Thursday, November 23rd, 2017

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Slovakia Key to European Debt Crisis

Legislators in Bratislava will debate whether to approve the expansion of the EFSF.As Europe continues to struggle with the debt crisis in Greece, some legislators in Slovakia could stand as a major impediment to the region's attempts to stabilize its economy. The Wall Street Journal reports that Slovakia is strongly considering voting against the expansion of the European Financial Stability Facility bailout fund.

The European Union seeks to expand the authority of last year's bailout fund to allow it to ease Greek repayments and prevent default. When it was initially approved, the €440 billion fund was given strict limitations on how it could employ its money.

Current Prime Minister Iveta Radicova supports the expansion of the EFSF, but sentiment within her government is far from unified and 22 legislators are expected to abstain. Radicova might be forced to dissolve her government with the loss of the upcoming vote, with most expecting a new coalition would reject the proposal.

Bloomberg reports that European stocks have halted their rally and reversed course in the lead up to the Slovak vote, though at least one analyst suggested approval of the measure could allow the recovery to continue unabated.

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