Since the Greek private sector debt restructuring, many understood that Cyprus was vulnerable. The timing and policy response is that took most by surprise. The experience spurred investors to look for the next potential candidate for aid and many have settled on Slovenia. The general story is now well appreciated. It is a small economy. Last year's deficit was about 5% of GDP. This year's forecast of 5.1% is likely optimistic given the downside risks to growth and upside risks to interest rates. However, the main problem is not with the state sector, and around 60% the debt/GDP is nearly 2/3 of that euro area ... (full story)