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Slovakia not ready to sign off on EU aid fund

Published 14 July 2010
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Slovakia's parliament and the cabinet must be consulted before the country can sign off on the European Union's 440 billion euro ($554 bln) aid mechanism, new Slovakian Prime Minister Iveta Radičová said on Monday (12 July).

"We really do not agree," Radičová, appointed Slovakia's first female premier last week, said after talks with EU President Herman Van Rompuy.

A three-year bailout package for Greece includes 80 billion euros in loan guarantees from the euro zone in addition to 30 billion euros in aid from the International Monetary Fund.

The minister has also not signed off on the European Financial Stability Facility (EFSF), set up to bailout defaulting eurozone countries, comprising 440 billion euros in debt backed by national guarantees.

Luxembourg's Prime Minister Jean-Claude Juncker, who is head of the group of eurozone finance ministers, met Radicova yesterday to convince het to sign off on the facility.

Radičová said the cabinet would only meet to discuss the issue on Wednesday, meaning she would not be in a position to sign off on the EFSF aid package when European Union finance ministers meet to discuss it on Tuesday.

"I have to discuss this issue at the level of the new government and secondly at the national parliament," she told reporters. "The government will meet on Wednesday and I will open this question."

She said Slovakia also remained opposed to making a contribution to a 110 billion euro EU bailout fund for Greece.

(EurActiv with Reuters.)

Background: 

EU finance ministers agreed on 9 May to establish a rescue mechanism worth around €750 billion to protect the euro from collapsing under the weight of debt accumulated in countries such as Greece, Spain or Portugal (EurActiv 10/05/10).

The 16 countries who share the euro currency will have access to €440 bn of loan guarantees and €60 bn worth of emergency funding from the European Commission. The International Monetary Fund will also contribute roughly €250 bn to the bailout package.

Crisis-hit EU countries have adopted highly unpopular austerity measures, which in the case of Greece sparked violent street protests (EurActiv 05/05/10).

Greece's austerity measures include a two-percentage-point increase in its top value-added tax rate to 23% effective as of 1 July. In Portugal, Prime Minister José Sócrates and opposition leader Pedro Passos Coelho drew up steps on 13 May to slash Portugal's budget deficit, including 5% pay cuts for senior public sector staff and politicians, and increases of VAT sales tax, income tax and profits tax ranging from one to 2.5%.

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