In Brief
Slovenia scraps plans to sell bonds this year Slovenia has scrapped plans to sell more benchmark bonds this year as the economy’s return to growth reduces the need to raise money on international markets, Finance Minister Franc Krizanic said. The government planned to borrow as much as 4.39 billion euros ($5.6 billion) abroad this year, compared with 4 billion in 2009. It sold 1.5 billion euros of 10-year bonds in January and 1 billion euros of five-year securities in March, according to data compiled by Bloomberg. Proceeds from the bond sales helped to strengthen Slovenia’s financial system and spur lending after the global credit crunch. Krizanic said in May that Slovenia, the first ex-communist state to adopt the euro, was considering selling bonds or getting a loan to finance its portion of the European Union-led aid package for Greece. «We don’t plan any more bond sales this year since we have enough funds deposited in banks,» Krizanic said on Tuesday in a phone interview in Ljubljana, the capital. «The next installment of aid for Greece will be taken from funds already deposited in banks from previous debt sales.» Slovenia’s export-dependent economy expanded for the first time in six quarters in the April-June period, growing 2.2 percent from a year earlier as European demand for its goods increased. «The result was expected, as industrial production data pointed to quick growth and obviously the investment cycle has returned,» Krizanic said. «The third-quarter result will also be good, as growth will continue.» (Bloomberg) Conergy wins contract to build solar power stations Conergy AG, a German maker of solar panels, said it won a contract to build 20 power stations in Greece with a local investor. The projects will range from 1 megawatt to 4 MW and all 20 will be completed within 18 months from the start of construction, the company said in an e-mailed statement yesterday. Conergy will begin work in the second quarter next year with the unidentified partner. Greece aims to generate 18 percent of its energy consumption via solar power equipment by 2020, Conergy said. Operators of solar arrays in Greece earn as much as 50 euro cents ($0.64) per kilowatt-hour, more than the top rate in Germany, the world’s largest market. The total installed capacity of the projects will be 32 megawatts, or enough to provide power for more than 4,000 homes. Conergy rose as much as 3.8 percent to 65 cents and traded at 64 cents as of 11.18 a.m. local time, valuing the company at about 254 million euros. (Bloomberg) Debt fear Investors have overestimated the risk of default in debt-burdened advanced economies, the International Monetary Fund said late on Wednesday. Repairing public finances is a daunting task that will pressure global economic growth, but countries have successfully adjusted before and they can do it again, the IMF said in a set of policy papers focusing on the fiscal condition of major developed economies. «Although the fiscal fundamentals look challenging, current market indicators of default risk seem to reflect some market overreaction,» the IMF said. Over the past three decades, there were 14 instances in which advanced economies managed deficit reductions of the magnitude that will soon be needed in most rich countries. «Admittedly, this will be the first time that most advanced economies have to adjust simultaneously by such large amounts, implying a nontrivial drag on economic growth,» it said. «Judging from past experience, such a major adjustment will no doubt be difficult, but is possible.» Investors have driven up the price of insuring against a debt default in several European countries. Greece, Spain and Portugal have also seen their borrowing costs jump due to concerns about debt sustainability. The IMF offered a rebuttal of some of the most commonly raised arguments that a default or restructuring is inevitable, particularly in severely indebted countries such as Greece. (Reuters) Inflation pickup Cyprus’s consumer price inflation was running at 3.2 percent year on year in August from a July reading of 2.6 percent, the country’s statistics service said yesterday. (Reuters)
