Slovak SaS Party Won’t Change Its Position On Voting Against EFSF Expansion

Tyler Durden's picture

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.


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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achmachat's picture

all of the ZH commenters saying that they're sitting with their pop corn...

NOW is the time!

PhD's picture

make that popcorn with iodized table salt

SheepDog-One's picture

I like MSG on my popcorn.

PhD's picture

for flavor, better use some of that iodine iodized oil as well

eigenvalue's picture

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.

Ronaldo's picture

Please NO, let the madness STOP!

Azannoth's picture

Democracy put to a real test, not something we are used to in the 'West'

LookingWithAmazement's picture

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.

maxmad's picture

The dillusion continues with Amazemennt.  Reality is not your strong suit..

eurogold's picture

This is just an attempt to extort money from the EU before they roll over and vote for the expansion of EFSF.

maxmad's picture

Or so you hope, because otherwise you get the belt!

becky quick and her beautiful mouth's picture

they'll approve it, the bribes just aren't big enough yet.

Quintus's picture

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.

eigenvalue's picture

Agreed. If Slovakia should fail to approve it tomorrow, I would eat my underpants.

WonderDawg's picture

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.

Thulsa Doom's picture

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.

Manthong's picture

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.

Hook Line and Sphincter's picture

WD, they will fold if those in the SaS party happen to get on a plane.

maxmad's picture

If they stick to their guns, the Krauts are "taking care" of them...

Fips_OnTheSpot's picture

Sidenote: they can "retry" the vote - up til the EU-Summit -- which (coincidence) was just delayed for a week (-> Oct, 23rd).

Debtless's picture

Clearly then, they're terrorists and deserve to be dealt with as such. Like those horrible Icelandic.

Caviar Emptor's picture

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. 

Mercury's picture

Does Slovakia rhyme with Sarajevo?

Mercury's picture

Gotta love SPIEGEL - Not wanting your group to have to subsidise the lifestyle of some other group is (eeeekkk!) nationalist...

PhD's picture

And not to forget racist!

SheepDog-One's picture

Oh but theyre so fancy and ADVANCED over in the Eurozone though!

Racer's picture

Has it just been approved or something? Or more rumours of rumours?

pacdm's picture

Well Germany and France will change the rules it be OK


tmosley's picture

Jesus, I don't think I have ever seen such biased questioning.

Quintus's picture

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'.

Tense INDIAN's picture

seems markets are not taking the Slovakia threat seriously.

SheepDog-One's picture

'The Markets' are now just hockey-helmeted retards chasing a greased football.

papaswamp's picture

I hope theu pull it would be nice to see one country not slaves to the banksters.

abugarance's picture

quite the opposite actually...the move on the zeuro is staggering

Fips_OnTheSpot's picture

DAX is soaring 40pts on "it" - after a boring day so far


Iriestx's picture

Dow +300 on the news that Europe is in total collapse!  I love this bizzaro market!

SheepDog-One's picture

USD down 1.5%....and the crowd goes wild! 

Pinktip's picture

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?

SheepDog-One's picture

Right, the bankrupt will bail out the bankrupt again...uh huh.

SheepDog-One's picture

Awesome! You hang tough there Slovakia!

Troy Ounce's picture



"Not change their position"


How can this be. They are politicians....of course they will change their position. Wanna bet?

SheepDog-One's picture

Well Iceland never changed their position. 

j0nx's picture

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.

SheepDog-One's picture

Yea we'll see about that.

maxmad's picture

Not to worry, Slovakia will turn out well after the dust from the collapsing Euro settles!  Germany has their back!  Go Duetschland!