BRATISLAVA, September 8, (WEBNOVINY) — The Cabinet has approved at its Wednesday’s session a legislative framework for Slovakia’s participation in the European Financial Stability Facility. The Finance Ministry has prepared the draft bill on specific guarantees based on the Parliament’s approval of the country’s participation in the stability mechanism in August. The current law on state debt and state guarantees does not allow the Slovak Republic to provide and implement specific state guarantees in a manner and under terms set out in the EFSF framework agreement. The material reads that the valid legislation does not sufficiently address the issue of risk management and coverage of the conditional commitments of the Slovak Republic given the overall possible sum of the specific state guarantee of EUR 4.37 billion.
The bill follows the aim, reads the ministry’s material, to create legislative conditions for provision and implementation of specific state guarantees in compliance with the framework agreement. Its goal is to define individual terms and procedures associated with Slovakia’s participation in the European financial stability tool and provision, administration and implementation of specific state guarantees, related risks and also to define competencies, responsibilities and duties of the Finance Ministry. The draft bill has been sent to interdepartmental review. The Cabinet has agreed to ask Parliament to approve the bill in fast-track legislative procedure.
The bill as such has impacts neither on the state budget nor on the general government budget. The provision of specific state guarantees itself will have no impact on the deficit or general government debt from the viewpoint of the ESA 95 methodology. It would happen only if the state has to really exercise the guarantees.
The European Financial Stability Facility is to be a system of guarantees of EU member states, the European Commission, and the International Monetary Fund in total value of EUR 750 billion. Member countries will guarantee EUR 440 billion; the European Commission EUR 60 billion and the International Monetary Fund EUR 250 billion. These guarantees are intended as potential aid to a member country that is able to finance its debt. The share of Slovakia in the stabilization facility stems from its stake in the European Central Bank and represents EUR 4.37 billion.
SITA
