Slovakia to ratify ESM by the end of June

SLOVAKIA will not stand in the of the start of the European Stability Mechanism (ESM) in July Prime Minister Robert Fico pledged that the legislation will approved by the Slovak parliament before end of June. The prime minister held a roundtable meeting representatives of the parliamentary opposition June 14 to discuss the ESM issue and the political leaders agreed that they would swap ideas how to achieve fiscal consolidation in Slovakia.

The leaders of six parliamentary parties attended the meeting and all Richard Sulík of Freedom and Solidarity (SaS) party declared their MPs will vote ratify the ESM by the end this month. SaS did budge from the position it held last October 2011 it did not support a vote previous legislation involving the European bailout mechanism that to the fall of the four-party coalition government of Iveta Radičová that SaS.

“I am very sorry [Prime Minister] Fico decided to break his head on this and obediently fulfils all the wishes coming Brussels and he doesn’t even think about would happen if we dared to say ‘let’s wait a month, let’s be hasty’,” stated Sulík, quoted by the TASR newswire.

Ratification can accomplished without any votes opposition MPs as Fico’s Smer party has more a simple majority in parliament and only that is needed to pass treaty. Smer has 83 MPs and 76 votes are required in the 150-member chamber. But the prime minister said would welcome it if other political parties helped to ensure the vote is successful and repeatedly declared the vote will be taken parliament’s June session that began on June 19.

The ESM will replace the temporary European Financial Stability Facility (EFSF) and will require some €80 billion members of the eurozone to establish a package of measures aimed maintaining the stability of the eurozone by assisting eurozone countries that having fiscal problems or difficulty in selling bonds a sustainable interest , TASR wrote.

Opposition split the ESM
If Slovakia participates in the ESM, its own public debt increase and it may be required to additional austerity measures.
Sulík commented that Fico was moving too quickly, stating that “ poorest country of Europe [Slovakia] must by June 30 by any declare here in parliament that it will save everybody around”, as quoted TASR.

The top leaders of the opposition parties in parliament did not share Sulík’s opinion.

“It is a signal,” Most-Híd chair Béla Bugár said the ESM to TASR. “We might as send a signal that we are not planning to wait.”

The opposition parties did say, , that they would like to push the final decision to late in June as possible since by it should be clear if Germany and Greece will support creation of the ESM.

Swapping consolidation ideas
The leaders of the centre-right opposition parties in the Slovak parliament agreed exchange ideas Fico and his Smer party on how to consolidate the country’s public finances.

“We have received assurance that some opposition proposals might passed,” Bugár told TASR.

Fico said Smer will assess proposals submitted by the opposition solely from an ideological of view but will look whether they are compatible the aims stated in the government’s programme statement.

“We can already say that of the opposition proposals could be backed by Smer,” Fico stated, giving an example a proposed land use plan.

both the government and the opposition parties agree that fiscal consolidation necessary, Fico stated that new revenue sources that are discussed by the opposition would only cover a tenth of the funds needed to reduce the deficit to 3 percent of GDP or less.

“We don't have systematic alternative from them so ,” Fico stated, as quoted by TASR, adding his Smer party absolutely refuses to eliminate social allowances is proposed by the opposition because it would mean taking money families with monthly incomes less that €1,500.

The opposition parties stated that the government’s efforts to reduce the budget deficit are focused on the revenue side of the budget and the government should further cut expenditures. The opposition opposes increases payroll levies and income tax rates individuals or businesses.

“Consolidation based raising taxes and payroll levies, focused on the revenue side of state budget, will affect mainly small enterprises, the self-employed, and employees: ordinary people,” stated Ján Figeľ, the chairman of Christian Democratic Movement (KDH), quoted by the SITA newswire.


Adapted and abridged from: The Slovak Spectator, June 20, 2012.