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Slovakian report Slovakian report
by Euro Reporter
2011-09-09 07:13:05
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Extend bail-out fund’s powers

Slovakia’s cabinet on Wednesday approved extending the powers of the European bail-out fund. It now faces a fight in getting the measures approved by parliament because of the opposition of one of the four members of the governing coalition. The centre-right cabinet of premier Iveta Radicova has moved quickly to implement the measures to expand the European financial stability facility, agreed at the July 21 European summit. The new powers will allow the EFSF to inject capital into eurozone banks and purchase distressed sovereign bonds on the open market.

However, the measures, which have to be approved by all 17 eurozone members, must also pass through parliament, where Richard Sulik, the speaker of parliament, and his Freedom and Solidarity party (SaS) are adamantly opposed despite being part of the ruling coalition. Mr Sulik, a self-made millionaire with libertarian views, is ideologically opposed to bailing out Greece and other eurozone countries which did not follow the common currency’s rules, a position that is broadly popular in Slovakia as Slovaks, who met the criteria to join the euro in 2009, have little patience for helping out the wealthier Greeks.

Mr Sulik wants to hold the vote as late as possible, to see if the €440bn ($619bn) bail-out fund garners support elsewhere in the bloc, while Ivan Miklos, the finance minister, is pushing to have the measures approved much earlier. Without the support of SaS’s 21 MPs, Ms Radicova will have to turn for help to the opposition leftwing SMER party of Robert Fico, a former prime minister. However, Mr Fico has said that his party will only back the measures if all the coalition parties do – giving Mr Sulik an effective veto. “SMER is worried about being blamed if the measures end up having negative effects on the economy,” said Grigorij Meseznikov, a Slovak political scientist.

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EU bailout fund 'a road to hell'


An influential member of Slovakia's ruling coalition vowed on Wednesday to block a continent wide plan to boost the powers of the eurozone's bailout fund, calling it "a road to hell." Richard Sulik, leader of the Freedom and Solidarity Party and parliamentary speaker, told The Associated Press that such measures are pointless and reveal the 17-nation eurozone's inability to get a grip on its problems. "European politicians have been solving the crisis for a year and a half and the situation gets worse and worse," Sulik said. Eurozone leaders committed in July to give the rescue fund, the "European Financial Stability Facility", new powers such as the right to buy bonds of governments struggling with their debt loads.

The euro440 billion ($620 billion) fund will become the eurozone's main tool to fight the debt crisis by acting pre-emptively to help governments before they are engulfed in a full-blown crisis. But because it would have more freedom to intervene in markets, some politicians like Sulik are worried that it would be playing loosely with eurozone taxpayers' money and does not represent a credible solution to the crisis. "That's the reason why I reject it, it's a road to hell," said Sulik.

The Slovak government approved the plan to beef up the rescue fund on Wednesday. Slovak lawmakers will vote on the matter some time this fall, according to Sulik, once all other eurozone nations have delivered their verdict. Sulik said that instead of creating new rules, the eurozone should stick to the original ones. "More or less all the rules set by the EU for the euro have been violated. What I say is let's stick to the rules," he said, adding that creating new mechanisms like the rescue fund actually threatened the long-term viability of the euro.

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Slovakia wants to develop Black Sea shelf


Slovakia wants to develop its cooperation with Ukraine in the energy sector, Slovak Foreign Minister Mikulas Dzurinda said at a meeting with Ukrainian Prime Minister Mykola Azarov in Kyiv on Tuesday, according to the government portal. "We are extremely interested in the integration of our energy systems," he said, adding that Slovakia is also ready to participate in the reconstruction of Ukrainian gas pipelines.

"We have certified companies engaged in such activities. Such work has recently been conducted with Serbia, where the signing of respective agreements begins. And we would be very pleased to participate in similar projects with Ukraine. Three consortiums with French and German capital are ready to submit applications for tenders to be announced by Ukraine," Dzurinda said. In addition, he said that Slovak companies were interested in the production of shale gas in Ukraine and the development of the Black Sea shelf.

Azarov, in turn, noted that Ukraine expected the EU to participate in the processes that will begin after the restructuring of Ukraine's state oil and gas company Naftogaz and the creation of an independent Ukrainian gas production company. He said again that Ukraine would fulfil all of its commitments to the countries of the European Union concerning the transportation of Russian gas. Azarov said that Ukraine understood all of its responsibility before the EU and that it would not tolerate any interruption in gas supplies. "We will certainly fulfil the contract and simultaneously hold talks with our Russian partners," he said.


       
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