GERMANY: There is no guarantee that a new bailout package for Greece will succeed, Chancellor Angela Merkel told German lawmakers ahead of a parliamentary vote needed to approve the 130 billion euro ($175 billion) rescue programme
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327687
GERMANY: There is no guarantee that a new bailout package for Greece will succeed, Chancellor Angela Merkel told German lawmakers ahead of a parliamentary vote needed to approve the 130 billion euro ($175 billion) rescue programme
- Title: GERMANY: There is no guarantee that a new bailout package for Greece will succeed, Chancellor Angela Merkel told German lawmakers ahead of a parliamentary vote needed to approve the 130 billion euro ($175 billion) rescue programme
- Date: 28th February 2012
- Summary: BERLIN, GERMANY (FEBRUARY 27, 2012) (REUTERS) EXTERIOR GERMAN PARLIAMENT 'REICHSTAG' EUROPEAN AND GERMAN FLAG OUTSIDE OF 'REICHSTAG'
- Embargoed: 14th March 2012 12:00
- Keywords:
- Location: Germany, Germany
- Country: Germany
- Topics: International Relations,Economy,Politics
- Reuters ID: LVA4FBP81M7B4M9LP5RZ5C6L7G2D
- Story Text: Germany's parliament was almost certain to endorse a second Greek bailout on Monday (February 27) but Chancellor Angela Merkel was torn between domestic pressure to stop throwing good money after bad and global calls to boost Europe's crisis defences.
The world's leading economies in the G20 piled pressure on Berlin at the weekend to drop opposition to a bigger European bailout fund, telling Europe it must put up extra money if it wanted more help from other countries.
Merkel told German lawmakers ahead of the vote that there wont be a "big bang" solution of Greece's crisis. "We are in the middle of a long process of consecutive measures, one that will take years."
And she wanted that there is no guarantee that the new bailout package for Greece will succeed.
"There is no 100 percent guarantee that the second bailout programme will succeed," Merkel said, adding that the benefits of backing the programme outweighed the risks.
Merkel also said she expected Germany would contribute 11 billion euros of its contribution to the new permanent bailout fund, the European Stability Mechanism (ESM), this year and the second portion could be paid out next year.
"The government is prepared to pay the German share into the ESM (European Stability Mechanism ) faster than initially planned. We will talks about this on Thursday at the meeting. But a precondition is that the other member states also go along. I can imagine that Germany will pay half its contribution, meaning about 11 billion euros already this year and the second portion could be paid out next year. That would mean the effectiveness of the ESM could be reached in two years and not five as planned," Merkel said.
But Merkel, whose country provides the lion's share of the emergency funds, first faces a tough vote in the Bundestag (lower house), which may force her to rely on the opposition to pass a 130-billion-euro ($175 billion) rescue program for Greece, its second since 2010.
If the number of rebels rises to at least 20, the bill will pass thanks to the support pledged by the centre-left opposition Social Democrats (SPD) and Greens.
Merkel will face a determined band of rebels from her own coalition. Only on Sunday (February 26) the German Interior Minister Hans-Peter Friedrich was quoted in the weekly "Der Spiegel" that Greece would have better chances of economic recovery if it left the euro zone.
Merkel said she recognized the opposition to the bailing-out programme but said that the benefits outweigh the risks by far.
"I do hear those who say that Greece is a bottomless pit, a hopeless case. Whether it would not be better for all for Greece fo reintroduce the Drachma, to devaluate its currency and win back its competitiveness....In short, whether the euro zone would not be better without Greece. Those question have their validity. But after weighing all facts against each other, I come to the conclusion that the chance of the new programme outweigh the risks."
If the number of rebels rises to at least 20, the bill will pass thanks to the support pledged by the centre-left opposition Social Democrats (SPD) and Greens.
That would be a humiliation for Merkel, raising doubts about her ability to cope with demands for more emergency funding for the euro zone and about her coalition's survival until elections due in 2013, when she is expected to seek a third term.
Facing huge domestic pressure to make sure Germany's euro zone partners only get aid in return for tough fiscal reforms - which Greece has failed to deliver - Berlin has sent conflicting signals on whether it will soften its stance. - Copyright Holder: REUTERS
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