Merkel’s FDP allies promise to back euro rescue fund

By Andreas Rinke

BERLIN (Reuters) – Chancellor Angela Merkel’s Free Democrat (FDP) coalition allies firmly support Germany helping to fund a euro zone rescue scheme, and eurosceptic voices in the party are isolated, a top FDP official told Reuters on Thursday.

Werner Hoyer, a minister of state under Foreign Minister Guido Westerwelle, said that his party would make this position totally clear at its congress in May.

“It is high time we made perfectly clear the advantages for a trading nation like Germany of having a strong and successful currency like the euro,” Hoyer, who is responsible for relations with key EU ally France, said in an interview.

Hoyer was responding to comments from Joerg-Uwe Hahn, an outspoken critic of FDP leader Westerwelle, that a recent EU summit deal on the new euro bailout mechanism from 2013 onwards “betrayed the party’s political foundations.” Hahn heads the FDP in the state of Hesse.

Westerwelle may face another leadership challenge in the next few weeks spearheaded by Hahn, who led a revolt last year. This follows the party’s weak performance in state elections earlier this month, partly due to its backing of unpopular nuclear power generation.

Hahn told the Financial Times Deutschland he was incensed at the German government agreeing to inject 22 billion euros cash into the European Stability Mechanism (ESM) to help ensure the permanent rescue fund’s triple-A investment rating.

Hahn played to deep-seated concerns in Germany that the euro zone has become a “transfer union” instead of a currency union, where fiscally strict Germany ends up paying for the spendthrift ways over over-indebted euro zone countries.

Such comments fuel concern in Europe that the FDP could try to undermine parliamentary support for the euro rescue scheme.

But Hoyer called Hahn’s comments “incomprehensible,” adding: “There will be no German nationalist regression in the FDP.”

The party is traditionally a blend of conservatives with some nationalist tendencies, backers of individual civil rights and economic “liberals” close to business like Westerwelle.

Hoyer said Hahn was underselling the FDP’s influence on the ESM deal. Through its control of the foreign ministry it had insisted on clauses about unanimity and that aid be offered only in extreme circumstances, which defended German interests.

He said paying into the ESM was necessary “to show those who speculate against the euro that behind the common currency there is a clear political will with funds needed to defend the euro.”

(Writing by Stephen Brown; editing by David Stamp)

Merkel’s FDP allies promise to back euro rescue fund