On January 12, 2012, Standard and Poor’s downgraded the credit rating of nine eurozone nations. Slovenia was one of them. S&P downgraded the Eastern European nation to A+. Slovenia adopted the euro in 2007. The nation’s public debt has increased from 38.8% of GDP in 2010 to an expected 50.1% of GDP in 2012. At the same time, the public deficit as it pertains to GDP has remained constant.
Slovenia’s economy is heavily dependent on exports. Germany is currently Slovenia’s largest market for exports. Slovenia’s largest firms include Krka and Gorenje. Krka is a pharmaceuticals and cosmetics producer that sold EUR 768.2 million euros from January through September 2011. Gorenje manufactures sleekly designed home appliances that would please any modern design asthetic.
The Balkan nation has cited the ratings cut as excessive on Standard and Poor’s part. S&P deemed a recent EU summit as unproductive and blamed no breakthroughs as the reason for the downgrade. Moody’s lowered its rating of Slovenia’s creditworthiness in December to A1, citing a risk that government finances might be needed to bail out the banking sector.
Slovenia has been without an official government since September. Borut Pahor lost the position of prime minister in a no-confidence vote. Zoran Jankovic was elected in December, but failed to draw enough support to be approved as Pahor’s successor by legislators. Also, a new fiscal pact will require Slovenia to cut public spending. The pact is being strongly forced by both Germany and France. The Balkan state faces rising debt along with an absence of leadership. However, considering the current economic climate, Slovenia appears, by the numbers at least, to be holding up to the turbulence quite well in relation to other European nations.
Even without a clear leader, Slovenia is making changes to ease the economic strains on the
