Slovakia's parliament has reopened its session for its crucial vote on an expansion of the euro zone's bailout fund. Slovakia is the last of the 17 euro-zone countries to vote on the €440-billion ($600.34 billion U.S.) European Financial Stability Facility, which was agreed upon by euro-zone members in July to address the euro-zone's debt crisis.
Should Slovakia fail to ratify the reforms, hopes for a resolution to the euro-zone's debt crisis could evaporate, sending markets into a tailspin by resurrecting default fears. A repeat vote could be held and the plan may pass with help from the opposition the second time around, but this vote could also drag on because of the country's messy domestic politics.
Finance Minister Ivan Miklos, who has supported increasing the firepower of the European Financial Stability Facility, took to the floor to present the EFSF accord to the legislature.
Mr. Miklos went on to say that the EFSF is "a necessary tool" to tame the euro-credit market turmoil. "The entire world is watching us to act on the EFSF," he said, adding that Slovakia can't risk rejecting it.
The government of Prime Minister Iveta Radicova is expected to lose the confidence vote and support for increasing the firepower of the European Financial Stability Facility. Such an outcome, however, should allow room for talks to reshuffle the cabinet and hold a repeat vote on the EFSF at which the bailout fund is likely to be approved with the help of opposition lawmakers from the left-of-centre Smer-Social Democracy, or Smer, party. The repeat vote on the EFSF is unlikely to take place Wednesday as more time for political talks will be needed.
Ms. Radicova linked the approval of the plan to a vote of confidence, putting her political life on the line to sway rebels in her four-party coalition to back the bailout fund.
Richard Sulik, the chairman of the Freedom and Solidarity party, has insisted that it would reject the plan.
"We are against the EFSF," Mr. Sulik said in a statement on the party's website ahead of the vote.
Mr. Sulik said 22 SaS lawmakers will abstain from the vote on the EFSF. Without SaS's support, the government won't have enough votes to secure approval of the legislation, while Ms. Radicova's reform-minded right-of-center cabinet will collapse.
The euro-zone agreement expands the lending capacity of the EFSF and gives it new powers, including the right to buy sovereign debt on secondary markets and function as the lender of last resort for euro-zone banks.
Asked to give her opinion on when the possible repeat vote may take place, Ms. Radicova said "although it is my hope that the EFSF passes today, I refuse to get drawn into discussions about timing of a possible repeat vote."
Smer, the largest opposition party, is now determined to take part in the linked EFSF-confidence vote to ensure the parliament has a sufficient quorum, party spokesman Erik Tomas told reporters.
Smer may support the EFSF in a repeat vote, following an inevitable government reshuffle if the government loses the confidence vote later Tuesday.
If the government does lose the confidence vote, President Ivan Gasparovic will step in to appoint an interim cabinet to govern until a reconstructed government is formed or the date for snap elections is set.
"It is up to president to decide what next steps would be necessary in case the parliament votes no confidence in the government," Ms. Radicova said.
Ms. Radicova may stay at the helm of an interim caretaker government to hold talks with the left-of-centre Smer on its demands in exchange for Smer's support in the repeat vote on the EFSF.
Smer leaders are having last-minute talks ahead of the parliament vote on their next steps, Mr. Tomas said.
