Slovenia votes for new government amid deepening economic crisis

Slovenia's centre-left Prime Minister Borut Pahor looks likely to become the latest eurozone leader to lose his job over the debt crisis. Polls are predicting a victory for former premier Janez Jansa of the centre-right Slovenian Democratic Party (SDS) in Sunday’s vote. 

Reuters/Srdjan Zivulovic

Jansa has promised spending cuts and painful reforms to avoid another recession. He has also said he would raise the retirement age, one of Europe's lowest.

The most recent opinion poll conducted by Ninamedia gave the SDS 28.5 per cent, with
Positive Slovenia, a new centre-left party founded by Ljubljana's popular millionaire mayor Zoran Jankovic, with 24.6 per cent while Pahor's Social Democrats were seen in third place with only 14.3 per cent.

Pahor's government lost a confidence vote in September after major reforms to the pension system were rejected in a referendum, prompting early elections after just two years in office.

If he wins, Jansa, will come to power under dramatically different circumstances from his first term from 2004 to 2008 when Slovenia enjoyed stellar growth, unemployment under seven per cent and solid public finances.

The global financial has crisis savaged the export-oriented economy - output slumped by 8.1 per cent in 2009. Growth figures published on Wednesday showed Slovenia perilously close to recession, with output shrinking 0.2 per cent in the third quarter after stagnating in the second and contracting 0.1 per cent in the first.

Unemployment hit 11.5 per cent in September, and the central bank has warned it may have to cut its growth forecast for 2012 again from the current projection of 1.3 per cent.

The outgoing government forecast a budget deficit of 5.5 per cent of output this year.

The debt crisis in the 17-nation eurozone has already led to a change in government in a string of countries, including Portugal, Greece, Italy and most recently in Spain.