Miro Cerar (SMC), a new political force that has led the polls since the vote was launched in June. However, political uncertainty is likely to remain, with the new government to be faced with making a decision on Slovenia’s stalled privatization process. 

With Cerar’s party expected to fall short of a majority in parliament, the election is unlikely to offer a fix for Slovenia’s political uncertainty. Analysts forecast the election will result in a centre-left coalition government headed by SMC alongside the Social Democrats and the Pensioners' Party. Still an unknown quantity, it's unclear how closely Cerar's policies on the key political issues - in particular privatisation - will align with the other centre-left parties, and how long Slovenia will wait for a new government to be formed.

In the five weeks since the political outsider launched his party on June 2 it has consistently led the polls. The son of an Olympic champion gymnast and a former justice minister, Cerar was a law professor and parliamentary advisor before his entry to the political scene. His party’s manifesto promotes the rule of law and accountability, economic freedom and social stability.

The latest poll published by Slovenian weekly Mladina puts SMC on 33.8% of the vote, although the center-right Slovenian Democratic Party (SDS) has been gaining in recent days, and currently sits at 22.3%. The Social Democrats and Pensioners' Party, both part of the outgoing coalition alongside Positive Slovenia, and a handful of other parties are also expected to take seats in the new parliament. 

“[F]inal results could differ from pre-election polls, given that voters' electoral preferences have been volatile in recent months due to the rise of new parties. Yet, overall, the elections will likely return a center-left parliamentary majority, with the formation of a coalition led by Cerar being the most likely scenario,” writes Teneo Intelligence vice president Otilia Dhand. 

Snap elections were called after Alenka Bratusek - Slovenia’s first female prime minister - was ousted as leader of Positive Slovenia after it failed to take a single seat in the European Parliament elections in May. Following Bratusek’s resignation, President Borut Pahor dissolved the parliament and called the snap vote.

On May 31, the former PM launched her own party, the Alliance of Alenka Bratusek, taking with her a splinter group of Positive Slovenia MPs. At one point, it looked like it could prove a platform for a political comeback, but that changed with Cerar's emergence. Bratusek’s party now risks missing out on taking part in the next parliament.

The hottest political issue of the election campaign is privatisation, as the outgoing government has come under increasing pressure to drop planned sales of major companies. On July 3, Bratusek suspended the ongoing privatisation program. “We decided that no privatisation can be finished or started until a new government is formed,” she told a press conference.

Given public opposition to state asset sales, the move was clearly meant to boost her fortunes in the election. However, it will see her successor faced with tricky decisions as they enter office. 

Scrambling to avoid an international bailout, Bratusek’s government last year drew up a list of 15 companies to be sold off by 2016. However, so far just two - specialty paints firm Helios and laser manufacturer Fotana - have been sold. The privatisations of the country's largest companies, including Telekom Slovenije, Ljubljana airport and Slovenia’s second largest bank Nova KBM, therefore remain up in the air. 

The government-in-waiting is thought likely to slow the process or even halt some sales. The Social Democrats are firmly against privatization, while Cerar has spoken out against the sales of Telekom Slovenije and Aerodrom Ljubljana. It's “possible that, depending on its exact composition, the new coalition will cancel the sale of some" [state owned enterprises], suggests Dhand. "While they may yet reconsider these attitudes once they join the government, so as not to hurt investor confidence, the risk of cancellation is very real given existing political manifestos and an overall social consensus hostile to further sales.”

However, the privatisation programme is unlikely to be abandoned altogether since it is seen as key to restoring economic growth. Slovenia, which adopted the euro in 2007, was once the eurozone’s fastest growing economy. However, the country has been slow to emerge from the recent economic crisis. In 2014, the economy is expected to grow by just 0.8% according to the European Commission, but a lengthy period of political uncertainty and postponement of the privatisation programme could put that growth at risk. 

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