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Without attracting much wider attention, Slovenia has spent the last six months struggling to avoid following Cyprus into a Eurozone bailout. In particular, Ljubljana has been fighting a rear-guard action with its chronically damaged banking system. The numbers – including downgraded growth forecasts this week - increasingly suggest this is a fight it will struggle to win. A bailout would be a political and policy setback for Ljubljana, but would it have any wider consequences for the Eurozone? Slovenia may be an extreme example, but it is a reminder that the legacy problem of weak banks is still lingering under the first signs of good economic news for the Eurozone.
The views expressed in this report can be attributed to the named author(s) only.