Slovak govt to press rebel party on euro safety net (Reuters)

Euroval riešenie problémov iba odsúva, čím ich zhoršuje. Grécku nepomôže ďalší úver, ale odpustenie časti dlhu, čiže bankrot, citovala agentúra Reuters dňa 4.10. 2011 Juraja Karpiša z INESS.

Slovak govt to press rebel party on euro safety net (Reuters)

BRATISLAVA, Oct 4 (Reuters) - Slovak ruling parties will press a rebel junior partner on Tuesday to back an expanded euro zone financial safety net and so remove one of the last obstacles to the bloc's plan to halt its debt crisis from spiralling out of control.

The centre-right government of Iveta Radicova agreed to expand the European Financial Stability Facility (EFSF) but her governing partner, the liberal Freedom and Solidarity (SaS) party, has vowed to block its ratification.

Slovakia is one of three countries that have yet to approve a deal to beef up the fund to 440 billion euros and give it more rescue powers, and is seen as the least certain to do so.

Leaders of the coalition's four parties were due to meet later on Tuesday to discuss a proposal from Radicova to win over SaS leader Richard Sulik, who insists the 17-member currency bloc's second poorest state should not have to bail out richer countries which have overborrowed and overspent.

"The fact that SaS is negotiating and considering gives me some optimism," said Pavol Hrusovsky, head of the ruling Christian Democrats (KDH). "I hope we can give a final 'yes' or 'no' at today's coalition meeting. I think time for looking for a compromise has run out."

Bela Bugar, head of junior coalition party Most-Hid, said Radicova's proposal, made to SaS last week but unknown to public and media, had created room for a deal.

A parliamentary committee was set to open debate on the EFSF on Tuesday. It is expected to vote on a recommendation to give to parliament by the end of the week.

On Monday, Finance Minister Ivan Miklos said the government expected a vote in the chamber as early as Oct. 11 and no later than Oct. 14 so it could present a result ahead of a meeting of European Union leaders on Oct. 17.

Sharing a border with Ukraine, the country of 5.4 million people has spent a decade transforming its once centrally-planned economy by selling state companies, cutting entitlements and boosting budget revenues with a flat 19 percent income tax.

Its efforts lured billions of euros in investment -- Slovakia now hosts three car plants and leads the world in vehicles produced per capita -- and boosted growth to above 5 percent from 2004 to 2008. But purchasing power still languishes at 74 percent of the EU average, versus Greece's 89 percent.

And salaries averaging around 780 euros a month, just over Greece's minimum salary of 750 euros, leave little room for sympathy for Greeks hit by that country's efforts to shrink its huge budget deficit.

"I think that even if Greece went bankrupt, people in other countries would understand what it means and would start saving," said Viera Reznikova, a 52-year-old accountant from Liptovsky Hradok, some 300 km from Bratislava.

Euro zone leaders want to expand the EFSF so it can prop up banks, give rescue loans to sovereigns and buy government bonds from the market -- all seen as vital to prevent a Greek default from dragging down other euro zone states like Italy or Spain.


Without Slovakia's approval, the EFSF's expanded powers cannot go live. SaS has 21 of the coalition's 77 deputies, so its votes are vital to winning a majority in the 150-seat house.

The only alternative would be for Radicova to cut a deal with the leftist opposition party Smer.

Smer supports the EFSF changes but has refused to back them unless the coalition does too, a stance analysts say it could use to bring down the government and prompt snap elections while also pushing the safety net through.

Bratislava's difficulty ratifying the EFSF deal underscores the euro zone's tortuous decision-making process and coincides with criticism from other world capitals that European leaders are taking too long to resolve the crisis, which has rocked global markets.

Sulik's refusal to support Greece has lifted SaS in opinion polls, with a survey from the Polis agency showing its support at 8 percent last month, from an earlier 6.1 percent, while his fellow ruling parties have seen their popularity fall.

But it has engendered animosity within the coalition. "I'm afraid we cannot rule like this," Hrusovsky said on Sunday. Bugar said he shared this opinion as well.

But with polls showing 50 percent of Slovaks against supporting Greece and other indebted but richer euro members, there is solid public pressure not to spend Slovak tax revenue to help the bloc's most vulnerable members.

"The EFSF only postpones and worsens the problems. A further bailout will not help Greece," wrote commentator Juraj Karpis, from the Iness Institute for tabloid website Novy Cas online. (Additional reporting by Petra Kovacova, Editing by Michael Winfrey and Catherine Evans)

By Martin Santa

Reuters, 4.10. 2011

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