Slovenia mandates new PM to halt dramatic decline

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By Zoran Radosavljevic | February 28, 2013 8:56 AM EST

Slovenia dismissed its conservative-led government on Wednesday and offered a centre-left finance expert the task of halting the Alpine country's fall from post-communist rising star to the euro zone's latest bailout candidate.

The 90-seat parliament voted 55-33 to dismiss Prime Minister Janez Jansa's ruling coalition after just a year of trying to navigate through the ex-Yugoslav republic's worst economic and political crisis in 22 years of independence.

The baton passed to opposition Positive Slovenia leader Alenka Bratusek, who will become Slovenia's first female prime minister if she manages to build a coalition around a platform to stabilise the country's finances and avoid going cap-in-hand to the European Union.

The country of 2 million people has gone from economic trailblazer for the rest of the former Yugoslavia and eastern Europe when it joined the euro zone in 2007 to the latest ailing member of the 17-nation currency bloc.

With unemployment at a 14-year high and the banking sector strangled by 7 billion euros (6 billion pounds) in bad loans, speculation is rife that without urgent reform Slovenia may soon be unable to find affordable financing and repay some 2 billion euros of outstanding debt due in mid-2013.

Addressing parliament before the vote, the 42-year-old Bratusek came out strongly against more austerity, quoting Nobel economics laureate Joseph Stiglitz in likening it to "mediaeval medicine".

"You draw blood and, if the patient does not get better, you draw some more. Our priority is growth and employment, which creates wealth for everyone ... I state clearly - there will be no Greek scenario in Slovenia."

Parliament will probably vote on Bratusek's proposed cabinet in late March.

She has struck a deal with the Social Democrats and two of Jansa's former allies to hand her the reins for 12 months, with an option to keep her at the helm until an election due in 2015.

Spending cuts and allegations of government corruption have fuelled street protests of a kind not seen since Slovenia split from federal Yugoslavia in 1991, avoiding the bloodshed that would tear apart the rest of the region over the next decade.

(Writing by Matt Robinson)

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