Eurozone member Slovakia will vote on financial aid for debt-laden Greece only after its June election, the country's prime minister said on 3 May, insisting that Athens must do its homework on spending cuts before receiving any Slovak cash.
Left-wing Prime Minister Robert Fico is seeking re-election on 12 June and aid for Greece – a country with higher wages and wealth than new euro member Slovakia – has become a campaign issue, as the opposition rejects the package.
Greece won eurozone finance ministers' approval on Sunday to draw €110 billion in loans over the next three years from eurozone partners and the International Monetary Fund.
Fico, who has expressed doubt about Greece's ability to implement the required savings measures, reiterated his earlier warning that the Slovak portion of the aid – around €800 million – would not come automatically.
"My government will not sign a blank cheque for Greece," Fico said.
"If we see no cuts in wages, pensions or social standards in Greece, we have no intention to talk with Greece about a bilateral loan," he said, adding that Athens must do its homework first.
The finance ministry has said changes to laws on the state budget and budgetary principles were needed to approve the aid in the parliament. Some opposition parties, which trail Fico's Smer in opinion polls, object to the aid and are calling for a special meeting of parliament before the election, warning that such loans would lead to lax fiscal policies.
"We say an ultimate 'no' to this aid," Iveta Radicova, election leader of the strongest right-wing opposition party SDKU, said on Monday.
Parliaments in France, Germany approve aid
In the meantime, the French National Assembly approved during the night between Monday and Tuesday the bailout package for Greece, while the German government began gathering political support for Germany's contribution ahead of a parliamentary vote on Friday.
EU leaders will meet on Friday (7 May) to exchange information on progress in the parliamentary approval process for the loans in their respective countries.
In a statement, French President Nicolas Sarkozy said Friday's summit should also focus on drawing lessons from the crisis. The meeting "should allow to confirm at the highest level the support of eurozone member states to Greece and have a first exchange of views on the lessons to be drawn in order to strengthen the governance and cohesion of the euro zone," reads the statement.
The principle of the plan to aid Greece is that eurozone countries borrow money on their behalf, and then lend it to Greece at 5% interest. On her own, Greece could be charged interest rates up to 11%, which is unprecedented for a eurozone country.
Most countries, but not all, borrow sums at an interest rate lower than 5%. Portugal, for example, would be charged a higher interest rate. The eventual loss incurred by countries such as Portugal is compensated by gains by countries which borrow at a rate lower than 5%. Germany for example borrows with 2% interest, and Belgium with 3%.
(EURACTIV with Reuters.)