The Slovak parliament approved expansion of Europe’s temporary bailout fund on Tuesday night but not before losing confidence in Prime Minister Iveta Radičová’s government. She tendered her resignation to compel the left-wing opposition to vote with the ruling party.
Eurozone leaders agreed to expand the €440 billion European Financial Stability Fund this summer to enable it to not only provide aid to heavily indebted nations in the periphery of the currency union but also to respond with short-term lines of credit to banks and governments in financial difficulty.
Slovakia was the last eurozone nation to ratify expansion of the rescue fund which has been used by Ireland and Portugal to finance their borrowing costs.
The vote broke up Radičová’s four party coalition. The junior Freedom and Solidarity party, a libertarian and Euroskeptic platform, abstained from an initial vote on expanding the EFSF. The three conservative factions in the coalition did approve the measure as did the opposition Social Democrats during a second vote. They had conditioned their support on early elections however which they hope will return them to government.
Slovakia, one of the poorest members of the eurozone, joined the single currency area in 2009 and voted against the Greek bailout the next year when it was keen to point out that average pensions and salaries in Slovakia are far lower than those in Greece, even after they were cut in austerity measures. Slovakia did approve the creation of the EFSF in May of last year.