Maltese parliament approves revamped euro rescue fund

(VALLETTA) - The Maltese parliament on Monday unanimously approved new powers for the 440-billion-euro ($590 billion dollars) euro rescue fund -- the penultimate eurozone state to vote on the plan.

The beefed-up European Financial Stability Facility (EFSF) has to be approved by all 17 eurozone states to come into effect. Slovakia will be the last country to vote on Tuesday.

Malta's parliament had planned to ratify the agreement last week, but the vote was adjourned until Monday.

Despite the delay, the agreement had always been very likely to be approved, as the opposition Labour party leadership said it would vote in favour.

It will see Malta's contribution to the fund increased to 704 million euros from 398 million, mostly in loan guarantees.

The Luxembourg-based facility was set up last year as a bulwark in the eurozone's debt defences.

The fund will be allowed to loan money as a precaution before states get too deep into trouble, buy sovereign bonds of struggling eurozone states on the secondary market and provide countries with money to recapitalise banks.

After Malta, Slovakia will be the last eurozone state to vote but the Slovak government is bitterly divided over the agreement.

The eurozone's second poorest country, which has itself implemented biting austerity measures, Slovakia was the only one to refuse to participate in last year's emergency loan for Greece.