There’s been a lot of confusion today about Slovakia’s role in passing a plan to expand the European Financial Stability Facility.
The tiny country is the last to vote on the EFSF, the linchpin of the second Greek bailout and the backstop against contagion spreading like wildfire throughout the eurozone.
For up-to-the minute updates, check out our live coverage of the decision.
Here’s what’s really going to happen in Slovakia today:
– Disagreement over the expansion plan lies within the parties of the governing coalition. Prime Minister Iveta Radicova, her SDKU-DS party, and two of the other three parties in her coalition are in favour of the EFSF plan. Together the three parties control 57 seats.
– The coalition’s Freedom and Solidarity Party (SaS) (22 seats) disagrees with the EFSF expansion in principle, and has conceded that it will only pass the plan if provisions for a permanent replacement to the EFSF — the European Stability Mechanism — are omitted. This is unacceptable to both Europe and the rest of the governing coalition. The SaS has threatened to abstain from the vote.
– Robert Fico — the head of the popular opposition party Smer (62 seats) — said that although his party will not approve the plan on a first vote, it does agree with the EFSF expansion in principle.
– Fico has told the press that his party will affirm the plan on a later vote, but that such an agreement will entail the dissolution of the governing coalition. He said during the debate, “We say no” to the current government but “We say yes” to the EFSF. U.S. markets went positive on this.
– Without full accord from the coalition, coalition votes in favour of the plan will not outnumber Smer’s nays in the first vote.
– PM Radicova has said that a second vote will be a confidence vote. The Smer party will not vote in favour of this.
– Radicova will eventually seek support from the Smer party in exchange for toppling the government, and a Smer-approved vote will pass overwhelmingly.
– The success of the EFSF plan now appears assured. Pressure from Europe is too great not to pass the plan for the sake of maintaining the government, particularly when consensus within the parliament favours approval.
– Unless the SaS does a last-minute about-face, the EFSF will pass and the governing coalition in Slovakia will fall.
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