In the wake of the Cyprus bailout in March, commentators began to cast their nets to find a likely candidate for the sixth EU country to need rescuing. Many selected Slovenia, a small country with a predominantly state-owned banking sector showing heavy losses from poor-quality loans and requiring recapitalisation.
Bad news followed in April with the decision of Moody’s to downgrade Slovenia’s sovereign rating two notches to junk status, citing the state of Slovenia’s banking system as a key factor in its decision. In May, the Organisation for Economic Co-operation and Development revised its 2013 growth forecast for Slovenia downwards to -2.3%, the same as in 2012.
