An official denial is in: Slovenia Rules Out Bailout. Here is my interpretation: “A bailout is already in the works, only the date of the announcement is uncertain”.

Slovenia insisted on Tuesday that it could avoid an international bailout as the Organisation for Economic Co-operation and Development warned Ljubljana to tackle more rapidly a “severe banking crisis” whose costs it might have underestimated.

The OECD report came amid investor concerns that the 2m-strong country’s banking problems could make it the next eurozone state to require a bailout after last month’s mishandled rescue of Cyprus.

The OECD said Slovenia should sell viable state-owned banks and allow others that were not viable to fail. It added that bank debtholders should take some losses to reduce the cost of banking sector resolution, and warned that Slovenia might have “significantly” underestimated the level of bad loans and need for new capital.

But Yves Leterme, OECD deputy director-general, said while presenting the report that Slovenia was in no immediate need of rescue, noting that “the government … has been able to meet its financial needs without difficulties so far”.

Speaking in Brussels, Slovenia’s Alenka Bratusek, the newly-installed prime minister, said the country did not require an international rescue to shore up the teetering banking system.

“We will solve our problems on our own,” she said, after a meeting with José Manuel Barroso, European Commission president.

Slovenia On Its Own

Slovenia will solve its problems on its own just like Ireland did, just like Greece did, just like Portugal did, just like Spain did, just like Cyprus did: Under duress, with threats of eurozone expulsion if the nannycrats in Brussels are not pleased.

Mike “Mish” Shedlock