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ESM legislation to proceed via fast-tracked process

Slovakia’s cash contribution to the European Stability Mechanism (ESM) will reach €659.2 million, according to the legislative proposal on the ESM that will be debated in parliament via fast-tracked legislative proceedings. To make the contribution, five payments are scheduled, with the first (€131.84 million) to be made by Slovakia within 15 days after the law comes into force (i.e. in mid 2012). According to the document submitted by the Finance Ministry for debate, the second payment is expected later this year, probably in October.

Slovakia’s cash contribution to the European Stability Mechanism (ESM) will reach €659.2 million, according to the legislative proposal on the ESM that will be debated in parliament via fast-tracked legislative proceedings. To make the contribution, five payments are scheduled, with the first (€131.84 million) to be made by Slovakia within 15 days after the law comes into force (i.e. in mid 2012). According to the document submitted by the Finance Ministry for debate, the second payment is expected later this year, probably in October.

"Slovakia should provide the other three payments [during] 2013-14 worth €395.52 million in total," the ministry calculates, as quoted by the TASR newswire. According to the Finance Ministry, the first payment will be covered by state financial assets without the need to raise more money, so this step will not affect the budget deficit or increase state debt.

The other payments will require an increase in state debt. The ESM, as the permanent safety net available to help indebted eurozone members, will replace the temporary European Financial Stability Facility (EFSF). Unlike the EFSF, which operated based on guarantees for bonds issued by the EFSF, the ESM will require direct cash deposits. Members will have to contribute €80 billion in cash and the remaining €620 billion will be represented by guarantees in the form of shares payable on demand.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
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