* Slovakia last euro zone nation to vote
* New powers aim to fight debt crisis
* Coalition party opposes deal, threatens govt
By Michael Winfrey and Martin Santa
BRATISLAVA, Oct 11 Slovak Prime Minister Iveta
Radicova will put the future of her government on the line on
Tuesday before lawmakers cast ballots on a euro zone rescue
mechanism that one of her junior ruling parties looks set to
Slovakia is the last member the 17-member bloc yet to vote
on a deal agreed by its leaders in July to boost the size and
powers of the European Financial Stability Facility.
Three of the four parties in the right-of-centre government
want to push through the mechanism aimed at preventing the
Greece debt crisis from spiralling out of control.
But a fourth, the Freedom and Solidarity (SaS) party, has
threatened to vote against it, arguing that one of the poorest
members in the single currency club should not have to pay for
the huge debts racked up by richer states like Greece or Italy.
Radicova and the like-minded coalition partners have vowed
to push through the ratification even if they have to ask for
the opposition's support -- a scenario that would almost
certainly trigger the collapse of the government.
The vote on Tuesday may fail, but the parliament can put the
ratification to repeated ballot within hours or days after that
once a political agreement with the opposition is in place.
Last-ditch coalition talks failed to produce an agreement on
Monday evening, and sources close to Radicova said she would
decide on one of three options by Tuesday morning: to tie the
EFSF vote to a confidence vote, to resign before the vote, or to
resign after the vote in case it fails.
Speaking to reporters on Monday evening, she did not mention
her threat to resign but indicated she faced a tough choice.
Coalition leaders were due to meet one more time at 9 a.m. (0700
GMT) on Tuesday.
"I will make a responsible decision by morning," she said.
Any further delay to the ratification of the EFSF expansion,
which was originally envisioned to happen by mid-October, could
rattle markets already under pressure from signs that the crisis
is already spilling beyond Greece's borders.
Belgium won agreement by bank Dexia on the
nationalisation of its Belgian division on Monday and the Greek
central bank effectively nationalised a small bank on Monday.
German Chancellor Angela Merkel and French President Nicolas
Sarkozy said after talks late on Sunday that they would unveil
new measures in the coming weeks to solve the debt crisis, but
gave few details.
Analysts said the brinkmanship, although it would not
torpedo the expansion of the EFSF in the end, would still weigh
on global sentiment towards the euro zone even as the crisis
"The SaS should consider that it could trigger not just a
collapse of the government, which is a secondary issue right
now, but cause turbulences in Europe and on the markets," said
Grigory Meseznikov director of the Institute for Public Affairs.
All 17 euro zone states must ratify the EFSF expansion for
it to go active. The deal boosts its size to 440 billion euros,
allows it to buy bonds from the market to support countries
under attack by markets, bail out members who need funding and
help them prop up failing banks.
Slovakia's leftist opposition-leading Smer party supports
the EFSF but has refused to vote for it on Tuesday, betting that
government discord can give it a political opening.
It has demanded a government reshuffle or an early election
for its votes, meaning those coalition partners that support the
EFSF can approach it within hours or days after any potential
failed vote to seek a deal to push it through.
"There are three alternatives, the prime minister needs to
decide which alternative she will prefer if the EFSF will not be
approved or if there is no agreement," Bela Bugar, head of the
ruling Most-Hid party told television TA3.
Once the EFSF is voted in, deputies must then also approve a
package of domestic legislation to implement the deal -- an
issue analysts say should not pose a problem once Radicova
secures support either from SaS or the opposition.