PM Links EFSF Vote to Government No-Confidence Vote

Following a brief meeting with her coalition partners this morning, Prime Minister Iveta Radicova announced before a special government session that today’s parliamentary vote on the new EFSF bailout fund would be combined with a confidence vote in the government.

Yesterday’s Coalition Council meeting produced no fruits as the SaS party is still adamant that it will not vote in favour of the EFSF unless certain concessions are made. Prime Minister Iveta Radicova had earlier said she would be willing to stand down from her post if no agreement is reached in the coalition, but linking today’s crucial vote to a no confidence vote was generally seen as the best way to put tactical pressure on the SaS to yield. PM Radicova made a last-ditch attempt to compromise with the SaS this morning, offering them the option of being able to veto individual loans via the EFSF in future, but to no avail.

The PM’s latest announcement means the future of the government, the country and possibly the whole eurozone lie in the hands of the SaS party, or does it? Given the fact that some MPs have turned coat in the past, the latest ‘offering’ of a no confidence motion in the government has handed power on a plate to anyone wishing to break up the coalition, because even at full throttle the government has a very slim majority in parliament.

That majority has already been lost as independent MP Igor Matovic and his three partners from the Obycajni Ludia (Ordinary People) faction of the SaS are refusing to vote on two things at once and so don’t plan to take part in the vote at all, meaning the government would have a maximum of just 75 votes even with the full support of the SaS, i.e. one short of the required parliamentary majority.

The SaS party is firmly against Slovakia contributing more to the bailout fund, though, and all proposals have been swept off the table on both sides. Even this morning head of the SaS Richard Sulik stood his ground saying nobody in his party would vote in favour of the EFSF.  They therefore plan not to take part in the vote, which Sulik says is playing into the hands of opposition leader Robert Fico. Some believed Fico’s Smer-SD party would vote in favour of the EFSF anyway, but this option has grown slimmer with the dangling carrot of being able to bring down the government and wrench back power instead.

Radicova made it clear that a Slovak prime minister could not let the country become isolated in Europe, and that it was very unfortunate that her SaS coalition partner had rejected this latest, and last, attempt at a compromise. She has already spoken to President Ivan Gasparovic about potential next steps should her government fall, as it is his jurisdiction to decide what to do if the government collapses.

So the stage is set, the actors in place, but the script is still unwritten. The vote this afternoon could turn out several ways, but there is a good chance that the actual vote will be blocked due to a lack of support in the motion even to take the vote.

Whatever happens, the future of the government looks far from rosy as the coalition crumbles over the deadlock and the tactical play of the PM to force the defiant SaS party into making a choice hasn’t helped. The eyes of Europe are watching as tremors are sent out through the eurozone, which is now dependent on how the Slovak political game will play out, with key European indexes already dropping as investors wait in anticipation of the outcome.