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Berlin to have position on bailout by week's end

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Berlin to have position on bailout by week's end
Chancellor Angela Merkel meets with Greek Prime Minister Alexis Tsipras. Photo: DPA.
11:59 CEST+02:00
Update: Germany said on Wednesday it still needed time to review an international bailout agreement hammered out by Greece and its creditors, but aimed to take a stance by the week's end.

A finance ministry spokesman said Berlin required "sufficient" time to comb through the 400-page text setting out the fiscal and other policy measures that Athens must take in exchange for the €85 billion ($94 billion) lifeline.

"We assume that we will have a position by the end of the week," he told reporters.

Greece's deal must still be approved by the country's parliament as well as by other European legislatures – including the German Bundestag – before it takes effect.

Greece and its creditors -- the EU, the European Central Bank and the International Monetary Fund -- are under pressure to finalise the deal by August 20th when Athens must repay some €3.4 billion to the ECB.

The spokesman said Berlin had only received the email containing the sweeping so-called memorandum of understanding (MOU) on a fresh rescue at 1930 GMT on Tuesday and that it required time to pore over.

"Both options are still on the table -- approval of the MOU or a further bridging loan" giving Athens emergency funding to meet the ECB payment deadline, he said.

Chancellor Angela Merkel's spokesman Steffen Seibert told the same briefing that the government was "intensively reviewing" the text and praised the Greek government's approach to the negotiations which he said had been "the most constructive we have seen for several months".

He said Merkel had spoken to Greek Prime Minister Alexis Tsipras twice by telephone this week but declined to provide further details.

But when the government does decide on its position, Merkel may have a tough time wrangling support in the Bundestag, especially from within her own party. 

Defying party lines

Recent efforts by the head Merkel's conservative Christian Democratic Union (CDU) party to coerce MPs into following party lines and approve a third Greek bailout deal seem to have backfired, making some dissenters stand stronger. 

In a report by Bild, Germany's biggest tabloid newspaper, 17 MPs from the CDU said on Wednesday that they would not be swayed in the next vote by the party chief's urging.

"My stance on the so-called rescue programme for Greece is known and my voting behaviour will not change, even under pressure and with threats,” said Rheinisch-Bergischer Kreis MP Wolfgang Bosbach, who last month resigned from his position as chair of the home affairs select committee in protest over Germany's support of Greece's bailout. 

"I don't know any colleagues who would change their minds."

Last month, Bundestag representatives voted on whether to open new negotiations with Greece and 60 CDU MPs voted against the motion.

The negotiation plans were ultimately approved, but there's a chance more MPs could rebel now that more cash is on the table.

CDU parliamentary leader Volker Kauder said on Sunday that those with a record of defying the party line on the bailout plan would be in a way punished.

"Those who voted no [on the question of whether to open a fresh round of negotiations with Greece] can't remain in committees where we're trying to keep our majority, like the budget or Europe committees,” he told Welt am Sonntag.

"The party group sends colleagues into committees so that they can represent the position of the group."

But for the MPs interviewed by Bild, Kauder's threats only seemed to make them more resolute.

“How I vote will depend on the submitted proposal. However, Kauder's instructions have not made it easier for me to give a ‘yes' vote, but will actually make it much harder,” said Karlsruhe-Land MP Axel Fischer.

Further austerity

A third bailout programme is expected to reach around €86 billion overall.

According to Greek media, Greece's creditors - the European Commission, International Monetary Fund (IMF) and European Central Bank (ECB) - expect the country to achieve a primary government budget surplus of 0.25 percent in 2015, largely by introducing further harsh austerity measures.

Details of the creditors' demands published by Kathimerini newspaper on Tuesday showed that there would be increased taxes on shipping companies, and an end to tax breaks for farmers and tourist islands.

Greece will also recruit extra tax investigators to crack down on avoidance, and gradually abolish early retirement schemes.

 
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