Germany might have to foot entire euro aid bill-SPD

BERLIN, May 11 (BestGrowthStock) – Germany’s opposition Social
Democrats (SPD) said on Tuesday they had not decided whether to
support a European rescue package for the euro, and warned the
country could end up footing the entire cost of the bill.

The package — 440 billion euros in guarantees from euro
states plus 60 billion euros in a European stabilisation fund —
includes some 123 billion in loan guarantees from Germany, a
German government source told Reuters on Tuesday.

Another source said Chancellor Angela Merkel’s cabinet had
approved Germany’s share in the aid, which has been strongly
criticized by conservative media and could face a legal
challenge at the country’s highest court.

SPD parliamentary whip Thomas Oppermann told ARD television
there were still too many open questions about the plan, which
parliament is due to begin debating next week.

“What happens if other countries who get aid from the
package drop out? Will the German share increase then?,” he
said.

The government has said the German share could rise because
not all EU member states would have the means to participate.

“In the worst case scenario, the Germans may have to
guarantee the 440 billion euros alone, and we won’t be able to
do that,” added Oppermann.

“After the Lehman crisis, after the Greek crisis, we’re for
the third time faced with the decision of approving packages the
German taxpayer will probably have to pay for in the end.”

The opposition Greens said on Monday the plan was unlikely
to come to a parliamentary vote before June.

Although Merkel does not need the SPD’s support to get the
financial aid package bill through the lower house of
parliament, she is keen for as much backing as possible due to
widespread public opposition to Germany financing any bailouts.

The make-up of the upper house is still unclear after
Merkel’s centre-right coalition lost its automatic majority in
elections in North Rhine-Westphalia at the weekend.

“We are Europe’s fools again!” Germany’s biggest selling
daily, Bild, said on its front page on Tuesday.

Meanwhile, hedge funds, banks and speculators could do what
they wanted on financial markets, Oppermann said.

“A substantial participation of the banks and hedge funds in
the costs of the crisis must be arranged,” he said.

“Today we’ll probably just see a simple authorisation of
credit again. That can’t be it. If we want to protect the
euro…then measures must be agreed that at least make
speculative trading on markets harder or even impossible.”

If the government did approve a bill to introduce a
financial transaction tax, then it was “not ruled out” the SPD
would back the European aid package, Oppermann said.

The centre-left SPD abstained from voting on the Greek aid
package last week after failing to push through an addendum in
support of a European financial transaction tax.

EU finance ministers said the International Monetary Fund
was expected to contribute 250 billion euros to the package,
taking the total to 750 billion euros, about $1 trillion.
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Investment Research

(Reporting by Dave Graham; Editing by Sonya Hepinstall)

Germany might have to foot entire euro aid bill-SPD