Slovenia's PM designate confident of coalition next week

Slovenia's prime minister designate Alenka Bratusek said Thursday she expected to form a new coalition by next week, as she faced the tricky task of lifting the troubled country out of a searing economic and political crisis.

The 42-year-old political newcomer was given the mandate to form a new government late Wednesday after a no-confidence vote ousted Premier Janez Jansa, under fire for weeks over corruption claims that ignited mass nationwide protests.

A first meeting with potential partners Thursday showed an agreement to form a new government could be reached "by the end of next week," Bratusek told journalists.

"We all are aware, and I mean all, that we will have to take a step back and seek a compromise. I believe we will be able to find such compromises," she added.

The meeting at the headquarters of Bratusek's Positive Slovenia (PS) party included the pensioners' party DESUS and the Civil List (DL), both former centre-right coalition partners of Jansa, as well as the centre-left Social Democrats (SD).

The PS leader needs to get her new cabinet approved by parliament within two weeks or risk President Borut Pahor calling early elections for the second time in less than two years.

Meanwhile, Slovenia is also battling serious economic troubles, with its economy in recession, unemployment high and the poor state of its banks threatening to require a bailout.

Once a model EU and eurozone member with annual growth at around five percent between 2004 and 2007, the small country saw output contract by 1.0 percent in the fourth quarter of 2012, compared to 0.6 percent in the third, according to new figures released Thursday.

Domestic consumption was "particularly weak," imports were down and crucial exports remained flat, the statistics office said, noting that: "External demand thus remains the only element that prevents an even greater reduction in the economic activity."

Following her swearing-in Wednesday, Bratusek already said her top priorities would be "normalising" life by softening "excessive" austerity measures imposed by the outgoing government and stimulating growth.

"We have to boost economic development," the former finance ministry official told lawmakers, announcing plans for a revised budget shortly after taking over, as well as wage cuts and a temporary increase in taxes.

Columnist Janez Markes from the daily Delo praised Bratusek's "brilliant" speech, which surprised by addressing the people's main fears with sincerity and good intentions.

"She called for tensions to calm down and for some optimism to be given to citizens so that they can relax and prepare to solve the situation," Markes said in a video comment published on the newspaper's website.

Tens of thousands have taken to the streets in the past few months, protesting what they see as a corrupt elite and demanding the resignation of leading politicians, including Jansa.

But Bratusek still has her work cut out for her.

"Now we have to watch the way she will face the real problems such as the banks and see whether her good rhetoric will be accompanied by a philosophy of transparent books," said Markes.

Analysts have warned her biggest obstacle to forming a new coalition might be the Civil List, which already baulked at a partnership with PS after the last snap elections in December 2011.

The issue might especially revolve around Slovenia's beleaguered banks: DL has proposed the creation of a "bad bank" to take the banks' bad loans, while the Social Democrats insist on fresh capital hikes by the state.

"It remains to be seen what the compromise over the bad bank will be and whether this government will have only a limited life," daily Dnevnik's columnist Primoz Cirman commented Thursday.

DL leader Gregor Virant, who had earlier insisted there was "no guarantee" his party would join a coalition led by Bratusek, remained non-committal on Thursday.

"If all sides show enough reason and readiness to make compromises and if we have in mind our state and its wealth, then we can reach an agreement and find some good compromise solutions," he said.