German SPD ups pressure on Merkel over Greek aid

* German cabinet due to approve Greek aid on Monday

* Merkel seeks cross-party support for Fri parliament vote

* Merkel attacked for hesitating, boosting cost of bailout

By Madeline Chambers

BERLIN, May 3 (BestGrowthStock) – Germany’s opposition Social
Democrats (SPD) will back Berlin’s contribution to a Greek
rescue only if Chancellor Angela Merkel commits to doing more to
fight market speculators, a senior party member said on Monday.

Merkel’s cabinet is due later on Monday to approve Germany’s
22 billion euro share of a bailout package, triggered by
European finance ministers on Sunday. The lower and upper houses
of parliament are expected to vote on it on Friday.

Joachim Poss, deputy head of the SPD parliamentary party,
said his party would decide whether to back the package after
consultations with the government but insisted Merkel had to
push for a European transaction tax and limit the influence of
market speculators.

“Mrs Merkel must boost her credibility in fighting
speculation and for an effective financial transaction tax in
Europe,” Poss told ZDF television.

“Mrs Merkel must make clear statements today,” he said.
Merkel is due to talk to leading lawmakers later on Monday.

Although it is unlikely the SPD will block the rescue, the
party wants to tie its support to other measures.

Merkel does not need the SPD’s support to get parliamentary
approval but she would prefer to have cross-party backing on
such a major issue. The SPD could stall the programme by
insisting on committee hearings, a move that could further
damage market confidence in the euro and embarrass Merkel.

German voters oppose a rescue for debt-ridden Greece but
many lawmakers and commentators have concluded there is no
alternative to save the credibility of the euro zone.

Europe’s biggest economy is to pay the biggest share of any
EU state, doling out for more than 25 percent of the loans. If
Greece defaults on the loan, German taxpayers will pay.

MERKEL U-TURNS

Merkel long resisted any German bailout of Greece, largely
because of stiff public opposition before a crucial regional
election on May 9; but she bowed to pressure from the EU and IMF
and at the weekend expressed support for the rescue.

Critics have accused Merkel of being partly responsible for
the scale of the crisis and size of the bailout because of her
procrastination which they say undermined market confidence in
the euro zone’s ability to sort out the crisis.

Once a darling of the EU, Merkel has in the last few months
baffled some of her colleagues in the 27-member bloc by
performing several reversals in her public statements on aid for
Greece. Many have been aimed at domestic voters.

Merkel wants to avoid any embarrassments before next
Sunday’s election in Germany’s most populous state of North
Rhine-Westphalia which could rob her ruling coalition of a
majority in the Bundestag upper house.

Poss said the SPD would have signalled its readiness to
cooperate earlier.

“Merkel, she has employed tactics ahead of the vote in North
Rhine-Westphalia which have caused her to be celebrated as the
‘Iron Lady’,” said Poss, referring to eurosceptic former British
Prime Minister Margaret Thatcher.

If the law goes through parliament, it faces a legal
challenge from German economist Joachim Starbatty who plans to
file a suit with the country’s Constitutional Court. He argues
that aid would breach a bailout ban set out in EU treaties.
For more stories on Greece, click [nLDE6420DZ]

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German SPD ups pressure on Merkel over Greek aid