Slovakia to join EU-IMF fund, reject Greek loan

EUOBSERVER / BRUSSELS – The new Slovak government plans to back a €750 billion EU-IMF stabilisation mechanism for eurozone countries but is to back away from a separate euro-area countries’ bail-out loan to Greece.

“The coalition parties have agreed [to this] in line with a proposal from the minister of finance,” Slovak Prime Minister Iveta Radicova told journalists after a meeting of the ruling coalition parties in Bratislava on Wednesday (14 July), with the government set to formally approve the decision in a vote on Thursday.

According to Ms Radicova’s spokesman, Rado Bato, Slovakia will demand a “binding agreement” of the eurozone countries that they reform their banking sector and the EU’s Eurostat statistics office, amongst other measures.

Without such an agreement, Slovakia will not join the mechanism, he said.

Richard Sulik, the speaker of the Slovak parliament and a member of the ruling coalition partner, the Freedom and Solidarity party, added: “We will agree with this mechanism, because we do not want to block the whole EU. We do not want to glorify this agreement, because it is not a good thing, but we will vote for it.”

Following the government’s formal approval on Thursday, the other participating countries will be able to issue bond guarantees based on the fund. But it will also have to undergo a parliamentary vote in Slovakia in order to complete the country’s internal ratification process.

In a related move set to annoy EU leaders in Brussels, the Radicova coalition on Wednesday also agreed to back out of a bail-out fund for Greece, which would have seen Bratislava paying €820 million into the pot.

Based on current projections, three out of four coalition parties in parliament are set to vote against the Greek bail-out, with the remaining party to abstain.

Slovakia’s decision to stick to its larger EU-IMF commitment is in line with requests made by European Commission President Jose Manuel Barroso during the prime minister’s visit to Brussels on Monday and Tuesday.

“The previous government assumed a very clear commitment and we certainly expect commitments to be honoured. This is a basic rule of the European Union and of international policy,” he said.