Germany set to back Greek aid after Merkel lobbies lawmakers
The German parliament appeared set to back a third bailout for Greece on Wednesday after Chancellor Angela Merkel lobbied lawmakers in a bid to stem a revolt within her caucus against the aid package.
Germany’s lower house may approve the measure by a wide margin after a straw vote late Tuesday indicated 56 members of Merkel’s parliamentary caucus would oppose approving the 86 billion-euro ($95 billion) aid package and four would abstain, a Christian Democratic party official said. In July, 60 of her 311 lawmakers voted against talks on further aid to Greece.
The Bundestag was recalled from its summer recess for the second time to vote after a week of hard lobbying. Merkel voiced confidence that the International Monetary Fund will help provide loans, while Finance Minister Wolfgang Schaeuble said extending Greece’s financial lifeline is in Europe’s interest. Merkel can also count on support from the Social Democrats, her coalition partner, and the opposition Greens.
“The aim of the reforms is that Greece can stand on its own feet again as quickly as possible” Schaeuble told lawmakers in Berlin. “The program in total is made up of substantial reforms. The IMF has declared its basic readiness tho stay involved’ in the Greek bailout.
For all the dissent in their party bloc, approval ratings for Schaeuble and Merkel are among the highest for German politicians. Seventy percent of respondents said Schaeuble is doing a good job and 67 percent said the same about Merkel, according to an Infratest Dimap poll for ARD public television in late July.
A day after parliaments in Spain, Austria and Estonia backed the bailout, Germany’s Bundestag is meeting this morning and Dutch lawmakers will hold a debate a few hours later. Parliamentary approvals will clear the way for the European Stability Mechanism, the euro area’s financial backstop, to set in motion the first payout to Greece in time to meet a 3.2 billion-euro payment to the European Central Bank due Thursday.
Merkel’s coalition has consistently backed financial rescues during Europe’s debt crisis, though dissent has grown with each ballot. Germany has been the biggest country contributor to euro-area bailouts.
In closed-door remarks to her caucus before the test vote, Merkel said Greece faces a tight web of economic-reform conditions for its bailout, according to the party official, who asked not to be named because the meeting was private. She also told members she has no doubt the IMF will eventually join the aid program, the official said.
Schaeuble, speaking before Merkel, said it would be irresponsible and against Germany’s interest to reject the aid plan, the official said.
Right direction
‘‘We all agreed that the result of the negotiations with Greece marked a substantial step forward compared to the months before,” Peter Altmaier, Merkel’s chief of staff in the chancellery, told reporters after the straw poll. “Schaeuble was a good negotiator.”
Bailout opponents argue that Greece is in a debt trap and that policy makers are bending euro-area rules to hold the currency union together.
“I will not be able to consent,” Hans Michelbach, a lawmaker in the Christian Democratic Union’s Bavarian sister party, told ZDF television. “I am a professional businessman, I can read budgets and it is clear that we can no longer reach debt sustainability. I believe that we must be honest — that the beginning of a transfer union is in the making.”
[Bloomberg]
