German Bundestag Rallies Against Euro Bailout Fund
By EurActiv
Early polls on an upcoming vote in the German Bundestag show growing opposition to the EU’s crucial bailout fund and its expanded powers to purchase the bonds of indebted countries.
The upper chamber of the German parliament is due to vote on the new expanded powers of the European Financial Stability Facility (EFSF) on 23 September.
But a parliamentary push for equal say on how and to whom bailouts are disbursed threatens to derail that vote.
A body of opposition is building against German chancellor Angela Merkel and her government’s latest version of the EFSF. The German magazine Focus reported over the weekend that 23 members of Germany’s governing centre-right coalition are gearing up to vote against the EFSF.
Even Merkel’s most loyal followers in her own Christian Democratic party (CDU) are undermining her authority. Wolfgang Bosbach, a long time CDU member and deputy parliamentary leader, has said he will rally against the EFSF.
A document from the Christian Social Union (CSU), also a member of the ruling coalition, outlines its rejection to Merkel’s deal with the French president Nicolas Sarkozy on an economic government for euro zone states.
The CSU paper, to be released today (29 August), will seek treaty changes to European Monetary Union rules allowing bankrupt members to leave the euro zone altogether for ignoring warnings from the EU that they are not doing enough to reduce their debts.
Meanwhile, the Free Democratic Party (FDP), another coalition partner, is pushing for the EFSF bill to include a veto right for the German parliament in approving future applications to the euro zone’s rescue fund.
“Hysteria is sweeping Germany,” Klaus Regling, the EFSF’s director is reported as saying.
Storm of criticism
The president of the Bundestag, Norbert Lammert has been trying to preserve some calm in a storm of criticism against Merkel and the EFSF, reports EurActiv Germany. The CDU politician tried to play down the Bundestag’s demands to have more decision-making powers on euro bailouts.
“I assume that the German Bundestag will want co-decision on every new application for a bailout,” Lammert said in an interview on German radio.
The German Green party does not see much point in delaying bailouts under current economic circumstances but admits that opposition to the EFSF is building every day.
“It makes little sense to have the participation of every single parliament out of 17 in the euro zone. We need structures that can act. But I fear that the number of CDU and FDP parliamentarians who are rightly upset about their limited participation in bailout decisions is rising.” Gerhard Schick from the German Greens, told EurActiv.
In addition, the ongoing purchases of Spanish, Irish, and Italian bonds by the European Central Bank (ECB) have been met with caustic criticism by a majority of German politicians including their finance minister, Wolfgang Schauble.
As the Euro zone’s largest economy, Germany makes the biggest contribution to both financial bodies, the ECB and the EFSF.
