Slovak politics behind anti-euro bailout vote

Slovak and European Union flags fly next to Bratislava Castle Has Slovakia fallen out of love with the euro?

The rejection by the Slovak parliament of proposals to bolster the European Financial Stability Facility (EFSF), designed to protect weaker economies in the eurozone from the sovereign debt crisis, plunges Slovakia into turmoil, reports the BBC's Rob Cameron.

Has Slovakia, a small country that has clearly benefited from EU membership, suddenly become a nation of Eurosceptics?

Have Slovaks fallen out of love with the euro, less than three years after they became only the second former communist country (after Slovenia) to adopt it? Is Slovakia deaf to the calls of the financial and political world that the bailout fund must be bolstered to inoculate the eurozone from Greek contagion?

Not exactly. Enthusiasm for EU and euro membership is dampened, but it is still there. And Slovaks are as fully aware of the stakes as anyone else in Europe.

The answer lies in Slovakia's complex political landscape.

There are 150 MPs in the Slovak Parliament, known as the National Council, a squat concrete building that lurks behind the imposing edifice of Bratislava Castle. The majority of them - government and opposition alike - support beefing up the EFSF. So why did it fail?

Hard sell

It has been a difficult sell from the outset. Many in Prime Minister Iveta Radicova's four-party centre-right governing coalition expressed deep misgivings when the eurozone agreed in July to increase the EFSF to 440bn euros (£380bn) and give it new powers, including the ability to buy sovereign debt on secondary markets.

Start Quote

It's impossible to explain to a Slovak pensioner that he or she has to contribute - in the form of higher VAT for example - towards Greek pensions. Or towards Italian MPs' salaries, the highest MPs' salaries in Europe.”

End Quote Richard Sulik Freedom and Solidarity party

Gradually, as, one by one, the rest of the eurozone countries ratified the proposals and the debt crisis deepened, most of the Slovak coalition came around - except Richard Sulik, leader of the neo-liberal Freedom and Solidarity party, and his 21 MPs.

"There's a lot of talk at the moment about solidarity, that Slovakia must show solidarity with other countries," Mr Sulik told foreign journalists last week.

"The average pension in Slovakia is less than 400 euros (£350). The average pension in Greece is 1,400 euros (£1,200) - three, four times higher," Mr Sulik said.

"It's impossible to explain to a Slovak pensioner that he or she has to contribute - in the form of higher VAT for example - towards Greek pensions. Or towards Italian MPs' salaries, the highest MPs' salaries in Europe," he added.

"That's not solidarity. That's a perverse concept of solidarity," he explained.

That, in a nutshell, is the argument of those like Richard Sulik who oppose bolstering the bailout fund. Better to let Greece go bankrupt, he says, expressing a sentiment that many - although not most - Slovaks share.

Observers assumed, and Brussels hoped, that Mr Sulik would crumble under the weight of European pressure. He did not. Compromises - from both sides - were offered and rejected, although few were realistic. Mr Sulik stood his ground: no bailout.

Misplaced hopes

Some placed their hopes in Robert Fico, former prime minister and leader of the leftist opposition, who is known to support the EFSF.

NEW BAILOUT MEASURES

Changes to the bailout fund, the EFSF, include:

  • Increasing the fund's effective lending capacity to €440bn (£380bn)
  • Giving it the power to inject capital into banks
  • Allowing it to buy the bonds of distressed governments on the open market

But Mr Fico sensed an opportunity to wound and perhaps bring down the government, hastening early elections he is likely to win. His party, Smer, would abstain from the vote. At least this vote.

All of a sudden, Slovakia began appearing on the front pages of the world's newspapers.

Foreign news channels began booking parking space in front of the parliament. Satellite vans began lumbering up the steep hill to the castle.

Analysts began looking beyond Tuesday's vote, to a second attempt.

Indeed, what will happen next?

A second vote will probably be held within days, a week at most. With Mr Ficos's support, that vote is likely to succeed.

With the EFSF ratified, the satellite dishes will be retracted, the generators silenced, laptops snapped closed. The world's media will hitch their wagons and move on, perhaps to Brussels, and the next euro crisis summit.

Slovakia - "the little big country" as it styles itself to tourists - will return to obscurity. Early elections will be planned.

Richard Sulik will be left to contemplate his future. And Slovakia will go down in history as the last eurozone country to ratify the bailout fund, and the first one to lose a government over it.

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