Wednesday, 12 October 2011

Slovaks kill the euro stone dead

Alright, not the euro, just the bailout. Or rather the expansion to the bailout. The Slovaks have handed over the original €4bn they were asked for, but then yesterday the Slovak parliament voted against the next €7.7bn they are supposed to contribute to the European Financial Stability Facility (EFSF). They understandably balked at handing money over to Greece; Slovakia is actually a lot poorer than Greece. The average wage in Slovakia is about the same as the legal minimum wage in Greece.

So that's the bailout dead then. It has to be unanimous, and one of the 17 members of euroland has said no, or more traditionally, non.

But of course this is a European vote. When you get it wrong in a European vote you're given another go. In fact you can have as many votes as you like, until you vote the right way. So in a few days the Slovak parliament will vote again and is expected to do the decent thing and hand over their cash to the Greeks (well, actually the French banks in hoc to Greece) like good little Europeans.

The Slovaks seem to have taken article 125 of the Lisbon Treaty somewhat too literally...

Article 125: The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.


See? It doesn't say you can't bail out banks.

Leader of the Refuseniks, Richard Sulik, explains his position to Der Spiegel here.

No comments: