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RUZ Calls on Govt to Abandon Share in Bailout of Debt-ridden Greece
Thursday 22 April 2010 Zoom in | Print page
Bratislava, April 22 (TASR) - The Republic Union of Employers (RUZ), an organisation of employers in Slovakia, came out in protest on Thursday against the Government's plans to provide €300 million out of a €30 billion-plus loan, which eurozone countries agreed on April 11 to provide to the near-bankrupt Greece.
"The readiness of eurozone countries to provide a €30 billion loan to Greece is a signal for financially irresponsible governments to go on sinking their countries into debt with impunity," said RUZ vice-president Jozef Spirko.
According to RUZ, Slovaks will be forced to salvage social benefits for Greek workers, and its unemployed and retirees. It argues that average monthly wages in Slovakia last year stood at €744 versus €2,000-plus in Greece. Furthermore, whereas Slovak pensions fall far short of the original income, many Greek pensioners get more than the equivalent of their original wage.
Therefore RUZ blames the Slovak Government for channelling €300 million to Greek pensioners, state salaries and severance packages, instead of for healthcare and support for young Slovak families. "Why are Slovaks, of all people, supposed to bankroll the above-average benefits of state employees or pensioners in Greece?" asked Spirko.
A loan to Greece, according to RUZ sets a dangerous precedent for the financially irresponsible governments to claim the same aid in the event of their future problems. As well, the Slovak Government does not have any guarantees from Greece with respect to its defaulting on debt.
"Employers are urging the Government to change its consent to providing a loan for Greece, and to set about pursuing austerity measures to reduce the fast-growing debt of our country," concludes RUZ in the release.
The Finance Ministry confirmed for TASR that Slovakia would have to borrow funds for its contribution to the bail-out package which would be provided on request by Greece. Spokesperson Miroslav Smal revealed that the contribution of respective eurozone members is computed based on their stake in the capital of the European Central Bank (ECB) – excluding Greece. This represents 1.02 percent for Slovakia.
"Slovakia would profit from this financial operation, since interest rate on which Slovakia is providing the aid is higher than the cost incurred by obtaining the funds," said Smal.
Other countries, Smal says, would also have to borrow to provide for a loan since as, in essence, none of them holds such a sum. He also admitted that under European budgetary rules, such a loan would be factored into the Slovak public debt. This question may become part of European-level discussions and it could be agreed upon to classify this loan as off-budget expenditure.
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