June 4 (SeeNews) - A new general election is highly possible in Slovenia, as the winner of Sunday's snap vote, center-right Slovenian Democratic Party (SDS), is faced with limited options to forge a government coalition, political analysts agreed on Monday.
Forming a coalition will be very hard regardless of who will be in charge, Matevz Tomsic, professor at the School of Advanced Social Studies in Nova Gorica, commented in an e-mailed response to a SeeNews enquiry.
Sunday's vote failed to produce an outright winner with SDS, led by former prime minister Janez Jansa, securing 25 of 90 seats in parliament, followed by the newcomer List of Marjan Sarec (LMS) party with 13 seats.
Tomsic told SeeNews that the results were not surprising.
"The victory of SDS was predicted by all relevant pollsters. Its campaign was the most professional and the best organised one," he said.
With 99.98% of the votes counted, SDS has won 25 seats, Sarec 13, the Social Democrats (SD) - 10 seats, the Modern Center Party (SMC) of caretaker prime minister Miro Cerar - 10, The Left - 9, the New Slovenia - Christian Democrats (NSi) - 7, Alenka Bratusek's Party (SAB) 5, the Democratic Party of Pensioners of Slovenia (DeSUS) also 5, and the Slovenian National Party (SNS) 4 seats, the electoral commission revealed on Monday afternoon. Two seats are secured for MPs representing the Italian and Hungarian minorities.
However, SDS will find it hard to form a government, with most parties having said before the vote they were not going to join a coalition with the party.
Erste Bank analyst Alen Kovac agreed.
In a note published by the Austrian banking group on Monday, Kovac said that a wide center-left government looks like a baseline scenario in Slovenia, while agreeing that a new election can not be ruled out.
Kovac explained that SDS faces limited coalition potential, with only NSi and possibly the far-right SNS expected to offer their support.
Other parties dismissed SDS as an acceptable coalition partner earlier on, he said, mostly owing to accusations of corruption against the party and its shift towards nationalistic right-wing rhetoric. This suggests that the potential to secure support from at least 46 MPs is lacking, Kovac said.
He sees Marjan Sarec as the front-runner for the position of prime minister in a wide center-left government coalition, which at the moment, Kovac noted, appears to be the more likely option.
"In this scenario, with LMS and Sarec coming second, he is most likely to claim the post of prime minister, but more importantly this coalition would involve 5-6 parties (LMS, SD, SMC, The Left, SAB, DeSUS), making it fragile and with questionable policy making capacity," Kovac cautioned.
In addition, incorporating into a coalition government the populist party The Left, which won 9 seats in Sunday's vote, could prove to be a challenging task.
"Consequently, we don’t rule out new elections, hence political risks are looking to remain elevated in the coming period as well," Kovac concluded.
Tomsic agreed, saying that a leftist parliamentary majority cannot appear without the "far-left Levica" (The Left).
"In this case, the coalition would be very heterogeneous, with partners that have incompatible attitudes on a number of policy issues. For example, LMS advocates building of an anti-migrant fence on the Slovenian-Croatian border, while Levica argues for open-border policy," he said.
"Such a coalition would be even more dysfunctional then the one led by Miro Cerar. In this case, new early elections are a very possible option", Tomsic added.
Prime minister Miro Cerar resigned in March, after the Supreme Court annulled the outcome of last year’s referendum which backed the upgrade of the Divaca–Koper railway - his government’s biggest investment project. Cerar's cabinet has carried on in a caretaker role since then. In April, Slovenia's president Borut Pahor called early parliamentary elections for June 3.
According to Kovac, SD were the sole gainers among the political parties in the outgoing government, securing 4 more seats than in 2014, while SMC took the strongest hit, losing 26 MPs compared to the 2014 elections.
Erste does not see major short-term implications from the inconclusive election results for the economy and markets, Kovac said.
"Economy remains in good shape and a political deadlock is unlikely to derail GDP growth from solid 4.5% in 2018," he noted.
Markets, in Erste's view, should remain calm, especially as the fiscal trajectory looks supportive and financing profile remains the most robust in CEE. "Given the unclear outcome, mid-term impacts may be too early to assess," Kovac concluded.
Voter turnout on Sunday was 52.01%.
Slovenia's National Assembly is elected for a four-year term through the proportional representation system, with a 4.0% entry threshold. The country of two million people joined the EU in 2004 and became the 13th member of the Eurozone in January 2007.
Slovenia gained independence from the former Yugoslav Federation in 1991.