Slovakia

The three party centre-right coalition government continues to suffer from intra-coalition squabbling. The key issue remains over whether or not to support the eurozone bailouts and under what conditions. Members of the Freedom and Solidarity Party attempted to limit the finance minister's negotiation powers by advancing a resolution in parliament, which subsequently failed. The terms of eurozone bailouts to what Slovak policymakers view as fiscally irresponsible nations has been a source of disagreement between the three parties of the coalition. In our view, despite likely squabbling over details, we expect the importance of the survival of the eurozone to Slovakia's economy to outweigh political disputes, with Slovakia ultimately likely to back future bailouts.

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