• Domestic political crisis out of the way, Slovakia to approve bailout fund

    The Slovak parliament is set to approve legislation backing a strengthening of the eurozone’s €440 billion rescue fund after the centre-left opposition said it would back a fresh version of the bill in return for early elections.

     

    Hours after the government fell in its attempt to pass a bill approving the changes to the European Financial Stability Facility (EFSF) when one of the four governing parties refused to support the law, former prime minister and leader of the opposition Smer party Robert Fico told reporters a deal had been reached that will see the legislation pass easily with his groups support.

    “The agreement makes it possible that either tomorrow night or at the latest Friday morning the fund and the laws tied to it will be approved,” he said. “Slovakia will ratify the bail-out mechanism without any problems.”

    A vote is to take place as early as Thursday or Friday.

    But the price paid by the governing parties is steep and the country has been shaken as the wider eurozone economic crisis turned into a political crisis in the country.

    In return for Smer’s support, the three centre-right coaliion parties that backed the EFSF changes – the Slovak Democratic and Christian Union (SDKÚ), the Christian Democratic Movement (KDH) and Most-Híd – had to agree to elections that will take place on 10 March.

    The cabinet is set to propose a constitutional law to bring forward the election schedule, a bill that is to be passed via a fast-track procedure, according to local reports.

    Once the election bill has been approved, Smer, which had abstained in the first vote on the EFSF changes on Tuesday evening, will now give its blessing to the alteration of the bail-out fund.

    Smer is the big winner of the tussle in the central European country, the last of 17 eurozone states who must approve the EFSF changes before they can take effect. The party leads in the polls.

    Were an election to take place today, Robert Fico would handily win back his old job as prime minister.

    Source: EUobserver, OEIC staff