Eurozone Hangs on Slovakia; Government in Crisis

The Slovak government could be crumbling thanks to continued disagreement over the Eurozone bailout funds, as the liberal SaS party sticks to its stance by refusing to support the proposals in parliament.

Time for coalition to sweat (c) The Daily

There was talk last week that the SaS’ coalition partners SDKU, Most-Hid and KDH were contemplating combining the vote on the EFSF and ESM with a vote of confidence in the government, as the government finds itself in a sticky position that has put Slovakia in the spotlight once again in the eurozone. KDH MP Pavol Abrhan admitted that this was one of the options open to the government, a kind of blackmail, which has seemingly worked for the respective coalition parties so far.

The four coalition parties are meeting today (all 79 MPs) at a government country retreat to battle it out and try to come up with a solution allowing the government to pass the necessary legislation for the EFSF and ESM to go forward, or the country will otherwise hold up the rest of Europe once again.

The SaS party is so adamant about its stance, though, that it has even published information brochures for people, explaining its reasoning and the consequences of the proposed legislation if passed, calling it the “road to socialism”.

Head of Most-Hid party Bela Bugar has said that it is not possible to operate properly for long with such an atmosphere pervading in the coalition, while head of KDH Jan Figel admits that the government coalition is at risk of collapsing if no agreement is found on the bailout funds in Slovak parliament. Some coalition MPs are saying the SaS position is not a campaign against the eurozone stability mechanisms as such, but a campaign for early elections.

The second option is something that head of opposition party SMer-SD, Robert Fico, is well aware of, and so he is playing his own hand tactfully by refusing to support the proposals if the coalition is not united on them. Fico therefore likes the idea of combining the no confidence vote in the government with the passage of the bailout fund proposals. The audacity of this approach is all too clear as his party de facto supports the proposals, and so if they are not pushed through Slovak parliament, fingers from across Europe will possibly be pointing at him and his party as well.

Finance minister Ivan Miklos, who has been banging heads with the SaS over the issue for months now, also admits that a real crisis now hangs over the coalition. He is hopeful that the coalition will find some kind of agreement today, but he is well aware that the set of problems within the coalition are mounting. These also include disputed proposals of tax and levy reform and pharmaceutical legislation.

Slovakia was quietly hoping to get off the hook with some other country blocking the EFSF and ESM proposals, but this has not happened, leaving Slovakia the black sheep in the family once again, as it was with the first rescue loan for Greece.

Nobody knows just how the dice will roll, but if a consensus is not achieved in the coalition, not only will it probably spell the end of the coalition, but it will shape the Slovak Republic’s position in Europe, and possibly the shape of Europe, for decades to come.

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