Slovakia Finally Approves Euro Rescue Mechanism

A general view of the plenary hall of Slovak Parliament in Bratislava, Slovakia, 13. October 2011. Photo by EPA/BGNES

The Slovakian Parliament voted in support of larger powers for the European Financial Stability Facility, alleviating fears it might set it back after an initial negative vote Wednesday.

The earlier rejection of the modified eurozone rescue mechanism was motivated by the fact that the motion was tabled together with a confidence vote for PM Iveta Radicova, who was sacked by Parliament Wednesday.

Thursday opposition leftist party Smer finally gave the approval to the euro mechanism after a date for pre-term general elections - March 10.

Slovakia was the last country to ratify the boosting of the EFSF, designed to prevent further trouble in the finances of governments maintaining the euro.

Increasing the power of the EFSF is viewed as a crucial first step towards strengthening the banking system in Europe and addressing a long-running sovereign debt crisis in Greece and several other euro zone nations.

Under an agreement reached in July, the EUR 440 B fund will have greater powers to intervene in sovereign debt markets and provide funding for banks that need to raise capital.

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