The dismissal of international experts from the Board of Directors of the Bank Assets Management Company (BAMC) leaves us with more questions than answers. It has now become clear that the reason for their “decapitation” does not lie in their excessive salaries which serve merely as an excellent cause and smokescreen to cover up greed and outlived instinct of interest groups that have failed to manage the BAMC in the same way they manage politics, state-owned enterprises and mainstream media.

A few months ago former Finance Minister Šušteršič answered the question “Why foreigners?” as follows: “Because I was searching for experts to whom the names such as Jamnik, Isajlović and Zemljarić meant nothing.” Who would not seek “advice” from the aforementioned persons but possess practical experience and good practice regarding the sale of bad assets, which would allow for the highest possible repayment of public resources earmarked for the banking system recovery. The law-makers and the National Assembly, as the legislator, knowingly supported the fact that foreign experts would be paid as much as they would be paid abroad and not as much as determined by Lahovnik's law. Namely, fair remuneration and performance bonus would decrease their “susceptibility” to integrate, by engaging in potential “side” business, into the economic-political elite which is, unfortunately, managed by exactly those who have created such a bank hole. We could argue that this formed the basis of the law, as the banking system recovery in the amount of six billion euros was the largest financial intervention in connection to the public money – taxpayers' money – in the history of Slovenia.

Independence, international references and autonomy of BAMC bodies represent the basis of the Act Defining the Measures of the Republic of Slovenia to Strengthen Bank Stability designed to prevent a moral hazard – which means that debtors and former governing boards of the banks that have been recapitalized with the taxpayers' money can influence the process of solving the bad loans problem and are, in doing so, even rewarded with discounts at the taxpayers' expense. The bank restructuring and the subsequent curbing of the inflow of new bad debts were needed to restore the economic growth. The austerity measures and the bank system recovery were therefore a prerequisite for the economic growth rebound and, consequently, a decrease in risk premium on Slovenian bonds. The ruling economic-political elite heaved a sigh of relief - the troika did not and will not come to Slovenia. Business transactions will resume in a way the elite knows best.   
By enforcing the changes the BAMC is now “open for business”! And what can we expect? Well, probably something similar to what is happening in the process of liquidation of the “Factor banka d.d”, where a prominent member of the ruling economic-political elite, through a chain of companies owned by his relative or acquaintances, is managing the undertaking, who has bought, with the loan granted by the “Factor banka d.d” and without his own resources, a building, and who has arranged the documentation at the expense of the bank loan. With the arrival of the crisis the project was no longer profitable. If the loan had been transferred to the BAMC, the member of the ruling economic-political elite would have been expropriated. The BAMC would have cashed the mortgage insurance, taken over the project and then, through transparent procedures, sold it to a buyer without any possible connections to the debtor or his representative. In low start position is a Brežice media-spa-marina tycoon who is discussing with his Eastern friends the repurchase of the 150-million-euros bank hole he has created at a discounted price of 30 or 40 million euros. Or a legal, financial and octopus-like expert who, through his mediators, is controlling the undertaking with an excellent-positioned plot and hopes to receive a 90-percent discount for the “sale of the project”.

The BAMC has now become “open for business”, for business transactions and a gift the current authorities have consciously given to “economic-political” elites. All these financial holes will be covered by taxpayers who already owe 30 billion euros - 15,000 euros each. In the future the BAMC will, taking into account “friendly” valuations and using various development strategies, “rehabilitate” hand-picked tycoons. As many times before, we all know it all but are willing to do nothing to stop the interest groups and to prevent a moral hazard and subsequent accumulation of wealth by privileged economic-political elites which appear to be untouchable also for law enforcement authorities.

The bad bank – good business for the tycoon elite. The tales of morality and ethics – a good-night fairy tale. Good morning, Slovenia!

Association for European Slovenia, 11 October 2015