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Euro deal falters over Slovak national politics

Euro deal falters over Slovak national politics
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Slovakia became a member of the euro zone in 2009, five years after joining the European Union. Now here is one of the poorest countries — of fewer than six million people — causing the gears of the intercommunal machinery to slip.

Slovakia saying ‘no’ to a bigger euro zone rescue fund had all the debt crisis countries, Greece, Italy, Spain, Ireland and Portugal, in a cold sweat — and a few others besides.

Slovak MEP Eduard Kukan, said: “I consider it was a tragedy for Slovakia. It (the vote) caused by the irresponsible behaviour of one of the government coalition political parties and I simply want to say that Slovakia shot itself in the leg and it very much damaged its international standing by this vote.”

In 2010, the Slovaks said ‘yes’ when the Financial Stability Fund was created, the 440 billion-euro safety net. That came with an agreement that Slovakia would contribute 4.4 billion euros. With the proposed fattening up of the guarantees, to 780 billion euros, Bratislava is looking at a 7.8 billion euro contribution.

One of the four parties in Iveta Radicova’s beleaguered governing coalition, the Freedom and Solidarity liberals refused to approve the deal saying that, as the euro zone’s second-poorest member, Slovakia should not have to bail out higher-spending, richer countries like Greece. Freedom and Solidarity said it would be fine with the fatter rescue fund if Brussels could exempt Slovakia, which it cannot.

Members in the opposition wanted something else in return for their approval: early elections.

Slovak MEP Boris Zala said: “My party, the Social Democrat, we have some conditions, and the conditions is the bargain about the pre-elections. And when the date of the pre-elections will be put on the table, there is open space to vote in favour of the Facility for Europe (for the EFSF).”

In 2007, the EU’s Lisbon reform Treaty was signed by Slovakia’s then Social Democrat prime minister. Lisbon’s aim was to enhance the EU’s efficiency, coherence and democratic legitimacy. With national politics interfering, Germany and France already want the treaty changed to spare future pain and suffering.

With Greek tax inspectors vowing to strike next week — stopping any possible cash from trickling into the treasury that way — EU, IMF and ECB bailout inspectors on Tuesday gave Greece a green light to receive new aid.

With the EU summit approaching, the Slovak hurdle will need to be worked into the leaders’ new strategy to rise above the debt crisis.