Last night, Slovakia's parliament failed to approve the bill that would expand the powers of the Eurozone's bail-out fund (EFSF). Having linked the vote to a confidence motion before, the governing coalition has been toppled. Slovakia was the last Eurozone member country to vote on these measures - but the first one to vote them down. I explained the reasons that had caused that have brought about the government crisis in a blog post yesterday - the question which everyone asks at the moment is what happens next.
The collapse of the centre-right government has a number of domestic consequences (this has been one of the shortest-lived coalitions in Slovakia's recent history) and the implications for the rest of the Eurozone will not be catastrophic. Although the government has technically resigned, it will continue in a caretaker role until there is a reshuffle or early elections. The leaders of the three out of four ruling parties - all supporters of the EFSF - have already called on the largest opposition party, the centre-left SMER, to join negotiations about their support for the bail-out fund. The fourth ruling party, Freedom and Solidarity, which adamantly opposed the bail-out fund, has thus been de facto ejected from the coalition. The second vote on the EFSF is likely to be scheduled in the next few days and the expansion of the EFSF powers is expected to be approved easily, with the support from the opposition SMER. The SMER is the biggest winner of the yesterday's vote: the party is keen to extract as many concessions as possible, including their potential entry into a broad coalition government.
In short, the Slovak vote has delayed, not derailed the EFSF: the bail-out fund will almost certainly be approved, but it will be done by another government. This one has fallen victim to the vote.
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