Slovak parties reach deal on EFSF: report

By Martin Santa and Petra Kovacova, Reuters

BRATISLAVA–Parties in the outgoing Slovak government have reached an agreement with a leftist opposition leader on ratifying a plan to strengthen the eurozone’s EFSF rescue fund, TA3 television reported on Wednesday. Three parties in the ruling coalition struck a deal with Robert Fico’s Smer party the day after the government lost a confidence vote called in an effort to force through ratification of the European Financial Stability Facility (EFSF).

The television station gave no details of the terms of the agreement. Slovakia, whose 5.4 million people make up less than 2 percent of the currency bloc’s population and 1 percent of its total output, is the only member not to ratify the plan to increase the EFSF’s powers and fight the spreading debt crisis. Ratification by all 17 members is needed for the changes to take effect, and even as Slovak politicians wrangle over the July agreement, European leaders are considering further steps to protect eurozone banks if Greece defaults on its debts. Germany and France, the leading powers in the bloc, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit on Oct. 23. Although Fico’s Smer supports the EFSF in principle, it refused to vote for it on Tuesday because by abstaining it helped topple the already fragile government. Austrian Finance Minister Maria Feker said she had received a call from Slovak Finance Minister Ivan Miklos late on Tuesday and he had assured her there would be a quick deal. “He said he believed there will be an agreement with the opposition either tomorrow or Friday at the latest,” she told Austrian radio. Prime Minister Iveta Radicova’s cabinet will remain in office until a new administration is formed. It will formally approve EFSF ratification again at the meeting and resubmit it to parliament, a government source told Reuters. Parliament is next due to sit on Thursday afternoon, which would be its first opportunity to hold a new vote on the EFSF. In Brussels, the presidents of the European Commission and the European Council urged a speedy resolution.