Slovenian govt unsurprised by Moody's downgrade

(LJUBLJANA) - Slovenia's newly appointed government reacted without surprise Tuesday to a downgrade of its credit rating by Moody's, saying it was preparing measures to prevent further such moves.

"More (agencies) might downgrade our rating, but our task is to prepare a budget revision as soon as possible, cut spending and balance our public finances," Economy Minister Radovan Zerjav said after Moody's downgraded Slovenia's debt rating by one notch to A2.

"We have already launched the necessary measures that will lead to improving our rating," he added.

Moody's on Monday chopped the debt ratings of nine EU countries, including Italy, Spain, Portugal and Slovenia, casting doubt over whether Europe's leaders were doing enough to reverse the downslide of the region's economy and financial sector.

The downgrade comes just after Slovenia's parliament appointed Friday a new centre-right government that said its first priority would be to prepare a revised budget that would cut spending to fall in line with income.

On Monday, incoming Prime Minister Janez Jansa already predicted: "We can expect over the next weeks more downgrades of our rating."

Once an economic frontrunner among the countries that joined the European Union in 2004, small Slovenia has seen interest rates on its debt soar and the export-dependent economy is close to recession.

The national debt, although low by eurozone standards, has also grown sharply in recent years.