BERLIN (Reuters) - The European Central Bank is interested in Slovenia applying for aid from the European Stability Mechanism (ESM), the euro zone’s bailout mechanism, German business daily Handelsblatt cited unnamed sources in Brussels as saying on Wednesday.
Slovenia has been in recession since last year and is struggling to avoid an economic bailout. On Friday Slovenian officials said they would liquidate two small banks to ensure the financial stability of its banking system.
The ECB declined to comment on the Handelsblatt report, which gave no further details on how any ECB interest in Slovenia applying for help had been expressed, or what it consisted of.
In a brief extract of an article due to be published on Thursday, the newspaper also said the holes in Slovenian banks’ balance sheets would be discussed at a meeting of the Eurogroup of euro zone finance ministers in Vilnius on Friday.
Local banks struggling with 7.5 billion euros ($9.98 billion) of bad loans, worth more than a fifth of national output, have fuelled speculation that Slovenia may seek a bailout in the coming months.
Eurogroup head Jeroen Dijsselbloem has asked the Slovenian finance minister to report on the situation of the banks, the newspaper cited unnamed euro zone sources as saying.
It added that this was due to the government’s announcement last week that it would close Factor Banka and Probanka banks.
($1 = 0.7518 euros)
Reporting by Michelle Martin, and Paul Carrell in Frankfurt; Editing by Alison Williams