SLOVAKIA’S PARLIAMENT HAS voted against proposals to bolster the Eurozone’s bailout fund and the government has collapsed but this is now likely to mean the proposal will pass parliament later this week.
The governing coalition, led by Prime Minister Iveta Radicova, linked the vote to a confidence motion which was held following a debate in the Slovak parliament yesterday.
As the last of the Eurozone’s 17 countries to vote on expanding the European Financial Stability Fund (EFSF), all eyes were on Slovakia as it voted on a measure seen as crucial to the very survival of the single currency.
The proposal’s defeat means the government has fallen but the measure is now likely to pass parliament later this week.
BBC News reports that the measures failed to pass by 21 votes but that a second vote, as yet unscheduled, is expected to have the support of the opposition party, Smer, whose leader Robert Fico is quoted as saying during the debate on the measure:
We’re saying ‘no’ to a rightist government, but we’re saying ‘yes’ to the rescue fund.
Smer’s opposition to this vote appears to have been motivated by its desire to see a change in government.
Fico, the former premier, would return to the job if elections were held in the coming months but Radicova’s current cabinet could also be replaced by a new coalition or by a minority government, according to the Financial Times.
Measures to expand the EFSF to a lending capacity of €440 billion and give it extra powers, including the ability to buy Eurozone government debt and offer credit lines to members states and its banks are at issue.
The proposals were put forward in July following discussions between German chancellor Angela Merkel and Nicolas Sarkozy but the Eurozone crisis has deepened since then with heightened concerns over the stability of bailed out country’s like Greece.
Having done little to calm the markets it has now been suggested that the fund may need to be expanded to as much €2 trillion through leveraging.
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