Slovakia rejects first vote on rescue fund

SLOVAKIA’S government lost a confidence vote called over a plan to bolster the eurozone’s rescue fund, but the package is expected to go through in a later re-vote because the outgoing prime minister planned to ask for help from the opposition.

The result had been anticipated after a junior party in the coalition said it would abstain. All 16 other eurozone countries have already ratified the plan to give more powers to the European Financial Stability Facility (EFSF).

Slovakia’s main opposition party, the leftist SMER, has said it would be willing to discuss supporting the EFSF deal after the government has fallen.

The central European country that adopted the euro in January 2009 is the last to vote on the changes that require the agreement of all the 17 eurozone countries.

After weeks of threats to reject the changes, one of the coalition partners in the government, the Freedom and Solidarity party, softened its stance ahead of a vote yesterday afternoon and agreed to abstain.

Their leader, Richard Sulik, objected to the country of 5.4 million people being asked to guarantee €7.7bn as their contribution to the European EFSF, required to give Greece a second rescue loan.

But prime minister, Iveta Radicova, made the vote one of confidence in her and her cabinet.

Her action was immediately decried by Mr Sulik as blackmail. “These are things that severely damage Slovakia, Slovakia is not responsible for saving the world,” he said.

The left-leaning opposition party, SMER, has said it would vote in favour of the EFSF changes in a second vote, possibly in exchange for a cabinet reshuffle or early elections. Their support would mean a comfortable majority of 118 votes of the 150.

There was no immediate decision on when the vote would be taken but finance minister Ivan Miklos told parliament: “There is an assumption that the EFSF, one way or the other will be approved by the end of the week.”

The changes increase the amount of the fund that can be used from €250bn to €440bn and with a possible €780bn on foot of guarantees.

Mr Sulik said he wanted Slovakia to opt out of the planned permanent EU bailout fund in 2013. Slovakia refused to take part in the original €110bn bailout for Greece.