BRATISLAVA, October 13, (WEBNOVINY) — Slovakia has eventually joined the remaining sixteen eurozone countries that have already ratified the enhancement of the EFSF bailout fund. On Thursday, deputies of the Slovak parliament approved the annex to the framework agreement on the European Financial Stability Facility (EFSF) concerned mainly with enhancing the capacity of the bailout fund. 114 deputies supported the changes to the original bailout fund, thirty were against and three deputies refrained from voting in the 150-member Slovak Parliament.
Following the failed vote on Tuesday night on the enhanced EFSF coupled with a confidence vote, the Cabinet of Iveta Radicova, now in a caretaker role, again approved the draft annex to the framework agreement on EFSF at its session on Wednesday. The draft was then submitted to parliament.
The draft is fully identical to the one turned down by parliament on Tuesday. Slovak guarantees within the EFSF are to be increased from the original EUR 4.37 billion to EUR 7.72 billion according to it. The level of guarantees in the system is to be in total increased from EUR 440 billion to EUR 779 billion.
The new annex also introduces tools for increasing flexibility of the bailout fund on which European leaders agreed this July. One of such tools is the universal institute of Agreement on Financial Assistance that will replace the current Agreement on Loan because provision of loans will no longer be the only way of providing financial assistance. In line with the proposal, assistance will be provided via preliminary tools also to eurozone countries that are relatively healthy and need help with debt refinancing without undermining trust in the market. The annex will thus boost the EFSF capacity for providing loan tranches also to these relatively sound states and introduce the possibility of recapitalization of financial institutions of a eurozone member via a loan drawn on behalf of the government of such member country, via purchase of bonds on secondary markets based on the ECB analysis or via bond purchase on primary markets.
SITA