Is Slovakia’s Classical Liberal Party the Last Stand Against the Euro Bailout?

Today the Slovakian parliament will vote to ratify on the rescue mechanism for the Eurozone.

However, there seems to be a complication—a party of libertarian-classical liberals led by Richard Sulik, leader of Slovakia’s libertarian Freedom and Solidarity (SaS) party—are opposed to its passage.

From Sunday’s Financial Times (bold emphasis)

A hardline libertarian party in one of the newest, smallest and poorest members of Europe’s single currency looks set to throw a spanner in the machinery of expanding the eurozone’s bail-out fund – seen as crucial to restoring market confidence in the bloc.

Despite pressure from across the continent, Richard Sulik, leader of Slovakia’s libertarian Freedom and Solidarity (SaS) party, repeated on Sunday that his party would reject the measure.

A last-minute meeting of the four-party ruling coalition is set for today in an effort to persuade Mr Sulik to back down and support the extension of the European financial stability facility at a crunch vote on Tuesday.

Mr Sulik made clear that his 21 MPs will reject the EFSF expansion if the other coalition parties do not agree to his proposals. Without those votes, the 77-member governing coalition has no chance of a majority in the 150-seat parliament.

Last week SaS offered to support the EFSF, but in return for a Slovakian veto on how its contribution would be spent and an outright refusal to participate in the permanent European stability mechanism, due to replace the EFSF next year….

The quiet-voiced Mr Sulik looks more like a demure bureaucrat rather than what he is – a self-made millionaire and one of the last of central Europe’s true believers in economic liberalism. Free market doctrine was hugely fashionable in the 1990s across the region, when ministers who had gained most of their experience from economic texts found themselves in power. They pursued radical solutions to eliminate the last remnants of state socialism.

“We are a classical liberal party. We are defenders of the Austrian school of economics,” says Juraj Droba, an SaS MP, describing his party’s relationship with the neoliberal school.

If the Slovakian parliament fails to garner the required votes, then whatever gains that we’ve seen in the financial markets lately—mostly based around expectations of political promises—will turn out to be fleeting.

Anyway even if the rescue package gets ratified, the EFSF is no guarantee of success. Bailouts incentivizes moral hazard or reckless behavior, which is why we are seeing this continuing crisis which began to unravel in 2008.

Hopefully Slovakia’s classical liberals will remain steadfast in their quest to champion sound money policies and continue to fight against tyrannical redistributionist policies that favors the political and banking elites. (hat tip Angel Martin, David Boaz).