Slovak MP: ‘Czechs, your MPs will throw away Kč 250 bln’

Chairman of Slovak parliament Richard Sulík warns Czechs against ratifying the ESM: Greeks won’t pay it back, he says

Tom Jones 19.9.2011

Czech enthusiasm for adopting the euro has diminished since the onset of the crisis foto: archivČeská pozice

Czech enthusiasm for adopting the euro has diminished since the onset of the crisis

In an interview with the news server ParlamentyListy.cz, the chairman of the unicameral Slovak parliament and member of the center-right Freedom and Solidarity party (SaS), Richard Sulík, says the European Stability Mechanism (ESM) to bail out Greece would be a waste of money; Athens will never be able to pay back, he says.

Sulík, who studied economics in Germany and was a businessman before entering politics, supported Slovakia’s adoption of the euro in 2009, now says the policy of bailing out Greece — and potentially other troubled economies in the eurozone — breaches EU rules and will only delay and perpetuate a deeper crisis.

The policy of borrowing and transferring funds within the monetary union is essentially forcing poorer EU member states, including Slovakia, to subsidize richer states Greece and Italy, he argues. Sulík says the eurozone is now a different eurozone to the one which Slovakia entered and that with hindsight adopting the euro was a mistake. ‘The essence of the solidarity is that Slovak citizens will have to pay money for French and Greek banks and high Greek pensions. It’s crazy.’

“Part of the money goes straight to French and German banks that lent Greece the most, and now we’re supposed to pay for their risk despite the fact that previously they made very decent profits from it [investing in Greek government bonds]. It’s perverse solidarity. In 2010, the average Slovak pension was €378, but in Greece it was €1,365. The essence of the solidarity is that Slovak citizens will have to pay money for French and Greek banks and high Greek pensions. It’s crazy,” Sulík told the server.

According to the right-wing, Czech euroskeptic economist Petr Mach (Party of Free Citizens, SSO), if the Czech parliament ratifies the amendment of paragraph 136 of the Lisbon Treaty, which is required for the establishment of the ESM, and which would replace the European Financial Stability Facility (EFSF) and European Financial Stabilization Mechanism (EFSM), the country will have to contribute some Kč 250 billion.

If the ESM is formed, Slovakia will be obliged to contribute a further €3 billion, which together with the country’s current commitments will raise its overall contribution to €10 billion, or roughly the equivalent of Slovakia’s annual state budget expenditure, Sulík says.