Europe, be honest!
October 12, 2011
It was all in vain - the pressure the Slovak premier and other European partners put on the country's parliament. In the end, there was no majority for an extension to the bailout fund. And since all 17 members states must ratify the extension, it cannot be implemented just yet.
But that doesn't necessarily mean the end of the reform plans. Parliament can vote a second time, and the outcome may well be different, or there may be fresh elections. Either way, the governments in the eurozone will once again put pressure on Slovakia to give the green light to a comprehensive solution to the crisis.
One thing has emerged from this vote already: The debate in the Slovak parliament represents a widespread unease in the EU regarding the eurozone's approach to the crisis.
Those in Slovakia that are opposed to the extension of the fund point out that their own country pulled itself out of an economic hole without help from abroad, so why should it now take part in saving a country that is either not willing or not able to reform? Plus, any financial aid would be throwing good money after bad.
Recent developments certainly give credence to that view. Not so long ago, uttering the word haircut in the eurozone was tantamount to high treason. Berlin, too, claimed that an extended bailout fund was a last-resort option.
Now, the writing is on the wall: A haircut for Greece is inevitable, and even Italy is looking much more shaky than anyone would have cared to admit to. Banks will have to be saved yet again - with taxpayers' money, as per usual.
The EU will find a solution for the Slovak problem. Either (a possibly new) parliament will approve the extension after all, or a compromise will be found for the reform of the bailout fund. Then, politicians will point the finger at the troublemakers in Bratislava.
But the credibility issues in European politics remain. So far, politicians have only ever admitted to what was absolutely necessary. The Slovak case will hopefully inject a bit more honesty into the handling of this crisis.
Author: Christoph Hasselbach / ng
Editor: Chuck Penfold