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UPDATE 2-Second party to quit crumbling Slovenia government

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(Globalpost/GlobalPost)

* Pensioners' party Desus to quit on Feb. 22

* Slovenia seen ratifying Croatian EU treaty by then (Updates, adds opposition quote)

By Marja Novak

LJUBLJANA, Feb 5 (Reuters) - A second junior partner in Slovenia's minority government is to resign this month over a corruption scandal involving Prime Minister Janez Jansa, bringing the EU member state closer to a change of government or early election.

The political turmoil is the last thing the small southeast European country needs as it struggles to avoid becoming the latest euro zone government to seek an international bailout.

Jansa's conservative alliance lost its majority in parliament last month when the Civic List and its two cabinet ministers quit. The pensioners' party Desus said on Tuesday it would follow suit and leave the coalition on Feb. 22.

"The exit of Desus would clearly make it that much more difficult for Jansa to remain in office," Timothy Ash, an analyst at Standard Bank, told Reuters.

Karl Erjavec, the foreign minister as well as head of Desus, said after a party board meeting that it was already in talks with the opposition on nominating a new prime minister.

Desus also holds the health portfolio and both ministers will resign on Feb. 22.

Erjavec said he hoped that parliament would by then ratify Croatia's European Union accession treaty, allowing its neighbour and former fellow Yugoslav republic to join the EU on July 1 as planned.

Ratification has been on hold due to a dispute with Croatia over debt related to a Slovenian bank that closed in 1991, when the two countries declared independence from Yugoslavia. Talks on finding a solution could be completed next week.

"I fear that if the treaty is not ratified by then (Feb. 22) it will be very hard to ratify it in time (for Croatia to join the EU on July 1)," said Erjavec, who is to meet Croatian counterpart Vesna Pusic for talks on the matter on Wednesday.

The treaty needs the support of at least two-thirds of Slovenian members of parliament.

Alenka Bratusek, heading the talks on a possible new government for the main opposition centre-left Positive Slovenia party, said that the parties could reach a deal on a new prime minister within the next two months.

"I am sure a majority (of parties) can agree on five to 10 projects that would stabilise Slovenia," Bratusek said in remarks carried by the daily Delo on Tuesday.

Erjavec said his talks with the opposition showed that parties could agree on a new premier and at the same time decide to hold the next election in 2014 rather than at the scheduled time in 2015.

In January the anti-corruption commission said Jansa was unable to explain the origin of some of his income over the past years, after which three junior coalition parties demanded his resignation. He has denied any wrongdoing and pledged to continue to lead the minority government.

Slovenia was hard hit by the global financial crisis due to its dependency on exports and fell into a new recession in 2012 amid lower export demand and a fall in domestic spending caused by budget cuts.

The country, also burdened by a rising amount of bad loans in local banks, managed in October to issue its first sovereign bond in 19 months, averting a bailout at least until June. (Reporting By Marja Novak; Editing by Zoran Radosavljevic and Mark Heinrich)

http://www.globalpost.com/dispatch/news/thomson-reuters/130205/update-1-second-party-quit-crumbling-slovenia-government