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German parliament approves Greek bailout fund

Bundenstag overwhelmingly votes in favour of eurozone bailout of $51bn for Athens as it battles against bankruptcy.
Last Modified: 30 Nov 2012 21:49
There is widespread anger in Athens against the terms for the bailout imposed by Germany [AFP]

Germany's parliament has overwhelmingly approved a eurozone bailout of $51bn for Greece, handing a much-needed financial boost to Athens as it battles against bankruptcy.

The Bundenstag voted by 473 to 100 with 11 abstentions on Friday to give the green light, after Chancellor Angela Merkel urged cross-party support.

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.

Ahead of the vote, Finance Minister Wolfgang Schaeuble 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," said Schaeuble.

Finance ministers of the 17 eurozone states agreed on Monday to make the new payment to Greece on 13 December.

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.

Al Jazeera's Nick Spicer, reporting from Berlin said: "It was passed in Germany, by a very large majority, but that is not to say that it was passed with smiles, there is a growing unease in Germany that there will have to be another bailout soon."

German sensitivities over European debt are growing as an election year approaches.

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.

Opposition politicians have accused Merkel of playing down the need for such a mmeasure for Greece, fearful of the impact on her chances in a federal election expected to take place on September 22.

'Irresponsible way'

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

 

 Barnaby Phillips examines why, despite common ties, Germany and Greece are now locked in conflict

"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 is inevitable, Steinmeier argued, telling Merkel: "All you have bought is time."

Finland and the Netherlands are the only two other eurozone countries in which parliamentary consent is needed to unfreeze the 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.

Despite the fact that Greece's government had carried out reforms and passed a harsh austerity budget, the release of the next round of money was delayed for weeks by a disagreement between its lenders.

These had agreed to grant Greece a two-year delay in the speed of spending cuts, in order to take some of the pressure off the country's heavily depressed economy.

Eurozone governments initially opposed calls to cut Greece's debts by simply writing off some of the $195bn of bailout loans already extended.

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Source:
Al Jazeera And Agencies
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