Could Slovakian Laissez Faire Diehards Hold Back the Expansion of the EFSF (Euro-zone bailout fund)?

Slovakia’s Freedom and Solidarity Party, one party in Slovakia’s four party ruling coalition, has threatened opposition to Slovakian approval of the expansion of the European Financial Stability Facility (EFSF) rooted in a dedicated belief on Freedom and Solidarity’s part in laissez faire capitalism. Arguing that the expansion of the EFSF is the first step on the road to socialism, the Freedom and Solidarity Party’s opposition to it guarantees it will fail in the Slovakian parliament as the remaining members of the ruling coalition do not have the votes to pass it alone. Richard Sulik, leader of the Freedom and Solidarity Party did offer Prime Minister Iveta Radičová a compromise in favor approval of the EFSF on the grounds that each future bailout be subject to approval by future parliaments. Sulik has long been an opponent of the Euro project, often criticizing it on his personal blog and calling for development of what some would call a “Plan B” for Slovakia out of the Euro entirely. Without compromising with the Freedom and Solidarity Party, the government is left with the option of working with the opposition party, the Party of European Socialists, but this cooperation would be predicated on the call for new elections which the Party of European Socialists would handily win; thus, Slovakia’s first female Prime Minister is faced with either onerous compromise with a coalition partner or the loss of her government entirely. The European Financial Stability Facility was created by Eurozone member states and financed by them to deal with the sovereign debt crises that began to course through the Eurozone beginning in 2008. Created on May 9th, 2010, the EFSF can distribute bonds with assistance from the German Debt Management Office to raise money to loan to member states, recapitalize banks or purchase sovereign debt.

[LA Times, The Economist]

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