Bloomberg News

German Lawmakers Set to Approve Greek Aid Plan This Week

November 27, 2012

German lawmakers are set to approve Greece’s new aid package by the end of this week after euro-area finance ministers reached an overnight agreement to ease terms on emergency bailout aid for the country.

Top lawmakers from Chancellor Angela Merkel’s coalition and two of the three opposition parties voiced approval of the agreement as the lower house of parliament, or Bundestag, prepares to vote on the accord as early as Nov. 29. That would help Greece past one of Europe’s biggest political hurdles.

“We’ve always gotten a majority in the past and I don’t think that will change,” Christian Democratic Union parliamentarian Michael Grosse-Broemer, who’s responsible for gathering his party’s votes, told reporters today in Berlin. “It’s good that there was an agreement.”

The approval of Greek aid by German lawmakers would cap a year in which Merkel has had to tamp down criticism within her ranks and calls for the country’s exit from the euro area, particularly from her Bavarian allies in the Christian Social Union party. Lawmakers expressed relief that a Greek debt write- off wasn’t part of the agreement in Brussels.

Gerda Hasselfeldt, the Bundestag caucus leader for the CSU, said that Merkel met with delegates from the Bavarian faction late yesterday and lawmakers expressed support for the chancellor’s efforts to overcome the European debt crisis.

Breathing Room

The euro ministers gave Greece more breathing room to scale back its debt amid economic collapse, declaring after three years of false starts that Europe has found the formula for nursing the debt-stricken country back to health.

“We believe that these measures are appropriate for the solution of the problems that have emerged in Greece,” Hasselfeldt told reporters. “I also can’t say whether this is the last step. We have to keep an eye on this.”

Members of the budget committee tomorrow will pore over the details of the agreement forged by the euro ministers and the International Monetary Fund. Their approval will clear the way for a vote on Nov. 29, following a speech by Finance Minister Wolfgang Schaeuble in the chamber. A vote could also fall on Nov. 30, Hasselfeldt said.

The agreement “offers a change so that Greece can return to the markets and sustainable growth and competitiveness after long and difficult developments,” Schaeuble said today.

No Write-Off

Germany’s opposition leader, Social Democrat Frank-Walter Steinmeier, told ZDF television that he welcomed the agreement and signaled his party would back it, as did the opposition Green Party. The leadership of Merkel’s coalition partner, the Free Democratic Party, also plans to back the measure.

Part of the welcome for the agreement, which eases the terms of emergency aid to Greece, stemmed from the rejection of forgiving any of Greece’s publicly held debt, an option the government in Berlin has ruled out.

“It’s very good that there was no debt write-off involved, one that would not be legally possible,” Grosse-Broemer said. Hasselfeldt added that a write-off “would be the wrong signal for Greece, because it would relieve the pressure” of the markets.

While Merkel has won clear majorities for crisis-related votes in the Bundestag because of support from the opposition, she’s struggled with dissent that’s prevented her from squeezing out a majority in her own coalition.

“Some colleagues are fundamentally skeptical about this political vote,” Grosse-Broemer said. Still, they must consider “the consequences of what could happen if they don’t help, and that’s always been a difficult consideration,” he said.

To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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