BRATISLAVA – Parties in Slovakia’s fallen government struck a deal with the leftist opposition yesterday to ratify a plan to bolster the euro zone’s rescue fund by tomorrow, effectively ending a crisis that had threatened the currency’s main safety net.
The approval for boosting the European Financial Stability Facility (EFSF) hit an obstacle a day earlier when a junior party in Prime Minister Iveta Radicova’s government blocked its passage in a confidence vote that also toppled the cabinet. Slovakia, whose 5.4 million people make up less than 2 per cent of the currency bloc’s population and 1 per cent of its total output, is the only member not to ratify the plan to increase the EFSF’s powers and fight the spreading debt crisis.
Ratification by all 17 members is needed for the changes to take effect, and the Slovak foot-dragging comes even as other European leaders wrangle over further steps to protect euro zone banks if Greece defaults on its debts.
Germany and France, the leading powers in the bloc, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit on October 23rd.
After meeting the heads of the three centre-right government parties in favour of shoring up the EFSF, the leading opposition Smer party agreed to help them push it through in exchange for an election on March 10th, rather than in 2014 as scheduled.
“The agreement makes it possible that either tomorrow night or at the latest, Friday morning, the EFSF and the laws tied to it will be approved,” Smer leader Robert Fico said.
He said the vote would come “immediately after a constitutional law on holding early elections in March 2012 is passed”.
Earlier yesterday, the presidents of the European Commission and the European Council urged a speedy resolution.
“We call upon all parties in the Slovak parliament to rise above the positioning of short-term politics, and seize the next occasion to ensure a swift adoption of the new agreement,” commission president José Manuel Barroso and council president Herman van Rompuy said.
Slovakia’s portion of the €440 billion in guarantees backing up the EFSF would be €7.7 billion – about 11 per cent of its annual output. – (Reuters)
EU leaders must put aside divisions to avoid contagion, says Barroso: page 18