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Slovakia Seeks to Lose Euro Troublemaker Image, Fico Says
Slovakia, which held up approval of the euro area’s rescue mechanism last year, won’t cause any more problems for the currency region in its fight to end the sovereign-debt crisis, Premier-elect Robert Fico said.
“We no longer want to be the troublemakers,” Fico said yesterday in an interview at his party’s headquarters in the Slovak capital, Bratislava. “Within our means, we will contribute to all measures and support all decisions aimed at protecting the euro.”
Slovakia, the second-poorest euro-area country of 5.4 million, unsettled investors in October when it delayed approval of the euro area’s enhanced rescue fund. Fico, whose Smer party won a majority in March 10 snap elections, helped push through the aid mechanism after the previous administration collapsed over the issue.
European leaders are trying to shore up faith in their budgetary discipline after the debt crisis forced Greece into the largest restructuring in history. Fico said that Slovakia will ratify the fiscal compact, agreed on Jan. 30, which requires balanced-budget rules and speeds up sanctions on nations exceeding deficit limits.
“The euro region can’t function with a common currency and different economic and fiscal policies,” Fico said. “What is wrong with consulting budgets with the European Commission?”
Plans for stricter fiscal rules, combined with the European Central Bank lending more than 1 trillion euros ($1.3 trillion) to financial institutions, have curbed yields on government debt in Europe and boosted the euro. The currency traded at 1.3194 to the dollar as of 5:29 p.m. in Bratislava, compared with the 2012 low of 1.2667 reached on Jan. 16.
As prime minister from 2006 to 2010, Fico oversaw Slovakia’s switch to the common currency three years ago and signed on for the country’s participation in the bailout mechanism after the debt crisis escalated.
Slovakia was the last country to ratify the enhancement of the European Financial Stability Facility, the temporary bailout fund, in October. The nation also refused to contribute to the first loan to Greece after former Premier Iveta Radicova assumed power in July 2010.
Measures taken so far by EU leaders have provided relief to the euro region, Fico said, adding he was “quite optimistic” about the prospects for the currency bloc.
Smer’s majority in parliament implies the eastern European nation will endorse the early activation of the EFSF’s permanent successor, the so-called European Stability Mechanism, he said. The party also backs closer fiscal integration within the EU and isn’t against harmonization of taxes within the EU, a move opposed by the previous administration.
The new Cabinet may consider supporting an introduction of common euro-area bonds once the fiscal union and the permanent bailout fund are in place, said Fico.
“Membership in the EU and the euro zone has been so far so beneficial for Slovakia, so we also understand that there is some level of solidarity we have to pay toward the euro,” Fico said.