Slovak Ruling Party Won’t Support Permanent EU Bailout Fund
By Radoslav Tomek - Apr 20, 2011 4:05 PM GMT+0200 Wed Apr 20 14:05:47 GMT 2011
A Slovak governing coalition party said it won’t support the creation of the European Union’s permanent bailout fund, potentially endangering the bloc’s main tool to quell fiscal crises.
The Freedom and Solidarity party, one of four coalition members, will vote against Slovak participation in the so-called European Stability Mechanism, which is set to be created in 2013 to help distressed countries, Chairman Richard Sulik said today. Prime Minister
Iveta Radicova’s government will therefore need the support of the opposition, led by her predecessor and fierce critic Robert Fico, to approve the country’s participation.
“We are here to defend interests of Slovak citizens, not the interests of foreign banks, which have for a long time made profits on high interest on loans to irresponsible countries,” Sulik, who is also parliamentary speaker, said at a press conference in Bratislava, Slovakia.
European leaders agreed last month agreed to set up the ESM to replace a temporary bailout fund called the European Financial Stability Facility, created after Greek fiscal troubles escalated. As the crisis spreads to other countries, including
Portugal, voters in northern euro-region members are becoming increasingly reluctant to use taxpayers’ money to help debt-laden peers.
Member countries are supposed to contribute 80 billion euros ($116 billion) in cash to the permanent fund and pledge 620 billion euros in guarantees to secure the mechanism’s AAA rating and an effective lending capacity of 500 billion euros. Under the plan, Slovakia’s share would be about 600 million euros in cash.
While supporting the creation of the temporary facility, Radicova’s coalition last year rejected Slovakia’s participation in an international bailout of
Greece.
The four-party coalition has 77 deputies in the 150-seat chamber, including 21 lawmakers from Freedom and Solidarity. Radicova said today she will negotiate with all parliamentary parties and seek their support for the ESM.
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