AFTER much prodding from the European Union and a lengthy domestic game of blame, the government of Iveta Radičová has nodded to Slovakia’s participation in the European Financial Stabilisation Facility (EFSF). The government’s July 15 ‘yes’ must now be approved by the country’s 150-member parliament, in which the ruling coalition holds a narrow majority, and then be signed by Slovak President Ivan Gašparovič.
Slovakia, however, will not share any of the financial costs of the first multi-billion rescue deal for Greece since the government recommended that parliament reject any additional codicils to the original agreement signed by the previous government that would be required if Slovakia was to contribute any cash to the Greek loan deal.
“We have agreed to the safety net and recommend that parliament approve the framework agreement but attached a cabinet statement which includes the government’s objections,” Finance Minister Ivan Mikloš said, as quoted by the Sme daily.
Even though two of the ruling coalition parties, the Slovak Democratic and Christian Union (SDKÚ) and Freedom and Solidarity (SaS) have expressed negative opinions about both the loan for Greece and Slovakia’s involvement in the stabilisation facility, the cabinet’s approval did not come as a surprise. The four parties of the ruling coalition, SDKÚ, SaS, the Christian Democratic Movement (KDH) and Most-Híd approved participation in the mammoth €750-billion EU programme to ensure stability in the eurozone at a coalition meeting held on July 14.
“We will not block other countries of the eurozone and European Union in forming the safety net,” Radičová told the media after a meeting of the four-party Coalition Council.
SaS boss Richard Sulík said that even though his party has a different opinion on the issue he understands the political circumstances and said his party would vote to approve adding Slovakia’s signature to the agreement.
Over the past couple of weeks a tug of war has raged between the incoming and the outgoing governments: former Prime Minister Robert Fico quickly threw the ball to Radičová after he was not able to form a government, suggesting that approval of the European programme was already Radičová’s responsibility even though she was not appointed prime minister until July 8. She insisted that before then Slovakia’s formal yes or no, which was supposed to come before July 1, was fully within the power of Fico’s government, which had earlier inked the deal.
Last week the SDKÚ, the largest party in the governing coalition, said that the previous government’s decision to support the eurozone protection mechanism seemed irreversible and that the new government would not withhold its approval.
The EFSF plan was developed in response to EU concerns about the financial stability of the eurozone, which has been shaken by Greece’s debt woes and concerns about the financial condition of several other eurozone countries. In early May eurozone finance ministers, including Slovakia’s finance minister at the time, Ján Počiatek, agreed to a multi-billion rescue loan to Greece, with Slovakia expected to contribute €800 million.
Slovakia’s share of the costs in establishing the EFSF will be €4.4 billion. Mikloš stated that Počiatek and the previous government failed to negotiate a fair deal for Slovakia.
“If Slovakia is supposed to contribute 2.3 times more in terms of GDP-ratio than the wealthiest EU country, Luxembourg, then it’s evident that the conditions have been negotiated poorly,” Mikloš said, as quoted by the TASR newswire.
However, Mikloš said the new government could no longer seek to negotiate these contributions as the breakdown had already been approved by the parliaments of other EU member states.
Radičová and Mikloš visited Brussels on July 13 to speak with EU officials, including European Council President Herman Van Rompuy, about the safety net programme and Slovakia’s participation in it. They had hoped to secure better conditions but were told directly that they were no longer negotiable.
European Commission President José Manuel Barroso said after his meeting with Radičová that solidarity within the EU works in both directions.
Martin Bútora of the Institute for Public Affairs (IVO) think tank said that Slovakia found itself in a strange situation during the public discourse over the EFSF.
“The government of Robert Fico agreed that we would support this concept, but without any active participation by Finance Minister Počiatek or by advisers to the prime minister or Počiatek in the discussions as this European policy was being formed,” Bútora told The Slovak Spectator. “We accepted it even though it was formed without active Slovak participation.”
Bútora said that for this reason it was appropriate that the new prime minister and finance minister went to Brussels and reviewed the details of the agreement as well as its political context.
