The EFSF Bubble Has Still Not Burst

The four government coalition parties have still not reached a consensus regarding the future shape of the European Financial Stability Facility (EFSF) and the clock is ticking fast.

No agreement yet (c) NRSR

The SaS party’s outright refusal to support the revised mechanism has given way to all kinds of speculations about what will happen in or after the vote. Although the statement of Prime Minister Iveta Radicova about not combining the vote on the EFSF with a confidence vote in her government has calmed things a little, the storm is far from over.

The top meeting of Radicova’s SDKU party yesterday decided not to combine the two votes, instead proposing an Addendum to the Coalition Agreement as a kind of compromise that would force all parties to vote in favour of the new conditions for the EFSF.

The proposal got the backing of coalition partners KDH and Most-Hid, most likely agreed in advance, but the SaS party is still not happy, rejecting the proposal as a watered-down version of the original proposal of finance minister Ivan Miklos.

Miklos’ proposal would allow each coalition party to support or veto any specific bail-out loan in parliament, but that they would apply the principle of one-for-all, meaning if one coalition party disagreed with a loan, they would all vote against it.

The latest proposal put forward by chairman of SDKU, foreign minister Mikulas Dzurinda, makes no mention of the vote in parliament, pushing this right of veto to the platform of the Finance and Budget Committee and subsequent vote at a government session.

The National Bank of Slovakia (NBS) noted yesterday that the government should give the green light to the new EFSF as the parliamentary vote here on the issue would determine how reliable the rest of the eurozone will view Slovakia in future.

The vote on the EFSF is being left until the last minute, but even the defiant SaS admits that the vote could and maybe should be made a little earlier. The vote has to be made before the EU summit on 17 October, so Slovakia will be the last eurozone country to vote on it.

This leaves very little time to find a majority in parliament, however, as the SaS feels the whole proposal should be revised altogether. Opposition party SNS is against approving the bill, while the Smer-SD is playing tactics by refusing to support it until the government has a unanimous stance on the matter, which if it did have, would mean the support of Smer-SD is not needed anyway.

1 Comment

  1. Richard Sulik is the most important man in the world. They won’t vote for the EFSF. Why? Because. his economic views are Liberal, and it would be in Slovakia’s interest to leave the Euro. It already has the manufacturing base and foreign investment. Leaving the Euro will make it more competitive in a depressed Europe. 19% Tax and a Liberal, fiscally responsible government is a big plus for business to invest post a European recession. This is his ultimate strategy.

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