Analysis

Without attracting much wider attention, Slovenia has spent the last six months struggling to avoid following Cyprus into a Eurozone bailout. In particular, Ljubljana has been fighting a rear-guard action with its chronically damaged banking system. The numbers – including downgraded growth forecasts this week - increasingly suggest this is a fight it will struggle to win. A bailout would be a political and policy setback for Ljubljana, but would it have any wider consequences for the Eurozone? Slovenia may be an extreme example, but it is a reminder that the legacy problem of weak banks is still lingering under the first signs of good economic news for the Eurozone.