Slovakia fails to agree on European bailout fund

By Karel Janicek

Associated Press

Published: Monday, Oct. 10 2011 11:43 a.m. MDT

BRATISLAVA, Slovakia — Slovakia's governing coalition failed on Monday to strike a deal to prevent the collapse of a continentwide plan to rescue heavily indebted European nations.

Prime Minister Iveta Radicova said her four-party coalition, which met for three hours, was unable to agree on a compromise deal.

The 17 nations that use the euro must all approve expanding the powers of the bailout fund, which is designed to shore up Europe's defenses against the debt crisis, which already has seen three countries bailed out and Greece edging toward default.

Fifteen governments, including the power house economies of Germany and Frandce, already have approved the package of measures agreed by eurozone leaders during a special summit in July. Only Slovakia and even tinier Malta have not backed the plan.

Malta was due to vote later Monday and was expected to approve the bailout fund plan, leaving Slovakia the only undecided euro member.

"I have to say ... that the coalition partners have failed to reach an agreement," Radicova said in a brief statement about her governing coalition's talks on Monday.

She declined to answer questions, but said the coalition's talks will continue Tuesday, the day Slovakia's Parliament is scheduled to vote on the EU bailout fund.

Slovakia, a nation of 5.5 million, would contribute about 1 percent or €7.7 billion. With the help of EU funds and foreign investments, it has benefited significantly from its membership in the eurozone and the EU and become a leading European car exporter.

Last week Radicova warned that "serious, dramatic, deepening crisis" in the eurozone "needs a quick solution." She also said Slovakia is too small a country to face the eurozone's debt crisis and its consequences alone.

The outcome of the Slovak parliamentary vote is uncertain because a junior member of the four-party governing coalition is strictly opposed to boosting the fund.

The party's chairman, Richard Sulik, in a recent interview with The Associated Press, called the expanded bailout fund "a road to hell" and vowed anew Monday to block it.

Ahead of Monday's coalition meeting at the headquarters of his party in Bratislava, Sulik said the fund "is a story about wasted time." He said: "It's been in place for a year and the situation is only getting worse."

He said his party is trying to find a compromise deal that would prevent Slovak taxpayers from "paying a cent" but its proposal was rejected by the other parties. The proposal called for the creation of a parliamentary committee that would review any future loans from the fund with a right to veto it.

Sulike declined to comment after Monday's coalition talks.

Associated Press video journalist Adam Pemble in Bratislava contributed.

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