Slovakia's Government Falls After Losing Bailout Vote

BRATISLAVA, Oct 11 (Reuters) - Slovakia's government lost a confidence vote called on a plan to bolster the euro zone's EFSF rescue fund, but the package was expected to go through in a later re-vote because the outgoing prime minister planned to ask for help from the opposition.

The result had been anticipated after a junior party in the coalition said it would abstain. All of the 16 other euro zone countries have already ratified the plan to give more powers to the European Financial Stability Facility (EFSF).

Slovakia's main opposition party, the leftist Smer, has said it would be willing to discuss supporting the EFSF deal after the government has fallen.

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Comments

[Orthrus]

10:54 AM on 10/13/2011

The BBC now reports:

"However, the EFSF looks almost certain to pass in the second vote after four parties reached agreement on Wednesday.

"We have reached an agreement on securing the adoption of the most important document of this period - the EU bailout fund," said Robert Fico, head of the Social Democrats.
Slovak Prime Minister Iveta Radicova (left) with former coalition partner Richard Sulik in Bratislava, 10 October Prime Minister Radicova lost the support of former coalition partner Richard Sulik

Earlier, explaining his abstention in the first vote, which helped bring down the government, he said: "We're saying 'no' to a rightist government, but we're saying 'yes' to the rescue fund." "

[Orthrus]

09:55 AM on 10/12/2011

What everyone here seems to have failed to appreciate is that the Slovakian vote had little to do with the EFSF but was all about Party politics.

The main opposition Party which would support the EFSF abstained and so brought down the coalition government. The opposition Party will get concessions from the governing Party and so when the matter is reconsidered the EFSF proposal will be passed because the opposition Party will vote with the governing Party.

The financial markets knew what to expect therefore there has been not been a reaction as a result of this outcome.

[barbra1971]

09:17 AM on 10/12/2011

lovakia's rebel isn't a nationalist: he's the hero of all discontented Europeans
European leaders fear that Slovakia’s attempt to block the new bail-out fund is as dangerous as David’s stand against Goliath. But it’s not just the difference in size and power that’s the worry - it’s that Slovakia’s rebel might have “right” on his side.

Slovakia’s hero is Richard Sulik, head of the Freedom and Solidarity Party (SaS) the junior partner in a four-party coalition.

He has passionately described Slovakia’s 20-year journey from Communism to the European Union - and the deep national pride of meeting the membership requirements against the odds.

Mr Sulik has articulated the dismay of many that in Greece, Slovakians are faced with a country that bent the rules, rather than sacrificed, to gain entry - and now are demanding their luxuries are maintained by others.

http://www.telegraph.co.uk/finance/financialcrisis/8819837/Slovakias-rebel-isnt-a-nationalist-hes-the-hero-of-all-discontented-Europeans.html

[Elroy Jetson]

08:01 AM on 10/12/2011

And the ant said to the grasshopper, perhaps you should have prepared for the winter instead of frollicking through the summer grasses without a care in the world...

[Michael GE]

04:47 AM on 10/12/2011

I wonder about many comments here as they seem not to be aware about the greater picture of what's going on here in Europe.
But first of all, let me mention this: Most Europeans since long have understood (and are opposing or protesting or fuming at) that so far most of the money/ guarantees did not go to Greece but to banks. What are the options? Doing nothing, letting everything just collapse is even worse. I for once do not for a split second believe that the same "financial markets" under pretty much the same laissez faire rules that got us into it would sort it out for the benefit of the many.

Having said that, the main point here is to widen the authority of the EFSF. I don't say everything is perfect about it, but there are a lot of improvements (like for example the authority to circumvent the private bank/ secondary bond market and access the primary market directly, just to name one improvement).

Most of all, parallel to the debate about the EFSF there is now openly the discussion and planning about doing a 60 - 80 percent haircut on Greek debt. In preparation of this, probably all banks (that's discussed right now) will be forced to accept recapitalization which will mean that most of the sector could end up being partly nationalized. All in all, the EFSF will be needed so that all Euro Zone governments can actually achieve that and prevent the domino effect.

[Raymond Strand]

01:00 AM on 10/12/2011

So the Germans ran the Euro Monetary policy to benefit their Export oriented economy which caused problems for the poorer Southern Countries. Now Germany which benefited the most from the terrible monetary policy expects every country to contribute equally?

[Jerry Bourbon]

01:09 AM on 10/12/2011

The GERMANS caused the Greeks to engage in uneconomical practices?

Who knew...

[Little Princess]

02:14 AM on 10/12/2011

I guess "export orientated" is morally on the same level as "smoking" nowadays... sour grapes?

[procrustes13]

07:16 AM on 10/12/2011

Not everyone can have a trade surplus. For someone to have a surplus, someone else must have a deficit. I know that the whole Virtue Vice formula makes such a realisation difficult as everyone is incessantly told that exporting is Virtue and importing is Vice and Germany is thus total virtue and they are right to lecture those who they force into Vice.

[The ORF in Largo]

12:15 AM on 10/12/2011

The Mouse that Roared

[pollclaire]

10:28 PM on 10/11/2011

The average Slovakian is having trouble with the idea that their taxes should be raised to pay back Goldman Sachs for it's speculative investments in Greek debt. Goldman knew what it was doing when it gave billions to the Greek government.

Investments have risks, investment banks need to learn to assess theirs in realistic terms.

If your backup plan involves squeezing money out of Slovakian taxpayers, perhaps you should have planned better?

[Tanrioldu]

07:19 AM on 10/12/2011

Those criminals at Goldman love to go around screwing countries over don't they?

[globalguy]

09:00 PM on 10/11/2011

Slovakia just did what most of the Euro countries are thinking of doing (except Germany and France)....

TIMBER............................................................................

[Little Princess]

02:16 AM on 10/12/2011

"Slovakia" as a whole country is divided over this as most European countries. The ones who "just did" something were 22 parliamentarians of an extreme neocon party.

[edgeman au]

08:45 PM on 10/11/2011

who would have thought such a humble nation would play kingmaker.

[M Cubed]

07:48 PM on 10/11/2011

Do you mind keeping your ignorance to yourself and stop characterizing Germany as Na_zi?

[John michael Adams]

08:00 PM on 10/11/2011

they still act like one.

[DAEdison]

08:17 PM on 10/11/2011

It pretty much doesn't matter what you say after the phrase "Franco-Nazi Eurozone technocrats," because you've just outed yourself as someone who feels comfortable using the word "Nazi" in a discussion of contemporary economics. Whether you agree with the assessment or not, that kind of language does not make you sound intelligent, it makes you sound belligerent.

[sillyfrog]

11:44 PM on 10/11/2011

And dumb.

[4eva]

07:27 PM on 10/11/2011

A TV ad for a popular Slovak beer announces: “To want to borrow from everyone, that is Greek; not wanting to lend to Greece, that is

Slovak.” Though tongue in cheek, it has captured the mood of the people here perfectly.
“Slovakia is not a rich country, we need money for our healthcare system, for our homeless and for our elderly,” emphasized an elderly homeless local.

Living in the second-poorest country in the Eurozone, the Slovaks see no reason why they should help bail out the richest nations who they view as having spent more than they could afford.

http://rt.com/news/slovakia-greece-crisis-bailout-519/

[frank day]

07:39 PM on 10/11/2011

So they're TeaBaggers.

[Maria Korovessis Sewell]

09:26 PM on 10/11/2011

Not only that, they entered the EU espousing the opposite position, and then did a fairly quick 180 turn after their entry. They have a little problem understanding the definition of "union".

[Little Princess]

02:18 AM on 10/12/2011

"the richest nations" - such as Greece?

[Lindytindy]

07:14 PM on 10/11/2011

Many other governments will fall as they try to push more bailouts. Iceland may be one of the last functioning democracies left. They refused, defaulted and are doing fine.

[John michael Adams]

07:45 PM on 10/11/2011

Iceland is not doing fine. lol who told you they are? Do you live there? If no, then you do not really know the real situation there. They still face debts and they need to pay The Netherlands, UK, Germany for its external debts.

[Little Princess]

02:20 AM on 10/12/2011

Well, I've seen from your commens you kinda not love the Germans. Still, fact is Iceland doesn't have to pay any to "the Germans".

[M Cubed]

07:47 PM on 10/11/2011

A vote of no confidence in a parliamentary system does not mean anarchy in the streets. It just means a new government is formed under the same old rules. It does not mean democracy is going away, just a change from conservative to a liberal government.

[RedneckDem]

07:06 PM on 10/11/2011

Somehow getting a bailout from the banks that caused all of this is unsettling. Most European countries had very manageable deficits before the American real estate bubble and the unveiling of various financial weapons of mass destruction. While Wall Street was selling the world derivatives of bundled real estate loans, they were betting on them to fail.

Now Wall Street and the mega multi-nationals, who are sitting on trillions, will swoop in on these struggling countries and apply "disaster Capitalism" (i.e. parasitic capitalism) thru loans with open ended terms. The free market capitalists will walk off with the countries assets and any attempt to stop will them, or create anything fair, will be labeled "socialism".

[RedneckDem]

07:08 PM on 10/11/2011

The free market capitalist­s will walk off with the countries assets and any attempt to stop them, or create anything fair, will be labeled "socialism­".

Typed too fast...

[Lindytindy]

07:16 PM on 10/11/2011

Capitalism is destroying itself, eating it's young. What comes next is communism, resurgent in Russia and China, probably in many other places as well, perhaps Greece. Communism doesn't have to be on the Stalinist or Maoist model, that is not written in stone. Vietnam seems to be doing fine with communism.

[Greg Mirsky]

07:49 PM on 10/11/2011

Fairness is not in re-distribution but in providing opportunities, enabling competition.
You can view "free market capitalists" as external management of a failed enterprise, of a failed state. Would you object when a state removes elected councilors and/or major to pass all powers to an external manager? You haven't heard of failed school districts? So Slovakia, as Greece and some other "too much Socialism" countries have failed and are in need of economical intervention. Ask yourself why Slovakia failed while Czech Republic is doing fairly well, better.

[SirRealDeal]

07:14 PM on 10/11/2011

f and f for understanding the roll Wall Street and the housing bubble has played in the world economic problems.

[jetscan]

07:55 PM on 10/11/2011

x2

[alpina]

06:35 PM on 10/11/2011

They see the writing on the wall and don't want to get stuck with the check for countries like Greece who have been living beyond their means and expect to be bailed out, without having changed a single thing about their system/economy/spending. I suspect the Eurozone will get divided proving that the UK was right all along.

[garystartswithg]

06:56 PM on 10/11/2011

Don't get too sanctimonious -- the Euro is still stronger than the dollar, and thats what it was set up for.

[John michael Adams]

07:46 PM on 10/11/2011

the Euro is stronger because they manipulate the currency. Why would the poorest country in Europe, Slovakia, get the same currency value as Germany? Manipulation.

[alpina]

11:06 PM on 10/11/2011

The strength of the euro must be why so many global investors are buying long term U.S. t-bills. Our crappy, mismanaged economy is still more stable than the euro.