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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.

AFP/DAPD/The Local/mry

The Local (news@thelocal.de)

Your comments about this article

18:41 February 27, 2012 by carlm
What's "incalculable" is going to be the never ending bailouts for Greece and the inevitable additional dead beat countries needing bailouts.

The only reason I can figure for chancellor Pantsuit to want to risk/throwaway German taxpayer money is to further the kommie cause of kollectivism/unification. Kollectivism/unification of nations, will inevitably fail as it always does. The EU is furthering it's goal of becoming USSR II and will get the same results as USSR I.

This women, I'd call her a lady if she wore dresses, is an idiot of colossal proportions, though not so colossal as our own president Downgrade.
19:16 February 27, 2012 by Logic Guy
Well, I do find it interesting, in that EU leaders are unable to devise a more logical plan, one that does not involve handing out another, huge chunk of money.

There is nothing negative about loaning money, to someone who is actually in a position to repay. At some point, a lender will become an enabler.

Surely it's better to solve problems through a restructure, than to shower it will large sums of money. When will humans realize that money USUALLY is not the best solution? Are the rich and famous not miserable too?
20:25 February 27, 2012 by Bushdiver
This is by far not the end of this drama. This loan(Ha!hA!) will hardly see Greece through the year. There will be a need for more money plus another considerable write-off of millions. How do you get out of debt by digging a larger hole? There has to be more to all this than we know. Why is it so important to keep Greece afloat at any cost. The write-off millions without hardly a wink., as if they just lost 10 euro's in change. Anyway, there will be more countries needing money down the road. Greece is not the only one.
20:56 February 27, 2012 by michael4096
It's funny how this issue only ever gets negative comments. Some blame Greece, some Germany but everybody seems to feel that somebody is incompetent - or worse.

Another way of looking at it is to assume that many clever people are attempting a job that nobody has ever attempted before in the interests of most people affected. Sure, there are unforeseen problems, some even forseen and ignored, but when making major changes you must sometimes just do things and fix any problems later. The result is to never move on.

The EU and Euro are a long way from perfect. However, those that remember the times before consider today's crises quite tame to constant sword rattling, trade wars, currency limits, exchange rip-offs, an inability to compete with superpowers etc etc
22:12 February 27, 2012 by smart2012
Of course the parliament said yes. Otherwise how can Greece pay the tanks, submarines that Germany is obliging the Greek to buy......
22:38 February 27, 2012 by Jerr-Berlin
...this is a typical example of "financial sequencing" (google the economist Jack Rasmus)...when governemtns (any), issue government bonds and the major bond holders are the central banks themselves...when these bonds are ":junk" and can't be paid back...i.e a bad investment, they will introduce draconian measures on the "average" citizen" to try to recoup the money lost...the financiers will absorb no loss...as always, and this is the cancer stage of capitalism...the profits are privatized and the losses are socialized...this will always lead to some variant of social revolution...
03:26 February 28, 2012 by derExDeutsche
@ Jerr-Berlin

'as always, and this is the cancer stage of capitalism'

Wrong. as always, this is the Cancer stage of socialism and collectivism. it will most certainly lead to revolution, but the Revolution will be waged against the idiocy that is the EU. and the counter-revolutionaries such as yourself won't put up much of a fight.
07:34 February 28, 2012 by mos101392
When will they learn? Until Greece starts to export more, they will always be standing with their hands open needing a bailout. This second bailout is also temporary and in time the Greeks will be needing help once again. However, I don't think the Germans and rest of Europe will be in favor of a third bailout. It will also be political suicide for Merkel if she asks for a third bailout. It is inevitable that Greece exits the euro zone!
08:27 February 28, 2012 by McM
The Germans certainly don't use taxpayer money to loan to the Greeks. Like all good finance managers they borrow it at their cosy 2% AAA rating and lend it on to the Greeks at 7 to 8% factoring a nice win if they get it back with the ECB underwriting the risk. All the Germans have exposure to is credibility if the Greeks go belly up. Oddly the Greeks work longer annual hours than the Germans according to recent OECD figures. Over 2000 hours per year for the Greeks and the Germans a mere 1400 hours per year. But, the Greeks are mainly small business and farmer occupations that normally work long daily hours as apposed to German big business and high part time workers environment. Also the GDP is a bit like apples and oranges when you look at efficiency. And the big cruncher, what percentage of the population is actually working. The German economy certainly produces value and generates wealth becauses of it strong industrial nature and export culture. Sadly the Greeks don't have either or a way to generate wealth that can sustain their current system.

I hope that all this will bring some much needed assistance as they try to change their system but I can't see a fast fix at the moment.
15:23 February 28, 2012 by JSD
I'm sorry, McM... I have worked in Greece and now work in Germany. I do not know from where the OECD got those numbers. Let's face it, Greece has pretty much lied about everything, has institutionalized tax cheating and lobs desperate "you evil Nazi's" verbal bombs every other week. I'm not going to trust anything that they report in regards to their working culture. All I know is that my colleagues and I put in well over 45 hours a week (after breaks)--which comes to more like 1900 hours a year after vacation, public holidays and sick days. Other friends in other companies do the same thing. When I worked in Greece in a similar position, I may have put in 25 or 30 hours on a good week.

I don't think Germany and France should rule the government of Greece; however, I'd like to see an international organization globalize the collection of taxes for all countries--level the tax code for everyone. This would solve many of the problems the Greeks are now having. From what I see, the biggest problem for Germans is that there well off greeks are just not paying their fair share... and the rest of the EU is suppose to pick up this slack.

I don't think the EU should bail out Greece. They will be coming back for a 3rd loan next year, I guarantee it! I understand the need for "austerity" measures (although, I think it's more of a ... get your house in order and balance your checkbook type of thing). It's like a parent and child... when the child runs up a huge credit card bill. Does the parent just keep paying the bill? Or does the parent make the child learn from his/her mistakes and get them on a financially responsible path? The Greeks have acted and are acting like impetuous children. I think this loan is just putting a bandaid an deeper illness--and I don't think Germany nor France are equipped to be a "parent"--nor should they be! Compusive debting, lying and an overblown sense of entitlement is what drove Greece to this state. I just don't hold much hope for Greece turning itself around. In the bigger picture, it's a small country--better to let them default and boot their arses out. Let them figure it out on their own.
15:57 February 28, 2012 by coffejohn
This is too fast a moving story at the moment to come to a conclusion on, except to say that no matter how big a mess the adult Greek population have made of their economy I feel sorry for the younger generation who must feel abandoned by the rest of Europe.

Except Merkel?
15:59 February 28, 2012 by raandy
derExDeutsche I was going to clear that up also, we are dealing with socialism.

I wonder if parliament will be so enthusiastic for the next inevitable bailout?
19:03 February 28, 2012 by Englishted
Lets see what the people say .Ireland may put this to a vote.

But watch the pressure ,the threats,and the bribes start before they get the chance.
21:57 February 28, 2012 by LiterallySimon
"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."

This is embarrassing. Get your numbers right.

The coalition has 330 MPs, not 311.

311 is the overall majority in the house because there are 620 MPs in the Bundestag.

29 MPs were not present and didn't vote.

Of those 29 MPs 6 are members of the coalition, 23 sit with the opposition.

620 minus 29 is 591. So the majority needed is 296.

"Yes" votes from the coalition: 304.

Conclusion: Merkel didn't need a single vote from the opposition.

Not even the number fifteen is correct.

"No" votes from the coalition: 17

"Abstention" votes from the coalition: 3
07:48 February 29, 2012 by McM
Good point on the numbers. I was scratching my head about the fuzzy numbers interpretation of the vote in the Local article . Thanks for clearing that up. I think the Local writers have never let facts get too much in the way of poster baiting though.
15:17 March 1, 2012 by AlexR
It is not a "Greek" bailout, it is a "bank" bailout, and I'm glad that more and more often some media, economists and lawmakers are pointing that out. From the money of first bailout, only 19% were actually going to Greece. The second bailout is even worse. Not a *single* cent from the recent bailout goes to Greece, virtually all the money are being used to bailout the lenders/banks, mainly German, French and British.

On the other hand, I find it rather interesting that for the last 6 months the media and the politicians are obsessed and over reporting the 130 billion euros "Greek" bailout while at the same time they have hardly reported that ECB just provided 530 billion euros bailout to EU banks in addition to 489 billion euros in December.

http://www.bbc.co.uk/news/business-17203134

So in just two months, the ECB provided 1019 billion euros (i.e. our tax money) to the EU banks and there is hardly any discussion. In contrast, there was a 6-month frenzy about the 130bn "Greek" bailout? Why? The question is rhetorical of course.
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