Slovak Deal Revives Hope for Euro Rescue Fund

The day after Parliament in tiny Slovakia voted to reject the expansion of a European rescue fund, causing the government to fall and threatening efforts to end Europe’s debt crisis, politicians there struck a deal that should permit the expansion of a rescue fund for the euro after all, the International Herald Tribune reported. The changes to the fund need to be approved in all 17 of the nations that use Europe’s single currency. Slovakia, a small former-Communist country of 5.5 million, is the only holdout. For some, the episode has illustrated the contrast between Europe’s slow, cumbersome decision-making and the ruthless speed of the financial markets. Ultimately, the effort to stave off the debt crisis was almost hijacked by internal political maneuvering in one of the eurozone’s smallest economies. Before the agreement was reached, the European Union’s most senior officials appealed to Slovak politicians to stop their squabbling. “We call upon all parties in the Slovak Parliament to rise above the positioning of short-term politics, and seize the next occasion to ensure a swift adoption of the new agreement,” said a joint statement from José Manuel Barroso, president of the European Commission, and Herman Van Rompuy, the president of the European Council. Slovakia’s new vote to approve changes to the rescue fund known as European Financial Stability Facility is expected Thursday or Friday. Read more.