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Eurozone bailout fund faces key Slovakian vote Eurozone bailout fund faces key Slovakian vote
(40 minutes later)
Slovakia will vote later on measures to bolster the powers of the eurozone bailout fund, seen as vital in combating the bloc's debt crisis.Slovakia will vote later on measures to bolster the powers of the eurozone bailout fund, seen as vital in combating the bloc's debt crisis.
After Malta approved the plans late on Monday, Slovakia is now the last of the 17 member states to vote. All other members have approved the measures.After Malta approved the plans late on Monday, Slovakia is now the last of the 17 member states to vote. All other members have approved the measures.
But with one coalition party insisting Slovakia is too poor to bail out others the outcome of the vote is in doubt.But with one coalition party insisting Slovakia is too poor to bail out others the outcome of the vote is in doubt.
The prime minister has said she will tie the vote to a confidence vote.The prime minister has said she will tie the vote to a confidence vote.
"I have to say that the coalition partners have failed to reach an agreement," Iveta Radicova said."I have to say that the coalition partners have failed to reach an agreement," Iveta Radicova said.
While three of the four parties in the coalition back the expansion, a fourth is holding out, demanding tough conditions. The country's future in Europe was at stake, she said.
Unless the party falls into line at the last minute, the government could end up depending on opposition support - but the opposition has made its own stringent demands, including new elections. "It's unacceptable for a prime minister to allow the isolation of Slovakia."
While three of the four parties in the government coalition back the expansion, a fourth, the liberal Freedom and Solidarity (SaS), is holding out.
The SaS has balked at Slovakia - one of the poorest countries in the eurozone - being asked to guarantee 7.7bn euros of the 440bn EFSF.
It is demanding, as the price for its support: a binding agreement that Slovakia would refuse to take part in the European Stabilisation Mechanism, which is meant to replace the EFSF in 2013; and a veto over future bailout disbursements from the EFSF.
Unless the party falls into line at the last minute, the vote is likely to be lost, as the socialist opposition says it will abstain.
However, parliament can call for a repeat vote. The opposition has indicated it would then back the measures - though it may make its own stringent demands, including new elections.
'Not enough'
To expand the powers of the bailout fund - the European Financial Stability Facility - all member states must agree on the measures proposed in July.To expand the powers of the bailout fund - the European Financial Stability Facility - all member states must agree on the measures proposed in July.
These include expanding the size of the fund to an effective lending capacity of 440bn euros ($600bn; £383bn).These include expanding the size of the fund to an effective lending capacity of 440bn euros ($600bn; £383bn).
They also include giving it the power to buy eurozone government debt and offer credit lines to member states and to banks.They also include giving it the power to buy eurozone government debt and offer credit lines to member states and to banks.
The irony is that these plans, agreed in July, are now seen as inadequate, says the BBC's Matthew Price in Brussels.The irony is that these plans, agreed in July, are now seen as inadequate, says the BBC's Matthew Price in Brussels.
Market analysts suggest the fund needs to be nearer 2 trillion euros to be effective.Market analysts suggest the fund needs to be nearer 2 trillion euros to be effective.
Other plans agreed in July, to make private investors take a hit on any default by Greece on its debts, are also now seen as insufficient. Reports suggest leaders are contemplating a 50% cut rather than the 21% cut originally proposed.Other plans agreed in July, to make private investors take a hit on any default by Greece on its debts, are also now seen as insufficient. Reports suggest leaders are contemplating a 50% cut rather than the 21% cut originally proposed.
Fresh measuresFresh measures
French President Nicolas Sarkozy and German Chancellor Angela Merkel pledged on Sunday to do what it takes to protect European banks from the debt crisis.French President Nicolas Sarkozy and German Chancellor Angela Merkel pledged on Sunday to do what it takes to protect European banks from the debt crisis.
The leaders said they were close to a detailed package to ease the crisis and would give further details within weeks.The leaders said they were close to a detailed package to ease the crisis and would give further details within weeks.
The pledge helped boost stock markets on Monday, with Wall Street's Dow Jones index rising 3%, albeit on low volumes.The pledge helped boost stock markets on Monday, with Wall Street's Dow Jones index rising 3%, albeit on low volumes.
The markets are now expecting more comprehensive measures designed to tackle the crisis once and for all to be announced at a G20 meeting in Cannes at the beginning of November.The markets are now expecting more comprehensive measures designed to tackle the crisis once and for all to be announced at a G20 meeting in Cannes at the beginning of November.