Parliament strongly backs new Greek bailout
The Local · 27 Feb 2012, 18:39
Published: 27 Feb 2012 17:11 GMT+01:00
Updated: 27 Feb 2012 18:39 GMT+01:00
Deputies voted by 496 to 90, with five abstentions, to approve the eurozone deal to hand Athens another €130 billion ($175 billion) ahead of a key EU summit later this week to ratify the package.
"The risks of turning away from Greece now are incalculable," Merkel told the 591 lawmakers of the Bundestag lower house who had gathered for a special session to vote on the Greek package.
"No-one can assess what consequences would arise for the German economy, on Italy, Spain, the eurozone as a whole and finally for the whole world" of a Greek bankruptcy, she added.
Merkel said Greece faced a path ahead that was long and not without risk, adding: "That goes also for the success of the new programme. Nobody can give a 100-percent guarantee of success."
Germany, Europe's biggest economy and effective paymaster, came under renewed pressure at a G20 weekend gathering in Mexico to agree a bolstering of the eurozone's defence funds to €750 billion.
Berlin believes that with calmer market conditions and lower bond yields for Spain and Italy, the risk of debt criis contagion is lower and the pressure to bolster the zone's defences has lessened.
"The government sees at present no necessity for a debate on the increase of the capacity" of the eurozone's current and future bailout funds, Merkel told parliament.
But she said it would first be necessary to see the results of a Greek operation to write-down nearly a third of its debt before making a final decision on the issue.
Potentially political significant domestically, Merkel had to rely on votes from the left-wing opposition to secure the majority for the motion. She only managed to win the backing of 304 of 311 MPs from her own centre-right parliamentary coalition.
Fifteen MPs from her coalition defied her in a September 29 vote on beefing up the eurozone's rescue fund and around a dozen lawmakers had indicated they might stick to their guns in Monday's vote.
Prior to the vote, German Interior Minister Hans-Peter Friedrich had caused a stir by saying Greece should be given "incentives" to leave the eurozone so it could then better put its fiscal house in order.
While stressing he did not mean Greece should be kicked out of the 17-nation bloc, his comments to news weekly Der Spiegel fly in the face of the government's repeated wish for Greece to remain in the eurozone.
A majority of Germans oppose giving more aid to Greece, a poll by the Emnid institute for Bild am Sonntag newspaper showed, with 62 percent saying the Bundestag should vote 'No' while 33 percent called for its approval.
"Billions for Greeks. STOP!" the mass-circulation Bild headlined on its front page Monday.
Under a plan hammered out by eurozone finance ministers, Greece would receive up to €130 billion in direct loans by 2014 in return for tough new austerity measures and tighter EU-IMF oversight of its economy. A private creditor bond writedown is worth another €107 billion.