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* For other news from Reuters Eastern Europe Investment Summit, click here
* New PM Cerar had been lukewarm on sale of big state assets
* Now says his government will press on with privatisations
* Cerar says will meet deficit-cutting target too
* Slovenia bond yields hit new low on his comments
By Marja Novak and Zoran Radosavljevic
LJUBLJANA, Oct 1 (Reuters) - Slovenia’s new government will push ahead in coming days with the sale of Telekom Slovenia , Prime Minister Miro Cerar told Reuters on Wednesday, in comments that soothed market fears of backsliding.
Speaking at the Reuters Eastern Europe Investment Summit, Cerar said his government would sell 15 firms slated for privatisation by his predecessor as part of a package of crisis measures to stabilise national finances after Slovenia narrowly avoided a bailout last year.
Cerar has previously been lukewarm on the sale of big state assets, but he and his finance minister have now both said they will pursue privatisation.
Slovenia’s government bond yields hit new euro-era lows after Cerar’s comments, showing stronger investor interest in holding the bonds. Ten-year yields dropped 9 basis points, hitting 2.53 percent. They were 16 bps lower on the day, outperforming most other euro zone sovereigns.
Conceding it would not be easy, Cerar also said his government would strive to meet an EU-agreed target of cutting the budget deficit to 3 percent of GDP next year, from 4.5 percent seen in 2014.
“This (cutting the deficit) remains the government’s goal but it will be very demanding ... We will be able to assess in the coming weeks how realistic it is,” Cerar said in his first foreign media interview since his centre-left coalition cabinet took office two weeks ago.
The euro zone member country last year narrowly avoided an international bailout for its debt-laden banks by pumping in 3.3 billion euros and embarking on a sale of state assets that investors see as central to stabilising its finances.
In remarks likely to please investors, Cerar confirmed the government had ditched the idea of splitting Telekom - the most valuable of the 15 firms - into separate infrastructure and services units and keeping the former in state hands.
Analysts said the idea would have put off investors and effectively killed the Telekom sale, expected to bring in at least 700 million euros for the state’s 72.75 percent stake.
“The privatisation of the 15 firms, including Telekom, has to continue until it is finalised ... as we cannot afford to lose credibility,” Cerar said.
Cerar said that, over the next few months, the cabinet would draft a list of companies to sell beyond the 15 the previous government slated for privatisation last year.
“The proceeds of the privatisation will be used to boost the economy and consolidate public finances, which is why the process is very important, but we need to have clear criteria and know what we are selling, why and to whom,” he said.
Since gaining independence in 1991, Slovenia has shied away from selling major companies, banks and insurers, leaving the state in control of about half the economy.
The government expects economic growth of some 2 percent this year, boosted by higher exports and bigger investment, after two consecutive years of recession.
Cerar has pledged to cut red tape, attract more domestic and foreign investors, reduce the grey economy and improve tax collection. But he admitted Slovenia had much work to do.
“Unless we do our task very carefully and meticulously, seek the best solutions and cooperate at the government level, as well as with parliament, the Bank of Slovenia, banks and other institutions then we can find ourselves again on the edge of a situation in which we were (last year).”
Slovenia held a second consecutive snap election in July after the previous centre-left prime minister, Alenka Bratusek, resigned having lost the leadership of her party.
Cerar said his ruling coalition, which has 52 seats in the 90-seat parliament, had already brought political stability that would also help the economic recovery.
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For more summit stories, see Reporting by Marja Novak; Editing by Zoran Radosavljevic, Matt Robinson and Ruth Pitchford