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INTERVIEW-Slovenia opposition says early election unlikely

Published 06/09/2009, 11:31 AM
Updated 06/09/2009, 11:58 AM

* Government weak but early election unlikely-opposition

* Government must create jobs, boost spending-opposition

By Marja Novak

LJUBLJANA, June 9 (Reuters) - Despite its poor showing in the European election, Slovenia's coalition government is still united enough to stay in office and avoid an early election, the main opposition leader said on Tuesday.

Janez Jansa's centre-right Slovenian Democratic Party (SDS) won 26.9 percent of the vote in the European Parliament ballot, well ahead of the ruling Social Democrats' 18.5 percent.

"The coalition is ideologically homogenous ... which is keeping them together. I do not believe the coalition will fall apart," Jansa told Reuters in an interview.

"Slovenia has bad luck. It has a weak government that is not focused on fighting the (economic) crisis... but is dealing with its own problems instead," Jansa said.

The government should focus on cutting taxes to help create new jobs instead of spending time dealing with its internal problems, he said.

"The situation in Slovenia is similar to that in Great Britain. We have ... a prime minister who lost this (EU) election, which weakened his position," said Jansa, whose SDS narrowly lost a general election in September.

The present four-party centre-left ruling coalition took office in November, and Prime Minister Borut Pahor has already had to grapple with serious internal troubles.

Last week Science Minister Gregor Golobic, who heads the second largest government party, Zares, said he might resign after the media discovered he owned a stake in a local company. He had earlier denied ownership of any firm.

In April, Economy Minister Matej Lahovnik, also of Zares, threatened to quit because state-owned NLB bank rolled over a loan that media said was used for the management buyout of a local company. Lahovnik said the money should have been used to boost the economy instead.

Slovenia formally entered recession on Tuesday, when data showed an 8.5 percent economic contraction in the first quarter, while investments were down 32.3 percent and manufacturing output fell 20.5 percent.

Jansa said the government should cut taxes to enable companies to invest and create new jobs. It should do everything possible to prevent the number of jobless rising above 110,000, he added. Slovenia has a population of two million.

The number of unemployed reached 84,519 in May, 38.2 percent higher than in the same month last year, and the number is likely to rise further.

Jansa said the government should work with the opposition to prepare legislation that would create new jobs rather than just improve welfare terms for the unemployed.

The government should take steps to raise people's spending, for instance by subsidising purchases of new cars and homes, he said. So far the government has offered subsidies to firms that cut labour hours or lay off workers only temporarily. (Reporting by Marja Novak, Editing by Zoran Radosavljevic and Tim Pearce)

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