Slovakia has managed to negotiate a change in key conditions for contributions to the European Stability Mechanism (ESM), said Slovak Finance Minister Ivan Mikloš after an extraordinary session of eurozone finance ministers held in Brussels late on Monday, March 21.
Thanks to a change in the rules that are currently being applied in the case of the European Financial Stabilisation Facility (EFSF), Slovakia should save €1.17 billion, Mikloš said. Contributions to the EFSF are based equally on the number of inhabitants of a country and its share of total eurozone GDP. Small countries such as Slovakia, Slovenia and Estonia complained about this calculation method, however, and sought to have the population factor excluded. The 17 eurozone members eventually agreed on a compromise solution proposed by Estonia - with 75 percent of the contribution to be calculated according to a country's contribution to overall eurozone General National Income (GNI) and 25 percent according to its share of capital in the European Central Bank (ECB). This latter factor is divided equally between population figures and contributions to total eurozone GDP.
"We have a definite agreement in the compromise proposal on a change in the [contribution] key. Our arguments had weight. We raised this issue a month ago, and we emphasised that this is a matter of principle for us ... Slovakia's participation will be 17 percent lower than in the case of the EFSF," Mikloš said, as reported by the TASR newswire, adding that he is still not 100-percent satisfied with the solution agreed.
"Population numbers shouldn't be included in the distribution key at all, so a certain amount of ill-logic remains. We respect the fact that we can't achieve everything," he said.
According to the new calculation method, Slovakia will contribute €5.83 billion to the ESM, while it would have paid €7 billion according to the EFSF rules.
The ESM should begin operating as of July 2013 as a financial institution replacing the temporary EFSF. As was the case for the EFSF, the ESM should serve as the last resort for eurozone states in serious financial trouble.
Compiled by Zuzana Vilikovská from press reports
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23. Mar 2011 at 10:00