• It has come to our attention that some users may have been "banned" when they tried to change their passwords after the site was hacked due to a glitch in the old vBulletin software. This would have occurred around the end of February and does not apply after the site was converted to Xenforo. If you believe you were affected by this, please contact a staff member or use the Contact us link at the bottom of any forum page.

Is Slovenia now on the brink?


Shqiptar

Well-known member
Joined
Mar 18, 2012
Messages
6,309
Cyprus gave us the C for SICPIG. Slovenia might let us turn the acronym into a plural.

In the last few days, as a result of the hamfisted Cypriot bailout/in/whatever, the Adriatic country has seen its borrowing costs soar to unsustainable levels. See the graph below, the 10Ys are up by 250 basis points and are now - being just below those of bailed out Portugal - at an unsustainable level.



There's no doubt that the Cypriot bailout is a game changer. I expected the next big mini-crisis would be brought about by an Italian downgrade as a result of that country being paralysed by the inability to form a government. I didn't expect it to be caused by the head honchos in Frankfurt and Brussels.

See the killer line at the end of the Guardian article?

After Slovenia, who's next? The research house Capital Economics has its money on Malta and Luxembourg.
Sources:
1. When Is A "Unique Template" Bailout Not A Bailout? When It's In Slovenia | Zero Hedge
2. Slovenia could be next candidate for eurozone bailout | World news | guardian.co.uk
3. Investors afraid Slovenia will be next for bailout - CBS News
4. Heavy-handed Cyprus bailout puts pressure on Slovenia | EurActiv
5. Slovenia Government Bonds | Slovenia Government Bonds Yields
 

Ribeye

Well-known member
Joined
Jul 12, 2011
Messages
26,306
What a load of rubbish, sure only yesterday a Slovenian govt spokesman said that they wouldn't need a bailout,

And that's good enough for me,
 

devoutcapitalist

Well-known member
Joined
Feb 26, 2013
Messages
16,607
What a load of rubbish, sure only yesterday a Slovenian govt spokesman said that they wouldn't need a bailout,

And that's good enough for me,
it was good enough for me also in november 2010 when dermot ahern and noel dempsey were denying that ireland didn't need a bailout...lol, oh wait a minute. As for slovenia let the fun and games begin.
 

sic transit

Well-known member
Joined
Jan 30, 2008
Messages
25,583
Isn't this just a set of links from people looking to bet big on yet another EU country? All sorts of wobbles this week and a bit of sulking by Moodys. All coulds and maybes at present and generating new Google content.
 

Clanrickard

Well-known member
Joined
Apr 25, 2008
Messages
33,045
it was good enough for me also in november 2010 when dermot ahern and noel dempsey were denying that ireland didn't need a bailout...lol, oh wait a minute. As for slovenia let the fun and games begin.
Not much fun if you are Slovenian
 

sic transit

Well-known member
Joined
Jan 30, 2008
Messages
25,583
They have a budget deficit of 4.4%

Slovenia Government Budget

They have to borrow 1.5 billion euro to make ends meet. And interest rates for them are going to 5%. Meaning cost of borrowing is 75 million a year, per year.

Each 1% increase in rates adds 15 million euro.

I think they'll manage.
Indeed. This is what a "little learning" gets us.
 

Shqiptar

Well-known member
Joined
Mar 18, 2012
Messages
6,309
They have a budget deficit of 4.4%

Slovenia Government Budget

They have to borrow 1.5 billion euro to make ends meet. And interest rates for them are going to 5%. Meaning cost of borrowing is 75 million a year, per year.

Each 1% increase in rates adds 15 million euro.

I think they'll manage.
Where are you getting that figure from? They have bonds of 2 billion maturing in the middle of this year.
 

Shqiptar

Well-known member
Joined
Mar 18, 2012
Messages
6,309
it was good enough for me also in november 2010 when dermot ahern and noel dempsey were denying that ireland didn't need a bailout...lol, oh wait a minute. As for slovenia let the fun and games begin.
I think Ribeye was being ironic but I could be wrong. :cool:
 

Analyzer

Well-known member
Joined
Feb 14, 2011
Messages
46,201
I bet they even have pillar banks.
 

seabhcan

Well-known member
Joined
Sep 3, 2007
Messages
14,327
Where are you getting that figure from? They have bonds of 2 billion maturing in the middle of this year.
1.5 billion is their budget deficit.

2 billion additional borrowing will cost them 100 million. But not additionally, as they are paying something in interest on this money already - probably 4%. So when they roll it over at 5%, it will cost them an extra 20 million a year.

Not the end of the world. I think they'll be fine.
 

Shpake

Well-known member
Joined
Oct 17, 2012
Messages
5,374
Is Estonia in the Euro? They could fulfill a valuable role in the field of image management and public relations. If they were to go bust then we would be the PIGGIES. sounds so much nicer. No that won't work. we need an extra G... gibralter? ghana? :)
 

Shqiptar

Well-known member
Joined
Mar 18, 2012
Messages
6,309
1.5 billion is their budget deficit.

2 billion additional borrowing will cost them 100 million. But not additionally, as they are paying something in interest on this money already - probably 4%. So when they roll it over at 5%, it will cost them an extra 20 million a year.

Not the end of the world. I think they'll be fine.

According to the IMF, Slovenia will need $3.6 billion in funding this year and its banks will need another $1.2 billion.
Investors afraid Slovenia will be next for bailout - CBS News
 

publicrealm

Well-known member
Joined
Aug 11, 2007
Messages
6,035
Is Estonia in the Euro? They could fulfill a valuable role in the field of image management and public relations. If they were to go bust then we would be the PIGGIES. sounds so much nicer. No that won't work. we need an extra G... gibralter? ghana? :)

And we are the little piggy that went to the market - who gets to go wee wee wee? Is France in the frame?
 

sic transit

Well-known member
Joined
Jan 30, 2008
Messages
25,583
Investors are afraid all the time and this is just conjecture for now. As with our own massive 14% for 10 year bonds, it's a fairly irrelevant value until you try to issue them.
 

Shqiptar

Well-known member
Joined
Mar 18, 2012
Messages
6,309
1.5 billion is their budget deficit.

2 billion additional borrowing will cost them 100 million. But not additionally, as they are paying something in interest on this money already - probably 4%. So when they roll it over at 5%, it will cost them an extra 20 million a year.

Not the end of the world. I think they'll be fine.
Where's the 5% rollover figure coming from? Note that yield curve inversion has already occurred for Slovenia. 2 year and 5 year yields are greater than 10Ys.

Sustainable debt is not defined by figures-looking-kinda-small. It's whether growth in the economy can keep the debt/GDP ratio in hand. The Slovene economy is set to shrink by 2% this year.
 
Top