The long process by which the Eurozone countries approve the July deal to expand the bailout fund (the EFSF) has now reached the Slovakian parliament where it is likely to pass at some stage, while destroying the existing coalition government en route.
The main roadblock has come from SaS, the Freedom and Solidarity party, a partner in the coalition. This Der Spiegel interview with the party’s leader, Richard Sulik, is worth reading. He’s no euroskeptic, but he wants the common currency union to stick by its rules. Here’s an extract:
SPIEGEL ONLINE: Does one of your reasons for not wanting to help Greece have to do with the fact that Slovakia itself is one of the poorest countries in the EU?
Sulík: A few years back, we survived an economic crisis. With great effort and tough reforms, we put it behind us. Today, Slovakia has the lowest average salaries in the euro zone. How am I supposed to explain to people that they are going to have to pay a higher value-added tax (VAT) so that Greeks can get pensions three times as high as the ones in Slovakia?
SPIEGEL ONLINE: What can the Greeks learn from the reforms carried out in Slovakia?
Sulik: They have to make cuts in the state apparatus. The Slovaks could also give them a few good ideas about the tax system. We have a flat tax when it comes to income taxes. Our tax system is simple and clear.
The comment about the flat tax is worth noting. Sulik, like a number of other Eastern/Central European politicians, has borrowed and expanded on the old Thatcherite model of flattening income tax rates and increasing consumption taxes (a good idea with few takers over here, alas), and he is widely seen as the godfather of Slovakia’s own flat (19%) tax.
Via the WSJ, here’s a bit more on SaS:
His Freedom and Solidarity party, or SaS, that he created in 2009 skyrocketed to the top of the Slovak political scene at the 2010 general elections. SaS won 22 seats in the Slovak 150-member parliament, making it the legislature’s third-largest party. It got there after campaigning for low taxes, a lean government, legalization of soft drugs, marihuana in particular, allowing same-sex civil unions and abolishing fees levied on all owners of television sets to finance the public broadcaster STV.