Wednesday, October 12, 2011

Slovakia Caves: Agrees to EFSF Euro Bailout

Que the inkjets and keypads.  Did you think Slovakia was really going to get in the way of global quantitative easing?

-- EFSF approval secured following agreement on election date
-- Outgoing coalition government, opposition have 115 votes out of 150 to pass EFSF comfortably
-- Slovakia is last euro zone country to endorse the EUR440 bailout fund revamp

BRATISLAVA (Dow Jones)--Slovak party leaders Wednesday brokered a deal paving the way for the country's parliament to approve as early as Thursday the euro-zone's enhanced government bailout fund, part of Europe's push for new defenses against a spreading debt crisis.
The deal became possible after party members of the ruling coalition agreed to the opposition's demand to set a day for new elections, now expected to be held in March next year.
Slovakia's right-of center government collapsed late Tuesday after a divided parliament voted against endorsing changes to the European Financial Stability Facility. A vote of confidence had been linked to the EFSF vote, which has split Slovak politicians wary of using tax payers funds to prop up banks in other European countries.
The vote outcome left Slovakia as the last holdout among the 17 euro-zone countries and has thrown the country into political turmoil. It also appeared to complicate, at least temporarily, the European leaders' aim of reaching a breakthrough deal at their Oct. 23 summit on a package of measures to tackle the crisis, including the recapitalization of European banks, a push to resolve Greece's debt crisis, and new proposals to maximize the bailout fund's impact.
"I think that it is possible to endorse the EFSF finally by Thursday," said Mikulas Dzurinda, the chairman of the Slovak Democratic Christian Union, or SDKU-DS, the largest party in the outgoing coalition cabinet.
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