BRUSSELS/ BRATISLAVA, March 25, (WEBNOVINY) – European Union leaders agreed on Thursday on softening the terms for laying down the basic capital of the European Stabilization Mechanism (ESM), the new permanent bailout fund. The fund will have a total of E700 billion, including E80 billion of paid-in capital and E620 billion provided in the form of callable capital and guarantees. The contribution of the paid-in capital will be phased in from July 2013 in five annual installments, instead of the originally proposed three. Slovakia will thus have to contribute EUR 132 million annually, instead of the original EUR 330 million.
“This is a major easement for all countries. The Slovak Republic was among the negotiators of this change,” commented Slovak Prime Minister Iveta Radicova at a late-night news conference following Thursday’s debate of the EU leaders in Brussels. The leaders also agreed upon the process of approving an amendment to the Lisbon Treaty necessary for establishing the ESM.
The leaders also debated broader economic measures that are to help Europe overcome the financial and debt crisis. According to Radicova, there will be significant changes, and their fulfillment could mean that the new bailout fund would not be used. “First of all, all measures and instruments of defined policies, such as the Stability Pack, better economic policies, bank testing, etc. will be applied. We estimate that the policies and instruments that we have adopted are strong enough so that the bailout fun II might not have to be used,” the prime minister commented.
In order for the Europe to overcome the crisis, it is important to implement reforms in addition to observing stricter rules. “Without consolidation of public funds, strengthening its own competitive power, without restoring financial stability in every country, and without enhancing employment, Europe as a whole has no chance to recover from the crisis,” Radicova stated.
Prime Minister Iveta Radicova believes that she will eventually agree upon backing the establishment of the new euro zone’s stabilization mechanism with the SaS party. The prime minister had a news conference late at night following Thursday’s meeting of the European Council in Brussels, where the EU leaders agreed upon the amendment of the Lisbon Treaty to enable formation of the permanent bailout fund. Radicova added that she understands SaS concerns, and they need to be discussed.
Coalition member SaS has not yet decided whether it will support the new European Stabilization Mechanism (EMS), the so-called permanent bailout fund, in Slovak Parliament. After Thursday’s meeting with Finance Minister Ivan Miklos (SDKU-DS), SaS leader Richard Sulik stated that the party has several questions as well as major objections.
SITA