Janez Šušteršič, Meet Reality

Reality seems to have caught up quite fast with finance minister Janez Šušteršič. The man who headed the government macroeconomic office (the aptly named IMAD) during the first Janša administration and refused to pick up the pieces after Jože P. Damijan, the would-be wonder boy of Janša 1.0 jumped ship after only 91 days in office, was forced to fork out EUR 381 million to recapitalise Slovenia‘s largest bank, the state-owned NLB.

Janez Šušteršič and NLB (source & source)

Well, to be honest, the state directly recapitalised the bank with EUR 320 million, while the remainder was coughed up by para-state funds KAD and SOD which is almost the same as if the state gave the money, only it looks better on the balace sheet. KAD and SOD entered the clusterfuck that is the NLB at the eleventh hour, after Belgian KBC bank refused to partake in the operation (after initially agreeing to the deal) and has thus seen its share in NLB shrink from 25 to 22 percent. The funny thing is that only months Šušteršič claimed that not a single euro from the budget will be used to recapitalise NLB. Which means the realisation that no-one will touch NLB with a ten-foot-pole must have come as a rude shock to our austerity-oriented finance minister.

In fact, given the ferocity with which Šušteršič and the rest of the sell-them-all-market-will-know-its-own gang were championing the “market approach” means that what we have witnessed vis-a-vis the NLB was nothing less than an about-face of epic proportions. In other countries, ministers get heavy flak for much less.

OK, fact of the matter is that NLB at this time is about as attractive as three-day-old road-kill and Šušteršič was basically looking down the barrel of a gun, faced with either pumping cash into NLB or hanging it dry. And we’ve seen what letting a bank go bust does, right? But there’s more: Not only did NLB need 380+ million of Tier 1 capital, it also has about three billion of bad loans on its books. And while Šušteršič maintains that most of these loans can and will be repaid, that is more or less eyewash. The bank will never see this money returned, because there is no way for companies who took out these loans (by far and large during the first Janša tenure, when the government encouraged expansionary economic policies) to return them. They don’t have anything to return them with. No competitiveness, no markets, no income, no way to pay the labour force, not even state contracts to offset the above and – finally – no earnings to finance their erstwhile debts.

So, yes, NLB will probably have to suck up losses of about three billion euro. Or about 8,5 percent of entire Slovenian GDP. That’s a lot. And that’s just the biggest bank. Other banks have bad loans on their books as well. Thus the finance minsiter and his boss, the prime minister can assure the country and the world, until they’re blue in the face, that Slovenia will not ask for a bailout of its banks. But the reality is that there will be a call made to Brussels sooner rather than later.

And if the U-turn on NLB recapitalisation wasn’t reason enough, the moment this country asks for a bailout will also be the moment when finance minister Janez Šušteršič will have to ask himself whether he’s fit to continue in this government. In other words: a request for a bailout should be accompanied by a letter of resignation.

The reason for this is painfully simple. Šušteršič positions on the issue, indeed his entire economic platform was about removing the state as a majority owner in key companies. This plan fell apart on the first rock it hit. Yes, NLB needed to be recapitalised and yes, the state is not necessarily a bad owner (although NLB was mismanaged time and again by politically appointed management). Having a the biggest bank in the system limp forward is preferable to letting it sink. But Šušteršič’s political positions which won him the mandate as an elected official, are in direct and blatant opposition with his actions. The two can hardly be reconciled which means that Sloveinan finance minister has a huge credibility problem. And a finance minister with a credibility problem is not something to be looked kindly upon. Just ask Franci Križanič.

But Šuštešič’s biggest problem is not his (lack of) credibility, but the fact that he is, unbeknownst to him, probably earmarked as the fall guy if things go badly wrong. This, at least, would appear to be case since Positive Slovenia announced it will start interpelation proceedings against the finance minister. Technically, an interpelation does not have to end with a vote on minister’s dismissal (although it often does). Instead, it is an instrument of ministerial accountability per se, forcing the minister to explain and defend his or her action.

Now, PM Janez Janša already called starting interpelation this early in the term “nonsense” and at least technically backed Šušteršič up (again, a lovely case of double standards as his party filed an interpelation against Katarina Kresal less then three months after she took office in 2009). But since DL and SDS found themselves on opposite sides on quite a number of issues in the past few days (mostly stemming from the “red star issue”) Šušteršič can be sure that he’ll be made to pick up at least part of the tab.

It seems that the finance minister started this term knowing what his priorities are and falsely assumed that these are other people’s priorities as well (we’ll neglect that these priorities are dubious at best). When challenged about past economic policies of coalition parties in a recent interview with Mladina weekly, Šušteršič answered that he doesn’t care about who did what in the past but is rather interested in what this government will do. And this is the gist of it.

Šušteršič naively assumes that somehow it’ll be different this time around. He really should know better than that. The prime minister is the same. Most of the coalition parties are the same. Most of the key players are the same. Even the problems are the same. How then could results be any different? Remember: I’m not saying that either state or private ownership are inherently bad or good. But the speed at which stated goals of this government and its financial minister have disappeared into thin air is somewhat breathtaking.


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Lunatics Have Taken Over The Asylum

Once upon a time in a land far away
lived a monster, who one day woke up
and screamed: Where the fuck am I living!?
(adapted from a jingle by Radio Študent)

Interior minister Gorenak (source, author unknown)

More Google translate, this time a post by the minister of the interior Vinko Gorenak (SDS) who despite last week’s ruling by the European Court on Human Rights continues to deny that the Erased in fact exist, calling them “so called erased” and maintains that most of the 25.000 are just trying to cash in on the situation and that those few who have indeed been wronged should have their rights restored based on case-by-case evaluation. He also says that this restitution would include material compensation. Which is weird, since the position of his party has long been that the Erased are not entitled to any sort of compensation and in 2009 SDS even put forward a constitutional amendment to that effect. I guess he didn’t get the memo.

However, bad grammar aside, he apparently was in the loop when the latest talking points were being distributed. As of a couple of days ago, the line that SDS and (presumably) NSi are taking is that the only problem in town are compensation claims and that the whole thing is to be blamed on the political left wing. Translation: because Gorenak’s predecessor Katarina Kresal went about fixing what (among others) the Slovenian constitutional court told the state to fix long ago, it is now the left wing’s fault that state will have to fork out some money.

Further to that point, Gorenak repeats what his party boss Janez Janša said days ago, namely that despite the finality of the verdict the state doesn’t have enough money to cover its basic needs, let alone compensate “people who were sitting on the fence, while those who might have been wronged should be looked at individually, all the while keeping in mind the state’s financial situation“. Meaning that after everything else is paid for, the victims of the single largest violation of human rights in the history of democratic Slovenia will get what’s left. After having been screened for “traitors, malingerers and speculators”, of course. In other words, minister of the interior, whose portfolio since recently also includes state prosecution, publicly stated he just doesn’t give a fuck about a ruling of the European court of human rights. And nothing happens. Really, where the fuck am I living?!

Obviously, this perverted attitude towards democracy, human rights and the rule of law does not end there. As the state just reduced pension benefits granted mostly to retired WWII war veterans, policemen, judges and so on, and some 25,000 people (funny, how numbers keep repeating) saw their pension reduced by as much as 20% it is probably only a matter of days until some bright soul in the government spins this as if the Erased are to blame. As in: “no wonder we have to reduce pensions as we have to pay huge compensations to people who sympathised with the occupator, and you can thank the left wing and Katarina Kresal for it.

So, let’s get the story straight (again). When the erasure happened (26 February 1992) the government was run by PM Lojze Peterle (Christian Democrats). His government was comprised of every single political party from both sides of the spectrum save the liberal ZSMS which was later renamed in transformed into LDS (and then split into Zares and LDS). And while Igor Bavčar, lately of Istrabenz fame and Janez Janša’s war buddy was indeed the interior minister at the time of the erasure, he was nowhere near being a member of LDS. Back then he was a member of Democratic party, one of two parties created after SDZ (one of the first parties in Slovenia) broke up. No LDS, no Milan Kučan, no Janez Drnovšek and certainly no Katarina Kresal. This is not about whether the left or the right wing is to blame. The Republic of Slovenia is to blame.

When Janez Janša, Vinko Gorenak and the rest of the current administration came to power six months ago swore to “uphold the constitutional order, act according to my conscience and that I shall do all in my power for the good of Slovenia“.

If this the above is how Gorenak et al. perceive constitutional order, the good of this country and if that is what their conscience dictates, then the lunatics have truly taken over the asylum.

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