Slovak parliament rejects EU-IMF loan to Greece

(BRATISLAVA) - The Slovak parliament on Wednesday rejected participation in a key Greek loan drawn up by the International Monetary Fund and the European Union to help the debt-laden country avoid default.

Slovakia's new centre-right government, backed by a majority of 79 seats in the 150-member parliament, voted against taking on Slovakia's share in the 110-billion-euro (146-billion-dollar) Greek loan package, amounting to some 800 million euros.

Lawmakers thus overturned a decision of the previous leftist government.

The vote will not in practice prevent Greece from drawing down the loan since it has already been put in place alongside stiff austerity measures.

Parliament also approved a framework agreement on the EU's 440-billion-euro loan mechanism created in the wake of the Greek debt crisis to shore up any member state that may need help.

But Slovakia, whose share of the rescue fund is almost 4.4 billion euros, warned it would back payouts only if "the EU significantly strengthens the Stability and Growth Pact (the foundation for the euro single currency) and its implementation."

Slovakia calls for "a clear mechanism of a managed default for countries that consistently follow an irresponsible fiscal policy," the draft law said.

Slovakia also wants the European Commission -- the 27-nation EU's executive body -- and the European Central Bank which polices the 16-nation eurozone, to provide clear evidence that any country seeking help has done its best to first secure standard funding on financial markets, Finance Minister Ivan Miklos said earlier.

Should the rescue mechanism be activated, "problematic countries will be provided with a returnable loan in line with the policy and conditions of the International Monetary Fund," he added.

Slovakia, a former communist central European country, joined the EU in 2004 and adopted the euro in 2009, becoming the currency bloc's youngest member.