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27th Nov 2022

Slovak government hangs by a thread ahead of crucial EU vote

  • Heavy clouds of uncertainty hang over EU vote in Slovakia (Photo: stefanweihs)

Hours before the Slovak parliament votes on greater powers of the eurozone's bail-out fund, the country's Prime Minister Iveta Radicova has decided to put her job on the line over the decision.

Latest coalition talks ended without an agreement on Monday (October 10), with Radicova saying she will announce details of her political intentions to the ruling parties this morning at 9am Bratislava time.

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According to media reports, the Prime Minister has three options up her sleeve - each signalling the government is hanging by a thread. She could resign before the vote is held on Tuesday afternoon; she could resign should the parliament fail to approve boosting the eurozone's fund (the EFSF); and lastly, she could tie the EFSF vote to a confidence vote.

"I will decide responsibly by morning," said the Slovak leader.

It will be a tough call for the liberal party Freedom and Solidarity (SaS), which remains steadfastly opposed to raising the Slovak contribution to the temporary bail-out fund and has left itself no room for a face-saving manoeuvre.

The SaS's two conditions - veto power over any disbursement of the EFSF money and Bratislava staying out of the future European stability mechanism (ESM) - have been rejected by three remaining coalition partners.

The second condition seems particularly paradoxical as the ESM allows for an orderly default of insolvent countries. That is an approach advocated by the troublesome party.

"We cannot become Robinson [Crusoe] in the centre of Europe," Iveta Radicova said, criticizing the junior ruling party's attitude. "If we think that 16 countries took a certain decision because they have dumb governments and even dumber parliaments, if we think that we can manage the crisis on our own, I don't know how to describe it."

A bigger role for both, the government and the parliament's budget and finance committee in approving the EFSF loans is the farthest the Prime Minister was willing to go in efforts to reach a political compromise with the liberals. However, no red card would be given to an individual political party, Reuters news agency reported.

The enhanced fund needs to be approved by all 17 eurozone states before it can start offering pre-emptive credit lines to governments, buying their debt and recapitalizing banks - something high on the eurozone's agenda after Germany and France committed to do "whatever is necessary for the recapitalization of our banks."

The euro group president Jean-Claude Juncker last week ruled out granting Slovakia a derogation or opt-out in exchange for the country's positive vote.

So, if 21 liberal MPs dig in their heels despite the Prime Minister's threat to quit, the government will have to turn to the former socialist Prime Minister Robert Fico for votes. He is willing to help but only at the price of early elections or a government reshuffle.

Meanwhile, the Slovak public has begun to lean towards approving greater firepower for the eurozone rescue fund. According to a fresh opinion poll by the Polis agency, 44.8 percent of people want the plan to go through, while 32.9 percent oppose it.

The schedule

9am - the Prime Minister meets leaders of four ruling parties to inform them of her next political move

10am - the leadership of the SaS party holds an internal debate

13pm - the parliamentary session on EFSF expansion begins

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