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Merkel beefs up bailout fund
Source: Agencies |
September 1, 2011, Thursday
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GERMAN Chancellor Angela Merkel's Cabinet yesterday approved a plan to beef up the eurozone's rescue fund, the first step toward its passage in Europe's biggest economy.
Finance Minister Wolfgang Schaeuble said the German government had "stressed its determination to secure the stability of the euro with powerful equipment at the eurozone level."
The plans now go to the German parliament, which will start considering the changes next Wednesday. A vote is expected on September 29.
Lawmakers have to sign off on a decision made by eurozone leaders in July to equip their bailout fund with new preemptive powers, such as the ability to buy distressed government bonds to support their price or extending short-term credit lines to countries before they are in a full-blown crisis.
They also decided to bring its effective lending capacity up to 440 billion euros (US$638 billion) from the current 250 billion euros.
Merkel now has to win over skeptics in her center-right coalition, who view the prospect of more bailouts for debt-laden countries on Europe's periphery with increasing unease.
Schaeuble said: "It remains the case that there will only be loans from the rescue fund when there is a danger to the financial stability of the eurozone as a whole, and only in exchange for a strict financial and economic policy reform program."
Many lawmakers are calling for parliament to be given more say in future bailouts.
On Tuesday, Michael Meister, a deputy parliamentary leader of Merkel's conservatives, called for lawmakers to be able to vote on whether the fund helps out new countries and whether its capital is increased in future.
Merkel, in an interview with the Nordkurier daily, offered assurances that she takes "the rights of parliament very seriously."
Parliament "will, in all questions (regarding) the European rescue fund, have the level of involvement that lawmakers themselves consider necessary," she added.
Before parliament considers the latest plans, Germany's highest court will deliver its ruling on complaints against the bailout fund and last year's package for Greece next Wednesday. The ruling could address the issue of parliament's rights.
Finance Minister Wolfgang Schaeuble said the German government had "stressed its determination to secure the stability of the euro with powerful equipment at the eurozone level."
The plans now go to the German parliament, which will start considering the changes next Wednesday. A vote is expected on September 29.
Lawmakers have to sign off on a decision made by eurozone leaders in July to equip their bailout fund with new preemptive powers, such as the ability to buy distressed government bonds to support their price or extending short-term credit lines to countries before they are in a full-blown crisis.
They also decided to bring its effective lending capacity up to 440 billion euros (US$638 billion) from the current 250 billion euros.
Merkel now has to win over skeptics in her center-right coalition, who view the prospect of more bailouts for debt-laden countries on Europe's periphery with increasing unease.
Schaeuble said: "It remains the case that there will only be loans from the rescue fund when there is a danger to the financial stability of the eurozone as a whole, and only in exchange for a strict financial and economic policy reform program."
Many lawmakers are calling for parliament to be given more say in future bailouts.
On Tuesday, Michael Meister, a deputy parliamentary leader of Merkel's conservatives, called for lawmakers to be able to vote on whether the fund helps out new countries and whether its capital is increased in future.
Merkel, in an interview with the Nordkurier daily, offered assurances that she takes "the rights of parliament very seriously."
Parliament "will, in all questions (regarding) the European rescue fund, have the level of involvement that lawmakers themselves consider necessary," she added.
Before parliament considers the latest plans, Germany's highest court will deliver its ruling on complaints against the bailout fund and last year's package for Greece next Wednesday. The ruling could address the issue of parliament's rights.
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