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Slovenia appoints IMF advisor to head central bank


Slovenia's parliament appointed International Monetary Fund advisor Bostjan Jazbec as the new central bank governor on Tuesday amid speculation the eurozone country could follow Cyprus in needing a bailout.

A total 77 lawmakers voted in favour of Jazbec's appointment, with seven opposing it and two abstaining.

A 43-year-old IMF senior advisor to Kosovo's central bank and associate economy professor at Ljubljana University, Jazbec will take over from Marko Kranjec when his term expires in mid-July.

The mandate of the central bank governor, who is also a member of the European Central Bank's governing body, is for six years.

Jazbec's appointment comes as Slovenia, once a model EU entrant, continues to struggle against recession and problems with its banks, which are mired in bad debt, prompting concerns it might be the next eurozone member to seek a bailout from the EU and IMF.

On Tuesday, outgoing governor Kranjec said Slovenia's economy could return to growth next year.

But he warned this would depend on the newly appointed centre-left government's moves to stabilise the economy.

Under Prime Minister Alenka Bratusek, the new government has promised to continue implementing measures adopted by the previous government -- including pension and labour reforms and a plan to create a so-called bad bank.

Bratusek has said however she will amend the latter bill -- which will create a bank to take bad loans from the country's largest state-owned banks -- to reinforce the central bank's role.