UPDATE 2-German opposition challenges Merkel on Greek aid

* SPD budget spokesman says party won’t fast-track approval

* Germany holds regional elections on May 9

* Greece must refinance 8.5 bln eur bond on May 19

(Adds comment, details)

By Matthias Sobolewski and Andreas Rinke

BERLIN, April 21 (BestGrowthStock) – Germany’s main opposition party
threatened on Wednesday to block government plans to fast-track
parliamentary approval of aid for debt-ravaged Greece, a move
which could end up delaying a critical bailout for weeks.

Ahead of a key regional vote, the budget spokesman for the
Social Democrats (SPD), Carsten Schneider, told Reuters his
party did not want to rush through any bill that might result in
Germany issuing guarantees for billions of euros worth of aid.

“We won’t go along with this,” he said. “First the
government can’t decide what they want to do and now they want
to put us under pressure with the legislative process.”

While the SPD supports aid for Greece, it appears keen not
to let conservative Chancellor Angela Merkel push back a
parliamentary discussion on the issue until after a key regional
election on May 9th in the state of North Rhine-Westphalia.

Polls show Germans are strongly opposed to a bailout for
Greece, and Merkel has been reluctant to pledge any aid in the
run-up to the vote in Germany’s most populous state, fearful it
could hurt her party’s support there.

By threatening to resist a fast-track procedure after the
vote, the SPD may be hoping to force Merkel to accept an aid
debate sooner than she would like.

Merkel had hoped to wait until after the vote and then, if
Greece made a formal request for support, push an aid law
through parliament rapidly.


If Germany pledged aid immediately after the election, that
would leave 10 days to secure parliament’s approval before a key
trigger event for markets tracking Greece’s efforts to manage
its debt – the May 19 refinancing of an 8.5 billion euro bond.

A spokesman for Merkel’s conservatives in parliament
estimated that if Greece were to request aid in the coming
weeks, the cabinet could approve a bill at the earliest on May
12 and push a law through both houses of parliament by May 25.

Investors are increasingly pricing in expectations that
Greece will tap the aid package, which would include funds from
the International Monetary Fund (IMF) and euro zone states,
sooner rather than later.

The conservative spokesman said one possibility, as Greece
does not need all the aid at once, would be for the IMF to
provide initial funds needed for the bond refinancing, with
France and later Germany offering further support in steps.

Germany is expected to provide 8.0 billion euros of a 30
billion euro emergency aid package from euro zone countries.
France is pledging a maximum of 6.3 billion euros.

Despite Merkel’s majority in the Bundestag lower house, any
attempt to accelerate the legislative process generally needed
the approval of opposition parties, said Uwe Andersen, a
political scientist at the University of Bochum.

Merkel’s conservatives rule NRW with the pro-business Free
Democrats (FDP) — the same pairing which govern together at a
national level — and the two must hold the state to retain
control of the Bundesrat upper house of parliament.

Opposition to an accelerated approval process for the aid
has come not just from the centre-left SPD. The conservative
Christian Social Union (CSU), Bavarian sister party to Merkel’s
Christian Democrats, has also signalled it could do likewise.

Stock Today

(Writing by Dave Graham and Noah Barkin; editing by John
Stonestreet, Ron Askew)

UPDATE 2-German opposition challenges Merkel on Greek aid