Slovenian parliament rejects president’s proposal for central bank governor

Slovenian parliament rejects president’s proposal for central bank governor
By bne IntelliNews October 10, 2018

The Slovenian parliament rejected on October 9 the proposal made by President Borut Pahor to appoint Primoz Dolenc as central bank governor.

Dolec has been in charge as acting governor of the central bank, Banka Slovenije, since Bostjan Jazbec left the governor position earlier this year. 

MPs say they want to break from the past with the appointment of the new central bank governor, and are seeking someone who is committed to probing the bailout of state banks during the recent economic crisis. 

Brane Golubović, the head of the senior ruling List of Marjan Sarec’s parliamentary faction, told the Studio City TV show that Banka Slovenije’s “wound” needs to be cleaned, according to a statement on the party’s website. 

"It is necessary to restore confidence in the Bank of Slovenia, and this trust can be obtained if this wound that happened in 2013, 2014, that is, the famous capital increase of the banks, [if] we open it, clean it regardless of the pain,” Golubović said. 

“The Bank of Slovenia, in our opinion, is one that in some way hinders the investigation,” he added, stressing that the bank’s new governor must “sincerely believe that the period between 2013 and 2014, when the banks were rehabilitated, should be investigated.”

In 2013, the Slovenian government poured more than €3bn into banks to prevent them from collapsing due to their bad loans. About €600mn of subordinated bonds of six troubled Slovenian banks were scrapped while about 100,000 shareholders lost their banks' shares.

This remains a highly emotive issue in Slovenia. Jazbec, who announced his resignation in March, reported to police that he had received death threats on his mobile phone, directed at both himself and his children, which he believed were related to the bail-in. As well as stepping down from his position, Jazbec sought police protection.

The former central bank governor also claimed to have received a letter from a member of one of the civil initiatives of holders of extinguished bank shares and bonds, who “threatened that those of us involved in the recovery, should the authorities fail to begin proceedings against us, would ‘be lynched by the people in the next uprising’.” 

Five candidates had submitted applications to succeed Jazbec, but in September Pahor announced Dolec as his proposal for the post.

Dolenc, who needed 46 votes, was backed only by 30 MPs, according to broadcaster RTVSLO.

The outcome of the vote was expected as most parties had already announced they will not support Dolenc to take over the post.

Following the vote, President Pahor announced a new call for proposals for possible candidates. The tender will last for three weeks. Pahor plans to hold discussions on the matter with the parliamentary groups in the National Assembly and nominate a new candidate as soon as possible.