After receiving the green light from all the other eurozone member states, the implementation of the bailout fund now hangs in the balance as the Slovakian parliament rejects the extension of the fund.
Radicova's government has broken up after losing the bailout vote
The Slovak parliament has voted against an extension to the eurozone bailout fund, making it the only country in the 17-member single currency bloc to do so. Of the 124 lawmakers present, only 55 voted in favor, nine against and 60 MPs abstained.
The vote spells the end for Slovakia's coalition government, as Premier Iveta Radicova had tied the survival of her center-right government to the parliamentary vote.
Despite the ructions, Radicova is still hoping the bill will be passed by the end of the month.
"I appeal to and urge the leaders ... to turn to the head of Smer and agree on the ratification of the EFSF," she said at a news conference, adding that her party would hold talks with the primary opposition party, Smer-Social Democracy, led by former Prime Minister Robert Fico.
Three of the four parties in Radicova's coalition supported the expanded 440-billion-euro ($599 billion) European Financial Stability Facility (EFSF), established to buy up the bonds of heavily indebted eurozone states such as Greece and to recapitalize ailing banks.
Too poor to pay?
But the fourth member of Slovakia's coalition government, the Freedom and Solidarity Party (SaS), was staunchly opposed to the fund and abstained from Tuesday's vote. Party chief Richard Sulik has called the fund "a road to hell," arguing that Slovakia is too poor to pay for the fiscal mistakes of nations such as Greece.
Sulik (center) abstained from the vote
The SaS had demanded sweeping concessions that would give Slovakia veto power over the approval of future bailout monies while at the same time providing Bratislava with the choice to opt out of the planned, permanent European Stability Mechanism (ESM). The ESM is set to succeed the temporary EFSF in 2013.
Slovak Finance Minister Ivan Miklos said the country would likely approve the plan sometime this week, despite the opposition from Sulik's party.
"There is an assumption that the EFSF, one way or the other, will be approved by the end of the week," Miklos told parliament, indicating that there could be a second vote now that the government has fallen.
Risk of isolation
Slovakia has a population of 5.5 million people and would be expected to contribute one percent of the fund's capital, or 7.7 billion euros. The 16 other eurozone states have already approved the fund, making the vote in Slovakia the final and critical hurdle before the EFSF's implementation. Malta, the eurozone's smallest member state, gave the fund the green light on Monday.
"It's unacceptable for a prime minister to allow the isolation of Slovakia," Radicova said.
The prime minister's coalition had 79 of the 150 seats in Slovakia's parliament.
Before the vote, Smer-SD party chief Robert Fico had expressed willingness to help Radicova, but not without political consequences.
"We will only support the bailout fund if political consequences are drawn," Fico said. "The government cannot continue this way. It is high time for new elections."
EU President Herman Van Rompuy announced Monday that the bloc was delaying a key summit on the eurozone rescue package by almost a week to give leaders more time to finalize a response to the debt crisis. The summit will now take place on October 23.
Word of warning
As Slovakia dragged its feet over the EFSF approval, eurozone leaders were discussing further action to prevent the spread of the debt crisis.
European Central Bank President Jean-Claude Trichet said on Tuesday the debt crisis was systemic and said European leaders and institutions must "rise to the challenge and act together swiftly." He said Europe was at the "epicenter" of the global economic crisis.
Author: Spencer Kimball, Joanna Impey, Nicole Goebel (AFP, AP, dpa, Reuters)
Editor: Martin Kuebler