Merkel MP ally: German CDU likely to okay Greek aid

BERLIN, June 7 (Reuters) – Germany’s conservatives will likely agree in parliament to further aid for Greece and to a permanent euro zone rescue mechanism ESM despite grumblings now, the Bundestag leader of Chancellor Angela Merkel’s party said.

Peter Altmaier, who leads the CDU parliamentary group, said on Tuesday much would depend on Greece’s progress on privatisation and on what the cornerstones of fresh aid for Athens will be.

“Those are points that will play a role for the vote and for how united the vote will be,” Altmaier said at a meeting with journalists.

“But my impression is that within the parliamentary group and within the party we are aware of our responsibility for the European process.”

A new Greek bailout would need to be approved by all 17 euro zone governments and it would face some political opposition in several northern European donor countries.

But Germany is by far the most important state because it would contribute most to the rescue, and other governments would probably take their cue from Berlin.

The planned European Stability Mechanism (ESM), a rescue facility due to operate from mid-2013, is also controversial in Germany which wants clear guidelines on private sector involvement in bailouts which it handles.

Tough talk from a vocal minority of backbenchers has raised concern Merkel may have a tough time convincing parliament that Greece should receive fresh aid, but she still has broad support within her coalition and among key opposition leaders.

On Monday, Gerhard Schick, finance policy expert of the opposition Greens party said it was in Germany’s interest that Greece not default and signalled the Greens would not stand in the way of a European solution.

Altmaier said that a hard restructuring of Greek debt involving substantial losses for private bond holders was no longer a topic.

“On Greece, I just want to say again that a compulsory restructuring (of debt) is off the table and has been off the table for at least 14 days or three weeks,”

Some parliamentarians, speaking on condition of anonymity, have said hard restructuring is probably inevitable but they added that going down this path now would be too risky — politically and economically.

Merkel is probably not going to need formal approval from parliament on a new aid deal for Greece if as expected it is handled by the temporary rescue mechanism, the European Financial Stability Facility (EFSF), but bypassing it altogether could prove suicidal for her.

Merkel and Finance Minister Wolfgang Schaeuble will personally brief ruling party parliamentarians on the Greek situation on Wednesday evening.

On Friday, parliament may vote on two non-binding resolutions related to the crisis. (Reporting by Gernot Heller and Annika Breidthardt; editing by Stephen Nisbet)