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Slovak MPs approve bailout fund

LAST year’s parliamentary vote in October on the European Financial Stability Facility (EFSF), a plan that European leaders had signed up to in July 2011 to calm increasingly jittery global financial markets, bought much drama to the domestic political stage and led to the downfall of the government of Iveta Radičová. On June 22, the 150-member Slovak parliament – in which the Smer party holds a comfortable majority following the March 10 elections – voted on another sensitive European issue, the European Stability Mechanism (ESM), the permanent rescue fund proposed by eurozone countries to replace the EFSF. The legislation passed this year without drama, as 118 MPs voted in favour of the treaty among the 144 present.

TheESMreceived support from opposition parties. (Source: SME)

LAST year’s parliamentary vote in October on the European Financial Stability Facility (EFSF), a plan that European leaders had signed up to in July 2011 to calm increasingly jittery global financial markets, bought much drama to the domestic political stage and led to the downfall of the government of Iveta Radičová. On June 22, the 150-member Slovak parliament – in which the Smer party holds a comfortable majority following the March 10 elections – voted on another sensitive European issue, the European Stability Mechanism (ESM), the permanent rescue fund proposed by eurozone countries to replace the EFSF. The legislation passed this year without drama, as 118 MPs voted in favour of the treaty among the 144 present.

Slovakia’s vote on October 11 last year led to considerable concern in Europe and was closely watched by the international media, but this time the European community had already been assured by Prime Minister Robert Fico that Slovakia would approve the ESM. The opposition parties had also stated they would support the ESM and mostly did so, except for Freedom and Solidarity (SaS), several MPs from the Ordinary People and Independent Personalities (OĽaNO) party, Monika Gibalová from the Christian Democratic Movement (KDH), and former KDH MPs Daniel Lipšic and Jana Žitňanská, who now sit in parliament as independents.

The treaty must now be signed by President Ivan Gašparovič and that is expected soon. Parliament will also discuss specific domestic legislation that is required to address details of Slovakia’s participation in the ESM.

Slovakia will be required to deposit nearly €660 million in cash with the ESM, to be paid in five tranches. Slovakia’s total financial guarantee to the ESM will come to €5.768 billion, the TASR newswire wrote.

Slovak Finance Minister Peter Kažimír commented during a talk show broadcast on public-service Slovak Television that Slovakia’s participation in the ESM is essential for the country, as it is not possible to “have the euro and not be part of such a mechanism”.

Kažimír termed those who had opposed the ESM “egoistic”, adding that they must mistakenly believe that Slovakia will never need help from other countries.

Shortly after the June 22 vote, the leader of SaS, Richard Sulík, said that by approving the ESM the Slovak parliament had “buried Slovakia’s sovereignty and consigned the country to economic vassalage”. He added that the country’s participation in the ESM will mean that it will soon slide into debt amounting to billions of euros.

Last year it was SaS that refused to support changes to the EFSF even after former prime minister Radičová turned that vote into a vote of confidence in her government, of which SaS was a part.
Parliament rejected a proposal put forward by Sulík on June 22 to postpone Slovakia’s decision until after Germany had voted on it.

“One hundred and eighteen MPs voted for the permanent bail-out mechanism even though we cannot withdraw from the treaty, it cannot be scrapped, and shares in the ESM cannot be sold, advanced or given away,” stated Sulík, as quoted by TASR, adding that Slovak MPs had approved the ESM even though the German Constitutional Court had expressed doubts about the treaty and suggested that German President Joachim Gauck should not sign it.

Kažimír said that the proposal to create the ESM was the result of evolution, adding that Europe’s biggest problem is that it took almost a year before European leaders decided to approve the idea, adding that this is a weakness of the EU.

“This is the problem which has been testing Europe – that it is unable to respond within a couple of weeks or months, as for example the United States of America can – because it consists of 27 countries and each country is in a different part of its political cycle,” Kažimír told STV.

Kažimír also said during the STV talk show that he believes closer European integration is a solution, warning that Europe is “approaching a breaking point” and that Slovakia must respond appropriately and not have the attitude of “someone just sitting on the fence and doing nothing but making comments”.

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