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European Union

Slovakia passes eurozone bailout fund

Slovak lawmakers have overwhelmingly voted in favor of expanding the eurozone's EFSF bailout fund, just days after initially rejecting the proposed expansion of the fund and ousting the government in the process.

Flags of Slovakia and the European Union blow in the wind in front of the Parliament building

Slovakia was the last eurozone nation to vote on the fund

The Slovak parliament passed a measure on Thursday granting its consent to an expansion of the eurozone's EFSF bailout fund to help combat the ongoing debt crisis afflicting Europe.

Bratislava initially voted down the key reform late Tuesday and ousted the government in the process after Prime Minister Iveta Radicova tied the ballot to a vote of confidence in her administration.

In stark contrast to that first vote in which only 55 lawmakers supported the proposal, this time around 114 parliamentarians lent their support to the plan, whilst 30 voted against it and three abstained.

The proposals will see the lending capacity of the European Financial Stability Facility (EFSF) increased to 440 billion euros ($600 billion). Under new rules agreed to by eurozone leaders this summer, the fund will be allowed to buy states' debt and recapitalize banks facing solvency troubles.

The second Slovak vote on the EFSF was passed after the Slovak opposition Smer-SD party reached a deal with parties in the outgoing coalition in exchange for an early general election in March.

Smer leader Robert Fico said he was "happy the eurozone fund has been approved and Slovakia has returned to the map of Europe."

Slovak Prime Minister Iveta Radicova

Radicova tied the fund decision to a vote of confidence in her government

Outgoing Finance Minister Ivan Miklos said, meanwhile, that "although the price was high, I'm glad we made good on our obligations and we're not blocking this tool designed to prevent the eurozone crisis, a tool that is generally considered inevitable."

Last member to vote

Slovakia was the last of the eurozone's 17 member states to sign off on the EFSF reforms, expanding the size and powers of the fund, which is designed to boost Europe's defenses against the debt crisis.

"Today the enhanced European Financial Stability Facility is fully operational after Slovakia's ratification," said European Commission President Jose Manuel Barroso and EU President Herman Van Rompuy in a joint statement.

"The EFSF provides us with a stronger, more flexible tool to defend the financial stability of the euro area. This is in the clear interest of every one of the 17 member states directly concerned, as well as for the wider European Union."

The difficulty acquiring a mandate from all 17 eurozone parliaments to expand the EFSF fund has been emblematic of the complications the single currency bloc faces in responding to the debt crisis hitting economies such as Greece, Ireland, Spain and Italy.

Although Slovakia, with 5.4 million people, accounts for less than 1 percent of the eurozone's output, its parliament could have effectively vetoed the EFSF measure.

Author: Darren Mara, Spencer Kimball (AP, dpa)
Editor: Martin Kuebler

DW.DE