Slovakia agrees euro zone safety net

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Slovakia agrees euro zone safety net

Slovakia agrees euro zone safety net
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The Slovak government has approved the signing of the euro zone’s emergency loan facility.

It was a U-turn by the new centre-right cabinet of Prime Minister Iveta Radicova who leads the euro zone’s poorest member.

Her party had campaigned on opposition to bailouts during Slovakia’s election last month.

“We want to set an example of following the rules of the game. Because of this, the government has supported the political declaration given by the previous government in May,” Radicova said.

The fund – designed to provide support to countries in trouble – is a crucial part of Europe’s efforts to restore confidence in financial markets after the Greek debt crisis.

To come into effect it had to be signed by all the countries using the euro.

Separately, the Slovak cabinet recommended the parliament should not approve an 800 million euro bilateral loan to Greece, agreed by European countries separately from the EFSF.

“The Greek loan is about irresponsible government policies, irresponsible behaviour of the banking sector, rating agencies, but also of Eurostat and malfunctioning of other institutions,” Radicova said.

Slovakia’s share in the overall 750-billion euro fund is 4.5 billion euros worth of guarantees.

The country adopted the single currency in January 2009, but people there are angry that it has been asked to help bail out Greece, a far wealthier nation.

The minimum wage in Slovakia is 308 euros, well below the Greek minimum legal wage of 863 euros.