Apr 23, 2014, 9:25 am (BST)
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German parliament roundly backs Greek lifeline
 
BERLIN, Feb 28 (BSS/AFP) - German lawmakers voted overwhelmingly yesterday to endorse a second multi-billion euro lifeline for Greece after Chancellor Angela Merkel warned failure to act would run incalculable risks.

Deputies voted by 496 to 90, with five abstentions, to approve the eurozone deal to hand Athens another 130 billion euros ($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.

But Merkel acknowledged that 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."

The Bundestag vote was not in doubt after two of the three opposition parties vowed to support it but it was done with some
reluctance.

"It's not an easy decision," Gerda Hasselfeldt, of the Christian Social Union, the Bavarian sister party of Merkel's Christian Democratic Union, said, warning that solidarity was not "unlimited."

Despite the motion's approval, German scepticism about Greece remains.

"The Bundestag will in the foreseeable future be dealing with a third (rescue) package for Greece," said SPD member Peer Steinbrueck, a former finance minister, adding that to really stabilise Greece, strong growth was needed.

"Billions for Greeks. STOP!" the mass-circulation Bild headlined on its front page Monday.

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.

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.

For Merkel, it was important on the domestic political front
that she garnered enough support from within her own camp to pass
the motion without the humiliation of having to rely on
opposition votes.

Seventeen members of her centre-right coalition of CDU and
Free Democrats defied her, with three abstentions, compared to
the figures for 'rebels' in September and October votes of 15 and
14 respectively.

The latest package for Athens, hammered out by eurozone
finance ministers last week, will come from the eurozone's
current bailout fund, the EFSF, and does not require the stumping
up of fresh funding.

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, the EFSF
and its successor, to 750 billion euros.

Berlin believes that with calmer market conditions and lower
bond yields for Spain and Italy, the risk of debt crisis
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 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.

Under the EU plan for Athens, Greece would receive up to 130
billion euros 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 euros.
 
 
 
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