Ljubljana: Slovenia will have a plan ready to put to parliament in two weeks to sell off state assets, probably including a bank, the country’s prime minister said on Friday as her government races to avert a bailout.

In her first major news conference in Ljubljana since taking office last month, Alenka Bratusek said her government would also send a ‘stability programme’ to European Union partners in Brussels by 9 May “at the latest".

The head of Slovenia’s largest bank, state-owned NLB, told Reuters on Friday he did not expect the bank could be sold this year but finding a buyer would be possible in 2014 if the bank is recapitalised and restructured.

The tiny ex-communist country is coming under increasing pressure from financial markets after the messy bailout of Cyprus last month, raising concerns it could be the next euro zone country to need rescuing.

The country of 2 million people needs to raise about €3 billion ($3.9 billion) this year to recapitalise its biggest state-owned banks, repay maturing debt and cover its budget deficit.

Yields on its 10-year benchmark bond rose to 6.61% on Friday—closer to the 7% threshold at which a country’s finances can become unsustainable—from 4.77% on 15 March, the day before the Cyprus bailout deal.

“We will immediately start processes to privatise one or two companies. My wish is that one of those would be a bank," Bratusek said, adding that the proposals would come before parliament in 14 days.

Investors have complained over the lack of clarity regarding the plans of the three-week-old centre-left government, but Bratusek said she believed decisions should be reached before they are revealed to the public.

“I find it difficult to talk about things until they are agreed upon. I think it is right to do something first and then present it (to the public)."

Slovenia, the first state to break away from the former Yugoslavia and a trailblazer for ex-communist eastern Europe when it joined the euro zone in 2007, shied away from privatising its biggest banks, which are now burdened with bad loans. Its export-driven economy has been pounded by falling demand in the debt-laden euro region.

Trying to calm markets, Slovenia’s finance ministry said on Thursday it planned the early rollover of debt maturing in June with an auction of around €500 million ($656 million) worth of 18-month treasury bills on 17 April.

“I hope and wish that the T-bill auction will be successful," Bratusek said.

If successful, the operation which was probably agreed ahead of time with Slovenia’s mostly state-owned banking sector, could give markets more time to calm down following the Cyprus’s rescue.

Bratusek said the 2013 budget adopted by the previous government was “unrealistic" and would likely be revised to introduce more savings and tax increases, adding it was unrealistic to expect that the government could run a balanced budget as early as in 2015 as suggested by the opposition.

Last year the previous, conservative government—which lost its majority in parliament this January over a corruption scandal—managed to reduce the budget deficit to 3.7% from 6.4% in 2011.

Bratusek said the new government will continue with austerity but will also aim to do it in a way so as not to cause further economic contraction.

“It is a fact that we have problems, but I assured (Brussels) that we will continue with reforms," Bratusek said.

The government expects the economy to contract by 1.9% this year versus 2.3% in 2012 due to weak export demand and a fall in domestic spending caused by budget cuts but expects a mild recovery in 2014.

The country’s banks, mostly state-owned, are nursing some €7 billion of bad loans which equals a fifth of GDP. The government plans to establish a bad bank by June that will take over bad loans and enable bank privatisation. Reuters