Anger in euro zone as Slovakia votes against Greek bailout role

SLOVAKIA’S NEW government yesterday came under fire from its euro-zone partners, particularly Germany, after its parliament voted…

SLOVAKIA’S NEW government yesterday came under fire from its euro-zone partners, particularly Germany, after its parliament voted overwhelmingly to reject taking part in an EU aid package for the troubled Greek economy.

The German government criticised the Slovak parliament’s decision in unusually harsh terms. “All member states committed themselves politically to assistance for Greece,” said a spokesman for Chancellor Angela Merkel. “Every member relies on solidarity; solidarity is no one-way street.”

Ms Merkel will address the issue when Slovak prime minister Iveta Radicova visits the German capital on August 25th, he added.

The European Commission in Brussels also reacted angrily.

READ MORE

“It is a breach of the commitment undertaken by Slovakia in the Eurogroup,” Olli Rehn, the economics and monetary affairs commissioner, said in the wake of the vote. “I can only regret this breach of solidarity within the euro area and I expect the Eurogroup and the Ecofin Council to return to the matter in their next meeting.”

A commission spokesman said Slovakia had itself benefited from the increased financial stability that resulted from the bailout facility it originally endorsed.

He stressed the loan package to Greece was not put at risk by Slovakia, which was to provide just over 1 per cent of the total needed for the €80 billion bailout. Slovakia, which is much poorer than Greece, adopted the euro last year, and was expected to provide more than €800 million.

The idea is deeply unpopular in Slovakia. Ms Radicova, who took power after parliamentary elections in June, had long been opposed to bailing out Greece, and her predecessor, Robert Fico, had been lukewarm about the scheme.

The parliament voted yesterday by 69-2 to reject the Greek aid package. Mikulas Dzurinda, the foreign minister, explained that Greece’s troubles were the result of “irresponsible decisions” made by member states and commercial banks, and that his country was still pro-European. – (Copyright The Financial Times Limited 2010)