The European Commission (EC) has urged Slovenia to set specific targets for bringing down non-performing loans (NPLs) and to adopt a strategy for the operation of state holding company SDH, which is in charge of the privatisation processes in the country.
The bad loans in Slovenia's banking system, which required a government bail-out in late 2013, totalled 4.44 billion euro ($5.1 billion) at the end of February, up from 4.38 billion euro at the end of January. The share of loans whose repayment has been delayed by 90 days or more edged up to 11.8% at the end of February from 11.6% at the end of January.
The Commission said in a statement on Wednesday the restructuring of Slovenia's five major state-owned banks and the wind-down of two smaller domestic banks are on track.
Slovenia should adopt a strategy for the Slovenian Sovereign Holding with a clear classification of assets, implement an annual asset management plan and apply performance criteria, the Commission said.
Slovenia should also ensure a durable correction of the excessive deficit in 2015, and achieve a fiscal adjustment of 0.6% of gross domestic product (GDP) towards the medium-term objective in 2016, advance a long-term reform of the pension system and adopt by end of 2015 a healthcare and long-term care reform, among others.