PM Fico on debt crisis: I don't trust the Greeks

SLOVAKIA will contribute to a huge international bridging loan for Greece, but not straightaway and only under certain conditions: that was the message of Slovak Prime Minister Robert Fico to the international community in early May, in response to the €110 billion rescue package being assembled to rescue Greek finances. The debate over Slovakia’s contribution to the European rescue package has generated some sharp words, with Fico stating publicly that he does not trust the Greeks and that until the country adjusted to economic reality, Slovakia would contribute nothing.

SLOVAKIA will contribute to a huge international bridging loan for Greece, but not straightaway and only under certain conditions: that was the message of Slovak Prime Minister Robert Fico to the international community in early May, in response to the €110 billion rescue package being assembled to rescue Greek finances. The debate over Slovakia’s contribution to the European rescue package has generated some sharp words, with Fico stating publicly that he does not trust the Greeks and that until the country adjusted to economic reality, Slovakia would contribute nothing.

“We will sign no blank check,” Fico said, as quoted by the SITA newswire. “We want to see that Greece does its homework.”

Eurozone finance ministers, including Slovakia’s Ján Počiatek, agreed to the multi-billion rescue deal in early May. Slovakia is supposed to contribute €800 million to the bailout.

Greece is now facing the difficult task of slashing bonuses for public-sector employees long accustomed to supplementary payments, imposing a three-year freeze on civil servants’ basic salaries, halting new recruitment and planning possible further layoffs. Excise taxes on fuel and tobacco will rise and some luxury goods and profitable businesses face additional taxes. Pensioners will also be affected: some pension bonuses will be cut, and early retirement will be limited.

Fico has said that he does not expect any of these things to happen before the general election takes place in Slovakia in mid June, and has indicated that the country will therefore decide on its contribution to the Greek loan only after the election.

Meanwhile, an extraordinary session of the Slovak Parliament to discuss the country’s contribution to the Greek package was due to be held on May 7, on the initiative of three opposition parties: the Slovak Christian Democratic Union (SDKÚ), the Christian Democratic Movement (KDH) and the Hungarian Coalition Party (SMK). The debate was due to take place shortly after The Slovak Spectator went to print.

The SDKÚ insisted that parliament should decide on a mandate for the cabinet and the prime minister for negotiations in Brussels on the loan for Greece.

“We are calling on the prime minister not to accept any commitments,” said Iveta Radičová, election leader of the SDKÚ.

The SDKÚ is fundamentally opposed to providing a loan to Greece.

“Making up for the irresponsible behaviour of governments, the failures of European Union institutions, the inappropriate running up of debt and the preservation of [artificially high] living standards is a complete denial of the Slovak way,” said Radičová, as quoted by TASR newswire.
The KDH, however, is in favour of helping Greece. Its leader Ján Figeľ suggested that it was the only way to avoid the eventual collapse of the whole monetary union.

“It is an unwelcome but unavoidable solution,” said Figeľ. “We do not have many other options to choose from, and every other option is worse.”

He added that the rescue package makes sense only if Greece adopts firm measures and reforms.
Meanwhile, former finance minister and SDKÚ deputy chairman Ivan Mikloš warned that Slovakia may be heading for trouble similar to Greece’s because, like Greece, it has failed to use a period of economic growth to slash its public spending deficits.

Fico criticised the opposition’s initiative to debate the loan for Greece in parliament as an attempt to squeeze some political advantage from the situation. Fico suggested that by participating in the loan Slovakia would be doing more than just helping Greece, since if it were to default it would affect the whole eurozone. However, Fico expressed strong doubts about the reliability of the loan recipients.

“I do not trust the Greeks,” Fico said, adding that Greece first needs to adjust to the real economic situation.

Fico said he would discuss the loan with the government’s social partners, trade unions and employers, via the Confederation of Trade Unions (KOZ) and the Federation of Employers' Associations of the Slovak Republic (AZZZ).

His ruling coalition partners, the Movement for a Democratic Slovakia (HZDS) and the Slovak National Party (SNS), differ over the loan to Greece. The SNS is opposed to it, while the HZDS says that it should be understood as support for the euro.

“The euro is weakening against the US dollar and the Russian rouble,” said HZDS boss Vladimír Mečiar. “The euro must now defend its position.”

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