Key Slovakia euro vote delayed
Slovakia, the last eurozone country left to ratify proposals to expand the critical European Financial Stability Facility, has markets on tenterhooks as the parliamentary vote was stalled by domestic policy wrangling.
One party within the ruling coalition has said it will abstain on the vote, forcing the government to seek support from opposition parties on a measure needed to help contain the Greek debt crisis.
Sixteen other eurozone countries have already approved proposals to extend the €440bn EFSF fund, which must be agreed unanimously.
A Reuters report said Slovak Prime Minister Iveta Radicova put her government on the line by tying a vote on the size and powers of the EFSF to a confidence motion on her cabinet. While three ruling coalition parties are willing to support the measure in exchange for local political concessions, the Freedom and Solidarity party is set to abstain.
The ratification will be put to parliament again later today, and is expected to pass. Radicova said last week she was personally committed to ratify the agreement by October 14 ahead of a meeting of euro zone leaders originally planned for the weekend. That meeting has now been pushed back to October 23.
European stock markets, and the euro itself, reflected investor nerves at the delay, falling after a recent rally. Analysts said that while the Slovak brinkmanship would not torpedo the eventual expansion of the EFSF, it would weigh on global sentiment toward the euro zone as the crisis deepened.