Slovenia Struggles To Avoid EU Bailout

Primož Kozmus is a Slovenian national hero lionised for tossing a hammer to double Olympic gold. Soon he might be forced to honour his Alpine homeland another way: sacrificing his personal fortune to help avert a eurozone bailout, the Financial Times reported. Slovenia’s banks are in such a dire state that Mr Kozmus is almost certain to face a so-called haircut, which will slice through the more than €100,000 of junior bank bonds he bought during Slovenia’s heady credit boom. “The money was safe and then they changed the rules,” said Mr Kozmus. “I’m an athlete, I represent Slovenia well in the world, I believed in my country. If this is my donation to Slovenia, if it helps, OK. But I’m not sure it will help them.” He may be right. Junior creditors stand to lose about €500m. But tiny Slovenia – a tranquil, prosperous nation of 2m hemmed between the Alps and the Adriatic Sea – will need to plug a banking hole several times bigger to avoid becoming the next eurozone country to seek an international bailout. Over the coming months this place of hilltop castles and handsome Habsburg architecture will become the laboratory for the latest eurozone experiment in debt restructuring – one that will be heavily influenced by Germany’s deep political resistance to underwriting another rescue. The question is whether a blown-out eurozone economy can fix itself without foreign funds for the repairs. Read more. (Subscription required.)