Greek Aid Agreed Amid Slovakia Bailout Vote

Greece has learnt it will receive more bailout cash - as Slovakia prepares to vote on the future of emergency eurozone funding.

After reviewing Greek finances, debt inspectors from the EU, International Monetary Fund and European Central Bank said 8bn euros would be paid to Athens after approval by eurozone finance ministers.

But they warned Greece would need additional measures to meet debt targets in 2013 and 2014.

Meanwhile, Europe's eyes are trained on Slovakia, which is the last of all the 17-member states to vote on measures designed to boost the powers of the eurozone's bailout fund.

The coalition government has yet to reach agreement about passing a deal.

Three of the four parties in the right-of-centre government want to push through the mechanism aimed at preventing the Greece debt crisis from spiralling out of control.

But a fourth, the the Freedom and Solidarity (SaS) party, has said it will not vote, arguing that one of the poorest members should not have to pay for the huge debts racked up by richer states like Greece or Italy.

The decision means the Slovakian government will lack the votes they need to win.

"The social democrats in opposition are not going to vote for it - although they say they support it - because they want to bring the government down," explained Slovakian politics expert Karen Henderson.

"Whether they bring the eurozone down in the course of this doesn't really seem to bother them."

Prime Minister Iveta Radicova and her like-minded coalition partners have vowed to push through the ratification even if they have to ask for the opposition's support - a scenario that would almost certainly trigger the collapse of the government.

On Monday evening last-ditch talks failed to produce an agreement and Ms Radicova threatened to resign if the vote is not passed.

Any further delay to the ratification of the European Financial Stability Facility (EFSF) expansion, which was originally envisioned to happen by mid-October, could rattle markets already under pressure from signs that the crisis is spilling beyond Greece's borders.

"The SaS should consider that it could trigger not just a collapse of the government, which is a secondary issue right now, but cause turbulences in Europe and on the markets," said Grigory Meseznikov director of the Institute for Public Affairs.

If the measure is approved, Slovakia, with a population of 5.5 million, will contribute roughly £6bn in debt guarantees to the stability fund.

All 17 eurozone states must ratify the EFSF expansion for it to go active.

The deal boosts its size to 440bn euros, allows it to buy bonds from the market to support countries under attack by markets, bail out members who need funding and
help them prop up failing banks.

On Monday Belgium agreed to buy the Belgian arm of the bank Dexia after fears exposure to Greek, Spanish and Portuguese debt could make it go bankrupt.

German Chancellor Angela Merkel and French President Nicolas Sarkozy said after talks late on Sunday that they would unveil new measures in the coming weeks to solve the debt crisis, but gave few details.