Eurozone’s bailout fate dicey
Due to EU rule requiring unanimity, unlikely figure in Slovakia holds key
LONDON – For a man accused of holding an entire continent hostage, Richard Sulik cuts a modest figure. With his shiny pate and geeky glasses, he looks more like a mild-mannered economist than a rough-and-tumble politician.
In fact, he’s both. But it’s as leader of the Freedom and Solidarity party in oft-overlooked Slovakia that Sulik finds himself in the unfamiliar glare of the international spotlight. He has the power, some say, to save Europe’s economy or push it over the precipice, with serious consequences for the rest of the world.
The Slovak parliament is scheduled to vote Tuesday on a plan to beef up Europe’s bailout fund for financially strapped nations such as Greece. Most experts agree that broadening the fund’s powers is a crucial, if limited, step in taming the debt crisis that has had financial markets somersaulting.
Fifteen of the 17 nations that use the euro currency, including heavyweights Germany and France, have signed on to the plan, with Malta expected to approve it within days. But it requires approval by all the eurozone countries, and a thumbs-up from Slovakia, which will probably be the last to vote on the measure, is in grave doubt.
For that, thank Sulik. Why, he asks, should his compatriots, among the poorest residents in the eurozone, open their wallets to bail out the Greeks, whose government dug its own hole by irresponsible overspending?
Sulik’s party is only a junior member of the fractious ruling coalition in Bratislava, the Slovak capital. But if he withholds his support, as he is threatening to do, the plan to strengthen the bailout fund to $600 billion will not have enough votes in parliament. The defeat would send Europe scrambling for an alternative and could set off a catastrophic chain reaction through world markets.
That Sulik, 43, could torpedo the plan illustrates the handicaps on decision-making that have made Europe’s collective response to the debt crisis so slow and inadequate.
Because of the insistence on unanimity, a man whose party drew just 12 percent of the vote in the Slovak general election last year now wields, in effect, veto power over a rescue program endorsed by more populous and more influential nations.
Rules designed to protect the sovereignty of European Union member states, both big and small, are now acting as a major drag on the bloc’s ability to combat a crisis that some say could ultimately tear it apart.
“In many ways it is absurd” that a lone holdout can trump all the other countries, said Janis A. Emmanouilidis, an analyst at the European Policy Center in Brussels.
But though the situation may strike some as undemocratic, “that’s how the EU is constructed; it’s part of our DNA,” Emmanouilidis said.
Trying to engineer a consensus among the 27 nations of the EU, or just within the eurozone, is a tough task even in good times. The current financial and economic emergency has magnified that difficulty.
Since Greece’s runaway budget deficit triggered the debt crisis 1 1/2 years ago, the continent’s leaders have struggled to come up with a united approach. Yet when they finally agree on an action plan, events have often overtaken them, giving the impression that they are constantly solving yesterday’s problems.
“It’s a perfect storm, driving countries apart and creating divisions and conflicts, and the EU does not have the political infrastructure to handle it,” said Christoph Meyer, an expert on European politics at King’s College London.