• Slovenian parliament wary of EU bail-out plan

    Slovenian MPs can still vote on the second Greek bail-out and beefed-up euro rescue fund, the EFSF, despite the fall of the government, but getting them to vote Yes “could be a problem.”

    Barbara Raflak, foreign policy advisor to centre-left caretaker prime minister Borut Pahor, who was defenestrated in a no-confidence vote on Tuesday, said on Wednesday (21 September) that parliament will still vote on the measures as planned on 27 September.

     

    She added that a positive result is far from a safe bet, however.

    “When the finance committee met yesterday [to vote on the measures], it was very tight. They got through by seven votes pro and six against … We already had a minority government and the whole opposition is against it,” she said.

    Noting that Slovenia is cutting pensions in its own austerity plan, she went on: “It’s very hard for MPs and ordinary people to understand why we have to make cuts in our own budget and on the other hand we are giving a second bail-out to Greece. And we keep reading in the papers that they don’t conform to [austerity] programmes.”

    “The government says we need a stable eurozone and that this is in Slovenia’s interest. That’s our message, but it’s a difficult one to promote right now. It [the vote] could be a problem.”

    The latest scare for markets watching whether the EU will get its act together on the financial crisis comes after Pahor lost the confidence vote by 51 to 36 over pensions reforms and corruption allegations.

    The development immediately saw Slovenian bonds become more pricey compared to German ones and the country’s stock exchange, the Sbitop, drop almost one percent.

    The likely new leader, who could take over in snap elections in December, centre-right politician Janez Jansa, has in the past said the Greek bail-out “isn’t fair” because Greek workers earn more than Slovenian ones.

    Slovenia – together with Austria, Finland, Malta and the Netherlands – is also seeking Greek collateral for any fresh loans, further complicating the ratification process, which requires all 17 eurozone members to pass the measures before they enter into life.

    The Slovenian scare comes on top of problems in Austria, where the parliament’s finance committee has delayed the EU bail-out bill, and Slovakia, where a junior coalition partner has come out against it.

    Source: EUobserver, OEIC staff