BUSINESS
10/12/2011 10:30 EDT | Updated 12/12/2011 05:12 EST

Slovak political parties reach deal to approve EU bailout fund this week, elections in March

BRATISLAVA, Slovakia - Slovakia's main political parties have reached a deal to approve changes to an EU bailout fund this week, the main opposition leader said Wednesday, just one day after the parliament rejected the proposal, causing the government to fall.

Robert Fico, head of Smer-Social Democracy, said that in exchange for his party's votes, three outgoing government party leaders have agreed to hold early general elections on March 10.

"Slovakia will ratify the EU bailout fund without any problems. I believe it will happen on Friday this week at the latest," said Fico.

Tuesday's vote failed because a junior coalition party, the Freedom and Solidarity party, was against it. In a desperate effort to force that party to vote in favour, Prime Minister Iveta Radicova had tied the vote on the bailout fund to a confidence vote in the government. When the vote failed, her 1-year-old government collapsed.

With the government now defunct — and with the promise of early elections — Fico said his party will vote in favour of the bailout fund, which all 16 other members of the eurozone have already supported.

Eurozone leaders had agreed in July to increase the size and powers of the bailout fund, giving it the ability to lend quickly to governments in case of market trouble in order to contain the stubborn financial crisis.