German lower house backs Greek aid package

By Dave Graham

BERLIN (BestGrowthStock) – German lawmakers on Friday backed a bill to provide billions of euros in aid for Greece, clearing a major hurdle for the package which Chancellor Angela Merkel has said would determine the future of the European Union.

After an accelerated legislative process, the Bundestag lower house of parliament passed the unpopular bill with 390 deputies voting in favor, 72 against, and 139 abstaining. The Bundesrat upper house is due to vote on it later on Friday.

In an emotional speech urging Germany to remember its historical responsibility toward Europe, Finance Minister Wolfgang Schaeuble led calls in support of the bill that could see Germany lend 22.4 billion euros to Greece over three years.

The Bundesrat is also expected to approve Germany’s part of the 110 billion euro rescue plan agreed by the International Monetary Fund (IMF) and euro zone members at the weekend.

German President Horst Koehler, a former IMF managing director, must then sign the bill into law.

As expected, a group of German academics filed a lawsuit at the country’s highest court against the Greek aid. Legal experts have been skeptical about the suit’s chances of success.

Schaeuble, 67, said the aid would uphold Germany’s postwar legacy of serving peace in Europe, 65 years after World War Two, an event he referred to as Germany’s “darkest chapter.”

“The joint European currency, the joint European economic area were right,” he said. “There is no comparable alternative to them in the 21st Century in the age of globalization. That is why we must defend the joint European currency.”

Despite initial resistance to agreeing Greek aid due to massive popular opposition to a bailout, Merkel said this week the future of Europe depended on approving the package.

On the streets of Berlin, Germans were skeptical about whether the rescue package would save Greece.

“The government isn’t telling us the truth,” said bar manager Robert, who only gave his first name. “I think Greece needs more money than they’re saying. Some say it’s to save Greece, but others say it’s to save the banks. Meanwhile, Greece is getting more broke.”

BANKS TARGETED

Schaeuble said given the options available to legislators, policymakers agreed a bailout was the only option.

“The President of the Bundesbank, the President of the European Central Bank, the director of the IMF, and many others say it would be devastating to risk allowing a member of the euro zone, Greece to become insolvent,” he said.

Greek debt restructuring was not the answer, he added.

The voting has coincided with increasing political scrutiny of the bailout in the run-up to an election on Sunday in North Rhine-Westphalia (NRW), Germany’s most populous state.

If Merkel’s center-right coalition of conservatives and pro-business Free Democrats (FDP) cannot hold NRW, they will lose their majority in the Bundesrat upper house of parliament, making them reliant on the opposition to pass many laws.

The aid bill got backing from Germany’s opposition Greens, though the main opposition Social Democrats said they would abstain after failing to push through an addendum to the legislation in support of a European financial transaction tax.

“We’re not voting against aid for Greece but we won’t sign a blank cheque,” said SPD leader Sigmar Gabriel, adding the financial sector had to be brought to account for the damage it had wrought. “We need the financial transaction tax.”

Schaeuble said there was no point in pushing for the tax because it would not get enough international backing, but urged world leaders to speed up reform of financial markets.

“I feel thoroughly impatient about the way the international community has been learning lessons from the banking and financial crisis,” he said.

Stock Investing

(Additional reporting by Sarah Marsh, Christopher Lawton and Paul Carrel; Editing by Charles Dick)

German lower house backs Greek aid package