The Slovak Republic will have to dig deep into its shallow pocket to feed the sinking economies of the eurozone, with almost EUR 660 million to be put up in cash over the next five years as part of the European Stability Mechanism (ESM).
According to the draft agreement on the ESM bail-out fund that finance minister Ivan Miklos presented to the government for review, Slovakia will start contributing its share to the ESM in July 2013, when the mechanism replaces the EFSF system in place to date. The EUR 660 million payment will be split into four separate tranches.
The ESM will basically act like a company from which the individual countries of the eurozone will buy shares, with a total ‘share capital’ of around EUR 700 billion.
The biggest hurdle to pushing through the ESM proposal in parliament is likely to be coalition party SaS party, led by parliamentary chairman Richard Sulik, as he and his party have always been critical of Slovakia’s participation in the ESM.
In May Sulik even tried to rally the support of opposition party Smer-SD, while saying Slovak taxpayers were being hoodwinked and could use this money wisely instead of throwing it away on countries like Greece, Portugal and pensions for “God knows who”.