Slovak govt approves ESM treaty

BRATISLAVA - Slovakia will have to contribute 659.2 million euros in five installments over five years to the European Stability Mechanism (ESM), according to the second version of the ESM treaty approved by the government on Wednesday.

The ESM will be introduced in mid-2012, which is one year earlier than originally planned.

In contrast to the European Financial Stability Facility (EFSF), which was based only on collateral provided by individual eurozone member-countries, the ESM will have a total subscribed capital of 700 billion euros, of which 80 billion euros will be in the form of paid-in capital, while 620 billion euros will be represented by committed accessible capital.

The total amount of subscribed capital provided by Slovakia will reach 5.768 billion euros.

The ESM treaty is a presidential treaty, so it must be ratified both by parliament and the president before it comes into force.

The Finance Ministry has pointed out that the treaty will require the setting-up of a broad framework in a wider scope than was required when joining the EFSF.