Schäuble promises hard line on eurozone bailouts

Schäuble promises hard line on eurozone bailouts
Photo: DPA
German Finance Minister Wolfgang Schäuble has promised members of parliament that strict conditions will be attached to any future bailout of eurozone members.

“There must be no financial help without binding promises” once the permanent European Stability Mechanism (ESM) comes into force in two years’ time, Schäuble said in a letter to MPs belonging to Angela Merkel’s centre-right coalition.

The letter sent Friday was obtained Tuesday by news agency AFP.

Parliament is expected to vote on introducing the ESM in the autumn. Public opinion in Germany has been increasingly critical of European Union measures to rescue heavily-indebted countries within the eurozone, including Greece, Ireland, and Portugal.

Germany is the largest financial contributor among European nations when it comes to bailing-out eurozone partners.

Some MPs, including from within the ruling majority, have threatened to abstain or even oppose the ESM if strict conditions are not applied, such as involving private investors in any bail-out plan.

“That’s something demanded by all parliamentary groups, and if it’s not included, the vote could be very close,” Free Democratic MP Oliver Luksic told AFP.

“If (such a measure) isn’t included in the bill, I’ll have to seriously think” about opposing it, he added.

A majority of pro-business Free Democratic Party delegates at a congress Saturday voted down a motion opposing the ESM, but debate of the matter was lively.

In his letter Schaeuble stressed that “a response to mistakes of the past cannot be to go back on European integration, but to ensure an adaptation and evolution of this integration.”

The ESM, a permanent crisis mechanism, will be set up in the eurozone in mid-2013.


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