Wednesday May 25, 2022

The Slovaks have sunk outside the protection fund, the markets are in uncertainty

Slovakia has agreed to a major reform of the fund, which is to save the country affected by debts. The markets are not sure that in the near future there will be an increase in income in the fund and the distribution of its powers. The Slovak government did not vote, as the Prime Minister of the Radios also joined the two speakers in the vote.

Slovakia is the only seventeen-year club of hundreds paying the euro, which was not approved by the changes in the European Financial Stability Fund (EFSF). The consent of all euro area countries is required for the document to enter into force.

Slovakia blocked the fund’s guarantee from 440 to 780 billion euros. The situation of the eurozone countries is set to worsen. The countries will not be able to draw the pension funds necessary to recapitalize weak banks. The fund’s pensions are for example for Greece, Ireland or Portugal.

“Some indebted countries of the euro area cannot afford to recapitalize banks from their own resources, nor would they worsen their public finances and ratings,” explained Patria Finance chief economist David Marek.

Slovakia will not cause me any further tremors in the financial markets and, as a result, the probability that Europe will once again be in the bag.

According to economist Markta ichtaov from Next Financeneschvlen, the koruna will weaken further. “And conversely. The Czech economy is also growing and is falling with developments in the euro area, “she wrote.

The euro reacted just twenty minutes after the government. It weakened from 1.367 to $ 1.364.

The Slovak government has fallen

After the unfortunate negotiating leaders of the coalition, the Slovak cabinet, on the proposal of Prime Minister Iveta Radiov, decided to join the voting parliament of the EFSF protection fund with a statement by the court. f the kind of the strongest party SaS then declared that the deputies of the party do not support the document even at the cost of the government. The cabinet of Prime Minister Iveta Radiov finally fell.

The leaders of the Slovak government coalition failed to reach agreements on a compromise proposal even after many hours of discussions, the marathon once started a few weeks ago.

The most pension to the fund stream from Germany

The spread of the protection fund, the so-called euro currency, was approved by one of the seventeen member states of the euro area. The Maltese parliament was the last to shed light on the agreement.

Slovakia was negative to help indebted countries last year and was the only eurozone country not to provide a loan to indebted Greece. However, Parliament was involved in the protection fund last August.

The largest contributor to the fund is, as the largest economy in the euro area, Germany. According to his guarantees, he can increase from the current roughly 120 billion euros to 211 billion, which was disliked by the German public and the public court. However, this year the 7th z decided that Germany’s financial assistance to the indebted countries of the euro area is not illegal. However, according to his verdict, the government must again obtain the approval of the budget committee of the Federal Assembly, it is not intended to provide additional guarantees, and their election must be precisely defined.

Uncertainty about voting in Slovakia was not reflected in the price of events in Europe. The stock market lost about a percent and so most stock exchanges in Europe lost up to one percent. A strong reaction of the financial markets can be expected and in the middle.

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