Slovakia rejects EU bailout expansion
The vote was to expand the power of the European Central Bank to create a larger bailout fund through the EFSF and all 17 nations that use the euro as a currency had to approve.
Slovakia has now thrown a monkey wrench into the bailout plans of the EU. New York Times:
With 55 lawmakers voting for the measure, 9 against it and 60 abstaining, the Slovak governing coalition failed to muster the necessary votes to pass the plan that would have required Slovakia to contribute roughly $10 billion in debt guarantees.
But the country's leading opposition party said after the government fell that it would be willing to discuss support for the fund, pointing to the eventual approval of the deal. European officials in Brussels were counting on a political solution, but also weighing the possibility of some kind of messy workaround if Slovakia failed to pass the measure.
In a news conference after the vote, the leader of the opposition Smer party, Robert Fico, said that the "government failed in its responsibility for governing and ruling, and the prime minister bears the blame for this international shame and scandal." Mr. Fico said that his party was ready to discuss forming a new coalition government now that the prime minister's party had lost the vote of confidence.
If nothing else, the unwieldy process underscored how the entire $590 billion euro stability fund, approved by the 16 other European Union countries that use the euro, could be held hostage to the domestic politics of one tiny country, in this case Slovakia. It showed as well how a measure intended to increase confidence in the euro zone could instead emerge as a telling example of the shortcomings of a system that relies on a diverse group of nations to make and execute difficult decisions.
You can almost hear them in Paris and Berlin tonight; Now what?