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Slovak SaS Party Won’t Change Its Position On Voting Against EFSF Expansion
With the zEURQ.BB surging, it appears nothing can possibly rain on Europe's parade today. Nothing, perhaps, except for the poorest country in the Eurozone, Slovakia, which as we detailed over the weekend appears poised to destroy the Eurozone, the Euro, and force a fresh restart, one that actually works. As Reuters reports, "Slovakian coalition leaders meet on Monday in a last-ditch bid to reach agreement on widening the mandate of the euro zone's bailout fund, under increasing pressure from turmoil in euro zone banks and a shift in public opinion at home. The small liberal Freedom and Solidarity (SaS) party argues that, as the zone's second poorest member, Slovakia should not have to bail out other euro zone countries, but it says it is still open to talks. The coalition parties called a meeting for 4 p.m. (1400 GMT) ahead of a vote on the EFSF in parliament on Tuesday, a spokesman for the SaS said. The party has so far said it will vote against the EFSF expansion." Alas, that was 4 hours ago. We just got an update from Bloomberg: Slovak SAS Party Says Won’t Change Position on EFSF. It may be time to book those EURUSD profits and sit it out for the rest of the day as it can get quite messy.
More from Reuters:
Coalition leaders were to meet again on Monday to discuss giving extra powers for the European Financial Stability Facility (EFSF) agreed by euro zone leaders in July to avoid a messy Greek default and a meltdown in other debt-laden members.
The small liberal Freedom and Solidarity (SaS) party argues that Slovakia, with Malta the only euro zone state yet to have approved the plan, should not have to bail out other euro zone countries.
If it sticks to its stance, Prime Minister Iveta Radicova may have to sacrifice her coalition in order to win opposition support for the plan.
Radicova has said she would see the EFSF plan through and party officials have said she may tie the measure to a vote of confidence. The opposition has said it would demand the coalition quit in exchange for its votes in favour of the package.
Coalition parties called a meeting for 4 p.m. (1400 GMT) ahead of a vote on the EFSF in parliament on Tuesday, a spokesman for the SaS said, but preparatory talks have so far led to no agreement.
"We don't have an agreement with the (Freedom and Solidarity party) SaS. They turned down the prime minister's offer. We will try to modify it," a government source, who spoke on condition of anonymity, told Reuters.
....
Political analyst Samuel Abraham said he believed Sulik would back down in the end to save the coalition, especially because the EFSF would in the end get approved anyway.
"I think there will be a solution found where he will be able to save face," he said.
Radicova has pledged to ratify the EFSF ahead of European leaders' summit on the weekend.
And for all who missed it, here is the must read interview with Richard Sulik on why he will vote against the EFSF.
From Spiegel:
Only two countries, Malta and Slovakia, have yet to ratify the expansion of the euro bailout fund. Its fate may be in the hands of a minor Slovak party headed by Richard Sulik. In an interview, the politician explains why he hopes the fund will fail and what he sees as the only way to save the euro.
SPIEGEL ONLINE: Mr. Sulik, do you want to go down in European Union history as the man who destroyed the euro?
Richard Sulik : No. Where did you get that idea?
SPIEGEL ONLINE: Slovakia has yet to approve the expansion of the euro backstop fund, the European Financial Stability Facility (EFSF), because your Freedom and Solidarity (SaS) party is blocking the reform. If a majority of Slovak parliamentarians don't support the EFSF expansion, it could ultimately mean the end of the common currency.
Sulik: The opposite is actually the case. The greatest threat to the euro is the bailout fund itself.
SPIEGEL ONLINE: How so?
Sulik: It's an attempt to use fresh debt to solve the debt crisis. That will never work. But, for me, the main issue is protecting the money of Slovak taxpayers. We're supposed to contribute the largest share of the bailout fund measured in terms of economic strength. That's unacceptable.
SPIEGEL ONLINE: That sounds almost nationalist. But, at the same time, you've had what might be considered an ideal European career. When you were 12, you came to Germany and attended school and university here. After the Cold War ended, you returned home to help build up your homeland. Do you care nothing about European solidarity?
Sulik: If we now choose to follow our own path, the solidarity of the others will also crumble. And that would be for the best. Once that happens, we would finally stop with all this debt nonsense. Continuously taking on more debts hurts the euro. Every country has to help itself. That's very easy; one just has to make it happen.
SPIEGEL ONLINE: Slovakia's parliament is scheduled to vote on the bailout fund expansion on Oct. 11. How do you predict the vote will turn out?
Sulik: It's still open. The ruling coalition is composed of four parties. My party will vote "no"; the other three coalition parties intend to say "yes." What the opposition says is decisive.
SPIEGEL ONLINE: The Social Democrats have offered your coalition partners to support the reform in return for new elections. Do you think the coalition is in danger of collapse?
Sulik: I don't see any reason why it would.
SPIEGEL ONLINE: What will you do should the EFSF reform pass despite your opposition?
Sulik: For Slovakia, it would be best not to join the bailout fund. Our membership in the euro zone, after all, was not conditional on us becoming members of strange associations like the EFSF, which damage the currency.
SPIEGEL ONLINE: If the euro only causes problems, why doesn't Slovakia's government just pull the country out of the euro zone?
Sulik: I don't see the euro as the problem. It's a good project. Everyone involved can benefit from it -- but only if they stick to the ground rules. And that's exactly what we're demanding.
SPIEGEL ONLINE: Which ground rules should we be following?
Sulik: We have to observe three points: First, we have to strictly adhere to the existing rules, such as not being liable for others' debts, just as it's spelled out in Article 125 of the Lisbon Treaty. Second, we have to let Greece go bankrupt and have the banks involved in the debt-restructuring. The creditors will have to relinquish 50 to perhaps 70 percent of their claims. So far, the agreements on that have been a joke. Third, we have to be adamant about cost-cutting and manage budgets in a responsible way.
SPIEGEL ONLINE: Many experts fear that a conflagration would break out across Europe should Greece go bankrupt and that the crisis will spill over into other countries, including Portugal, Spain and Italy.
Sulik: Politicians can't allow themselves to be pressured by the financial markets. Just because equity prices fall and the euro loses value against the dollar is no reason for giving in to panic.
SPIEGEL ONLINE: But do you really believe that politicians can calm the financial markets by stubbornly sticking to their principles?
Sulik: Let's just ignore the markets. It's ridiculous how politicians orient themselves based on whether stock prices rise or fall a few percentage points.
SPIEGEL ONLINE: You're not afraid that a Greek insolvency could mark the beginning of the crisis instead of the end?
Sulik: No. There's not going to be a domino effect along the lines of "first Greece, then Portugal and finally Italy." Just because one country goes broke doesn't mean the other ones automatically will.
SPIEGEL ONLINE: Nevertheless, banks could run into significant problems should they be forced to write down billions in sovereign bond holdings.
Sulik: So what? They took on too much risk. That one might go broke as a consequence of bad decisions is just part of the market economy. Of course, states have to protect the savings of their populations. But that's much cheaper than bailing banks out. And that, in turn, is much cheaper than bailing entire states out.
SPIEGEL ONLINE: Does one of your reasons for not wanting to help Greece have to do with the fact that Slovakia itself is one of the poorest countries in the EU?
Sulík: A few years back, we survived an economic crisis. With great effort and tough reforms, we put it behind us. Today, Slovakia has the lowest average salaries in the euro zone. How am I supposed to explain to people that they are going to have to pay a higher value-added tax (VAT) so that Greeks can get pensions three times as high as the ones in Slovakia?
SPIEGEL ONLINE: What can the Greeks learn from the reforms carried out in Slovakia?
Sulik: They have to make cuts in the state apparatus. The Slovaks could also give them a few good ideas about the tax system. We have a flat tax when it comes to income taxes. Our tax system is simple and clear.
SPIEGEL ONLINE: One last time: Do you honestly believe the euro has any future at all?
Sulík: I believe the euro has a future. But only if the rules are followed.
Interview conducted by Maria Marquart
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all of the ZH commenters saying that they're sitting with their pop corn...
NOW is the time!
deleted
make that popcorn with iodized table salt
I like MSG on my popcorn.
for flavor, better use some of that iodine iodized oil as well
The current coalition consists of SDKU(28), KDH(15), SaS(22) and Most-Hid(14). The opposition Smer has 62 seats. 76 votes are required. If Smer votes for the bill, it still has a chance to pass.
Please NO, let the madness STOP!
Democracy put to a real test, not something we are used to in the 'West'
Hell no. Slovakia is toast for the other euromembers. They'll find a workaround. No crisis, no collapse. BTW: Dexia stock has a quite good day. Not so bad, that is.
The dillusion continues with Amazemennt. Reality is not your strong suit..
You'll see I'm right.
This is just posturing......no an attempt to extort money from the EU before they roll over and vote for the expansion of EFSF.
Or so you hope, because otherwise you get the belt!
they'll approve it, the bribes just aren't big enough yet.
I have to agree. If the last three years of 'Crucial' votes that came with a big 'Will they/won't they' build-up and went having delivered precisely the result TPTB would have wished have taught us anything, it is that all politicians everywhere can be bought/threatened to do as they are told.
I do not believe these guys in Solvakia are any different.
An amazing. unexpected and totally unforseen change of opinion will occur among the Solvakian parliamentarians sometime before the vote actually takes place and it will pass with probably 95% voting for and a few token votes against - just for show.
Agreed. If Slovakia should fail to approve it tomorrow, I would eat my underpants.
If you're a chick, I'd like to see that. Well, maybe. You have a pic, by chance?
Ah, nevermind. Slovakia will fold to TPTB. It was an interesting visual, though.
Slovakia will vote yes when the pot is sweetened, yes. This is typical parliamentary system positioning, where the tiny parties hold the system hostage - Europe is quite familiar with parliamentary democracies, obviously, where people in the US don't understand the minority party having so much control.
No different than the Obama healthcare whore from Louisana and the bum fom Nebraska who talked a good game and held up the deal but then sold out to Pelosi and Reid.
WD, they will fold if those in the SaS party happen to get on a plane.
If they stick to their guns, the Krauts are "taking care" of them...
Just like Iceland?
Sidenote: they can "retry" the vote - up til the EU-Summit -- which (coincidence) was just delayed for a week (-> Oct, 23rd).
Clearly then, they're terrorists and deserve to be dealt with as such. Like those horrible Icelandic.
Sulik FTW!
We are now very, very important on the global stage. Without us you'd all be in deep doo doo. You owe us a million thanks.
Does Slovakia rhyme with Sarajevo?
If it needs to
Gotta love SPIEGEL - Not wanting your group to have to subsidise the lifestyle of some other group is (eeeekkk!) nationalist...
And not to forget racist!
Oh but theyre so fancy and ADVANCED over in the Eurozone though!
Has it just been approved or something? Or more rumours of rumours?
Well Germany and France will change the rules it be OK
Jesus, I don't think I have ever seen such biased questioning.
Yeah - that first question ranks alongside 'Have you stopped beating your wife yet?' as an opening gambit.
This is what is known in Pro-EU circles as 'Fair and balanced reporting', and elsewhere as 'Propaganda'.
seems markets are not taking the Slovakia threat seriously.
'The Markets' are now just hockey-helmeted retards chasing a greased football.
I hope theu pull it off...it would be nice to see one country not slaves to the banksters.
quite the opposite actually...the move on the zeuro is staggering
DAX is soaring 40pts on "it" - after a boring day so far
ALL IS WELL - MOVE ALONG. </sarc>
Dow +300 on the news that Europe is in total collapse! I love this bizzaro market!
USD down 1.5%....and the crowd goes wild!
USD down because EUR is up because Europe banks will be bailed out
back door by the Fed via IMF.
95% these market moves are currency moves.
Am I incorrect here?
Right, the bankrupt will bail out the bankrupt again...uh huh.
Awesome! You hang tough there Slovakia!
"Not change their position"
How can this be. They are politicians....of course they will change their position. Wanna bet?
Well Iceland never changed their position.
Yes only because there was a real possibility that their politicians would have been dragged into the street and beaten to death if they had. Slovakia's citizens probably aren't that motivated nor was any other country in the world from what I can see except for maybe Greece, although even that is debatable. Even my beloved kin the Irish rolled over and took it up the pooper without nary a groan. Pathetic. Slovak SaS will cave when their price is met. You'll see.
Yea we'll see about that.
Not to worry, Slovakia will turn out well after the dust from the collapsing Euro settles! Germany has their back! Go Duetschland!
...if I recall this is known as ''the fly in the ointment'' experience. http://www.youtube.com/watch?v=-Jk1aJqRTRM
Market will Rally hard today as bailout/nationalization mania sweeps. The question is when will the sheeple get tired of the nightmare? Perhaps a hard winter will push them over the edge.
Obvious in the US what has happened.
http://www.sentierresearch.com/pressreleases/SentierResearch_PressReleas...
So basically all of this "resistance" is irrelevant?
Right, it requires 100% yes vote from all members for passage....however theres a provision if a few little guys stick to their 'no' vote, it will pass anyway.
Yea whatever. Now lets see the bankrupt bail themselves out some more...what a retard circus.
Sounds like Slovakia is about to be included in the axis of evil, as well as be put on the terrorist watch list.
If their politicians were actually brave enough to vote no, then you can pretty much guarantee that NATO would be stepping into liberate the people of Slovakia from their terrorist regime.
SaS party just kicking back and waiting until their price is met just like Merkel's obviously was when she changed her ways real quick last year out of the blue. Either that or the alien mind control device changed it for her. These guys will cave, you'll see.
Slovakia...like a drunk who has hit bottom, is completely sane and sober vs. the rest.
FECALSS like PIIGS...might be up and coming if this mess continues.
Excellent brinksmanship, no telling what goodies he gets in the end. I've changed my mind on this guy.
Did a big old Slovak Truck just run over the ESFS tin can? It's going to be hard to kick a flattened can.
Slovaks are alot smarter then people give them credit for. They got ripped apart by the Germans...then the Russkies.,..so they are more sensitive to getting punked over them some others.
BTW, where the heck is Slovakia again?
Nestled right between Austria and Poland.
Niet. Between Austria, Hungary, Ukraine. and Chech Republic.
Based on this "analysis" : Greece debt and time squeeze ratio I could not come with any reason fro the squeeze as the intuitive one that Greece has used national debt money AFTER the crisis to accelerate increase in Athens General stock prices. They were way ahead of FED in creating "wealth effect".
Greeks have always been ingenious people with lot of ideas. Now, the consequence of doing it so fast and on such a scale using debt has accelerated timeline for Greece as compared to the USA and most other countries 3 times- -that is , their stock market was already in "recovery" in October 2009 while the rest of the Europe and USA reached that level with their SLOW stimulus in July 2011.
See here comparison between Greece and USA stock markets where the abnormally speedy recovery of Greece's indexes is obvious:
Greece stock markets recovered with amazing speed
To cut it short, there are not many European countries in dire shape, there is JUST GREECE and then others which can be graduated between themselves.
So the prediction: Given the facts that:
1) EUR/USD rate will grow till the end of October /middle November as predicted here to 1,40: EURUSD, then drop back to 1,32 which is the level with Greece already priced in; (BTW, on the chart the big letters should read EUR/USD, not USD/EUR- a typo.
2) There are new companies/countries in need for artificial life support ( Dexia comes first);
3) Merkel and Sarkozy have a plan TODAY for Europe debt situation but details will be worked out by the end of OCTOBER;
Greece will default, leave Eurozone and return to drachma (GRD) during H1 of November 2011.
Could not figure out drachma to EUR ratio easily at this moment, but I guess it will be around 1000GRD/EUR. Quite soon, as EUR problems expand even without Greece, in March 2012 exchange rate will be 700 GRD/EUR, then in July 2012, around 840 GRD/EUR, than again down to 620-700 GRD/EUR. From then on, most likely, GRD and EUR rate will be relatively stable untill 2013.
It sounds pretty unbeleivable that a country would oppose the bail out. However, Sulik was pretty clear when he said:
"Sulík: A few years back, we survived an economic crisis. With great effort and tough reforms, we put it behind us. Today, Slovakia has the lowest average salaries in the euro zone. How am I supposed to explain to people that they are going to have to pay a higher value-added tax (VAT) so that Greeks can get pensions three times as high as the ones in Slovakia?"
They have the most to loose when the death star goes online. Slovakia does not want to go through another economic crisis to, as Sulik says, pay Greeks a pension that is three times as high as that of Slovkia. Also, not knowing the background of the Slovakia situation from a couple years ago, it sounds like the EU told them to piss off.
Bottom-line, pay back is a bitch.
The HFT bots were never programmed to trade on Slovak key words so the rally is on. Oil back above $85 so there goes cheap gas.
Everything is just a smoke and mirrors makret so insiders can make a killing. They know moving the Dow to 13k just wouldn't look right in the current economic climate so they are having it trade sideways by average. It has been anything but sideways, what 11 days in 70 wth less than a 100 point move. If you had a little inside knowledge of events you could have made more during the last 70 days than your whole life.
Regular guys are being destroyed but that is the goal and why they are stupid. The true insiders will always make a fortune off your back as long as you play the game.
You guys are being played. He is telling you what you what to hear. Come tomorrow my money goes down that the vote to go along with the EU.
Indeed markets will rally hard today as nothing will spoil the euphoria caused by the "solution" that is an array of nationalizations for Europe's banking institutions made possible by sweeping the "bad banks" under the rug, and of course the bi-weekly pledge from Sárközy and Merkel.
What I want to know is how is this going to play for the equity markets? They are trending in the same pattern since August, and whenever the lows are being visited, they just fire the rumour-mill via FT and up we go.
Fundamentals clearly don't matter anymore, and we've already established that said markets are in no way representative of the underlying economy, so what will take for the equities to slide down the often visited precipice?
Because I'm becoming increasingly inclined to believe that they really wont allow a repetition of the 2008 fall, and they will simply attempt to maintain a state where the "investors" are in limbo until the "risk-on" green light is being given by announcing the Eurozone's debt's über-buffer that is the EFSF.
It is clear that institutional investors are expecting for everything to be ok and will be fixed with bailouts and injections of liquidity. Isn't this why so many funds are showing losses, because they don't even hedge anymore and simply wait for the next market rally? And what will initiate it? Will a solution from Europe be enough, or will it need a part B' of QE3 by the FED to truly accomodate the next scale of "risk-on", and if that's the case, wouldn't only be facilitated under deflationary pressure, something which isn't happening right now?
Help?
Reminds me of an old movie "The Mouse that Roared'
"Best time ever to buy a house," my realtor says.
Why don't the Slovaks vote for it, then follow Greece's example, run up their debt and then hand the bill right back to the EFSF, since the only way to lose this game is to play by the rules?