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Parliament approves €43.7 billion for Greece

The Local · 30 Nov 2012, 14:12

Published: 30 Nov 2012 12:25 GMT+01:00
Updated: 30 Nov 2012 14:12 GMT+01:00

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MPs voted by 473 to 100 to give the green light to the release of €43.7 billion in aid to debt-wracked Greece agreed after torturous talks between eurozone finance ministers. There were 11 abstentions.

The result of the vote was secured in advance after the two main opposition parties vowed to support Chancellor Angela Merkel's ruling centre-right coalition, with less than a year until elections.

But a breakdown of the vote showed that Merkel did not have to rely on the opposition to win. From her own coalition ranks, 297 deputies voted in favour, enough to carry a majority from the 584 votes cast.

Before the vote Finance Minister Wolfgang Schäuble had pointed to the significant efforts made by the Greek government to implement reforms demanded in return for the aid and warned of the consequences of letting Athens fall.

"Without our support, it would not only be the future of Greece at stake, but also the future of the eurozone as a whole," Schäuble said.

"The potential impact of a Greek default on other eurozone countries and the eurozone would be serious. The consequences are not foreseeable. We cannot start a process that could end in the break-up of the entire eurozone."

Although the opposition Social Democrats (SPD) voted largely in favour, political debate has raged over whether German taxpayers will eventually have to accept losses on Berlin's holdings of Greek debt.

Many in Germany consider that a so-called haircut - or write-down of Greek debt holdings - by public institutions like other eurozone governments and the European Central Bank is inevitable.

And opposition politicians have accused Chancellor Angela Merkel of playing down the need for a haircut on Greece, fearful of the impact on her chances in the federal election expected to take place on September 22.

Schäuble said that speculation about such a haircut sent "exactly the wrong incentive" to Greece, arguing that it reduced the pressure on the government in Athens to enact structural economic reforms.

But the SPD's parliamentary head of the SPD, Frank-Walter Steinmeier, accused members of the governing coalition of being inconsistent and making comments in an "irresponsible way" about Greece's future in the eurozone.

"Wait and see how things develop - that may sometimes have been good for peace in the coalition, but for our image in Europe, for Germany's image in Europe, it was not," he fumed.

A haircut for Greece further down the line was inevitable, Steinmeier argued, telling Merkel: "All you have bought is time."

Merkel's challenger next year, former finance minister Peer Steinbrück said ahead of the vote that his Social Democrats would vote in favour "not to support the government but out of political responsibility for Europe."

Der Spiegel magazine pointed to the difficulties faced by the SPD as it battles to define itself and its policies ahead of the federal election.

"With less than a year to go before general elections, the centre-left opposition party finds itself struggling to distance itself from Chancellor Angela Merkel on the election season's most important issue: the euro crisis," it wrote in its online edition.

"And that failure could weigh heavily on its chances" in September, it suggested.

Story continues below…

Following a series of landmark decisions by the country's top court, Germany's parliament must vote on any new rescue packages in the eurozone or major changes to existing packages.

Finland and the Netherlands are the only two other eurozone countries where parliamentary consent is needed to unfreeze funds for Greece.

Also included in the package is a debt buy-back scheme, in which Greece is loaned money to repurchase its debt at lower prices on the market.


The Local (news@thelocal.de)

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Your comments about this article

17:35 November 30, 2012 by Kennneth Ingle
I wonder what these politicians would say, if it was their own money which is being given away. The old, sick and out of work, are all told that Germany is unable to pay them reasonable benifits, because there is no cash in the Kitty.

For banks and incapable governments it would seem there is always more than enough.
18:05 November 30, 2012 by jmclewis
The definition of insanity is doing the same thing repeatedly and expecting a new result.
18:09 November 30, 2012 by IchBinKönig
'Although the opposition Social Democrats (SPD) voted largely in favour, political debate has raged over whether German taxpayers will eventually have to accept losses on Berlin's holdings of Greek debt.'

It is clear by the fact that the Money now sent to Greece is referred to as 'Aid', that Germany will not be paid back. The Union has gone from a Creditor / Debtor relationship to a Donor / Recipient relationship.

Jin Liqun, Chairman of Peoples Bank of China said so himself. This man controls China's Sovereign wealth, and does not trust that any investment in Europe will be paid back. Hence, China will not 'Invest' in Europe.

Anybody that debates on the side that says Germany will be paid back its loans in any meaningful matter, is either a fool or liar.

One of the most enlightening interviews on the topic of why China, or anybody for that matter, refuses to 'Invest' in Europe is laid bare faced. here is the Interview. No Spin, No BS. This is what you are actually facing in Germany. Germans, you are being robbed. But let the debates rage, just remember, it might be the Thief who tells you his hand is not in your pocket.

18:24 November 30, 2012 by truth is treason
In the above photo Is Angie telling the people behind "There is 50 Billion Euro limit on Dave Camerons' Credit card, so if we give Greece 43.7 Billion euros there should be enough to buy the next round of drinks" I read somewhere that the Governments and ECB take a hair cut but Goldman Sachs et All have written their contracts where they get paid in full. To find out how Greece got in such a big mess search this sentence and read this Article: The Secret Goldman Sachs-Greece Deal That's Described As 'A Very Sexy Story Between Two Sinners'
20:03 November 30, 2012 by Englishted
"Without our support, it would not only be the future of Greece at stake, but also the future of the eurozone as a whole," Schäuble said.

He has changed his tune again last time I heard it didn't matter if they stayed or went the mighty €uro was indestructible. Hypocrisy knows no limit in this on going saga.
20:40 November 30, 2012 by michael valerio
I though the German tax payer had more sense.
05:18 December 1, 2012 by Steve1949
The reality is that the EU and Euro are a joke. They give these multi-billion Euro donations out like they were giving some beggar on the street 50 cents. All these politicians have lost touch with reality. They already know they will never see this money again and still there is very little hesitation to giving more away. Maybe we all should stop paying on our outstanding debts. If the government can continue to throw money away like this they should have enough to cover our debts as well.
12:30 December 1, 2012 by gorongoza
There are things which German tax payers get pissed off with - not paying sums after sums of money in an endless pit.

I have finally come to think that it gives them a sense of "the rich man of Europa" - a badge they proudly value.
12:43 December 1, 2012 by Repatriated
The Germans penny pinch when it comes to their own people's welfare, but are more than willing to throw money at everyone else just to give the appearance that we really care. So what happens when Spain, Portugal, Irland, Italy and a few other countries thereafter come to Germany with cup in hand and ask (read demand) the same treatment that Greece received. Where in the hell is all this money going to come from to bail out the rest of Europe's sqandering economies...print more money like they do in the USA?

The idea of uniting countries having incompatible cultures, language and work ethics into the Euro, or as a matter of fact into a United Europe is nothing more than an ill conceived socialistic and idealistic idea that is a recipe for failure in the long run.
14:11 December 1, 2012 by raandy
In the end after more bailouts it will be easy to see that a debt reduction would be the better move, Your first loss is usually the smallest loss.

There is no way the economy can move forward under these draconian austerity measures.The debt to GDP ratio is still expanding , the bail outs do little to reduce that or stop it from increasing.

If you consider the EU unemployment is around 11.7% and has slipped back into recession the bail out solves nothing except extending the inevitable.
04:50 December 14, 2012 by US-TommyBoy
The PIIGS are leading the Germans to economic slaughter.

But then here in the US....the Fed is leading us to slaughter.

Do not worry about inflation, be very worried about stagflation and a depression.
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