Euro Bailout Fund Plan Gets Final Approval

Plans to boost the eurozone rescue fund have cleared the final hurdle after Slovakia's parliament approved the measures in a repeat vote.

The bailout fund known as the European Financial Stability Facility (EFSF) can now be increased in size and scope as all 17 eurozone nations have accepted the proposal.

Slovakia's coalition government rejected the deal on Tuesday, prompting the prime minister to offer early elections in exchange for the support of the main opposition party.

In a repeat ballot, 114 politicians voted in favour of boosting the bailout fund's powers - well above the 76 needed.

As one of the eurozone's youngest, poorest and smallest nations, some in Slovakia were opposed to the bill to bolster the powers of the EFSF.

With a population of just 5.4m, the country produces only 1% of the 17-member eurozone's total output.

Slovakia's portion of guarantees backing up the EFSF is 7.7bn euros (£6.7bn), which is about 11% of its annual output.

The head of one of the parties in the ruling coalition argued that this was too much considering Slovak living standards are just 74% of the EU average and below Greece's 89%.

However, Slovakia has enjoyed numerous benefits since joining the EU in 2004 and recent opinion polls showed most people backed plans to expand the fund.

The vote eventually came down to internal politics, with the opposition party voting tactically in an attempt to bring down the government.

The package now agreed will raise the EFSF to 440bn euros (£384bn) and give it the ability to buy sovereign bonds, extend emergency lending to countries and recapitalise banks.

"After the successful completion of all political approval procedures, the EFSF and its Board will finalise quickly all necessary guidelines and procedures to be able to use the new instruments in the near future," said Klaus Regling, the chief executive of the fund.