Slovakia stalls expansion of euro rescue fund

PanARMENIAN.Net - The parliament of Slovakia stalled the expansion of a bailout fund to rescue the euro zone from its debt crisis on Tuesday, October 11, but international lenders said they were likely to grant a loan to Greece next month, buying time for a broader response.

European Central Bank chief Jean-Claude Trichet said the debt crisis had become systemic and must be tackled decisively.

Slovakia is the only country in the 17-member currency zone that has yet to approve giving new powers to the European Financial Stability Fund. The expansion was agreed by euro zone leaders in July but must be ratified by each country.

The EFSF is Europe's main weapon to respond to a debt crisis that threatens the European common currency, the region's banks and potentially the global financial system.

The government of Slovak Prime Minister Iveta Radicova fell on Tuesday after a small party in her ruling coalition refused to back the plans. The outgoing government still expects to be able to enact the measure as a caretaker administration by the end of this week with support from an opposition party.

"There is an assumption that the EFSF, one way or the other, will be approved by the end of the week," Finance Minister Ivan Miklos told parliament ahead of the vote, Reuters reported.