German lawmakers win full say on euro bailout fund

 
City A.M. Reporter
German lawmakers have flexed their muscles to secure a full parliamentary vote on Eurozone crisis measures negotiated by chancellor Angela Merkel and her Eurozone peers, a move senior politicians said would give Merkel a stronger mandate.

The new vote comes just one month after Germany's Bundestag (lower of house of parliament) approved greater powers for the Eurozone rescue fund, and should pass without problems, but it risks delaying Europe's response to the debt crisis at a crucial juncture.

Merkel cannot agree to changes to the €440bn (£380bn) European Financial Stability Facility (EFSF) without approval at least from the Bundestag's budget committee, as a result of a constitutional court decision last month.

However, Merkel's Christian Democrats' (CDU) floor leader Volker Kauder demanded a full debate and vote by the German Bundestag (lower house of parliament) rather than just a vote by the 41-member budget committee, which might have been quicker and less risky while still meeting new rules on consulting MPs.

"On such important questions it's good if parliament gives the chancellor broad backing for her negotiations," said Kauder regarding the vote due early on Wednesday, before Merkel returns to Brussels for a second, decisive euro summit.

Major opposition parties the Social Democrats (SPD) and the Greens welcomed the vote, and indicated they would back proposals aimed at countering the debt crisis.

But they stopped short of confirming they would vote "yes", saying they needed to see documents detailing the proposals first.

With criticism ringing in Germany's ears from the head of the Eurogroup of single currency members, Jean-Claude Juncker, about it being slow to make decisions, Merkel met the heads of the main parties to seek consensus.

Juergen Trittin, parliamentary co-leader of the opposition Greens, said Merkel had told them the haircut for Greece would be "above 50 and below 60" per cent and that leveraging of the European Financial Stability Facility (EFSF) could be above €1 trillion.

Merkel will address parliament before the vote and before returning to Brussels for what should be a more decisive summit on boosting the firepower of the EFSF, raising the contribution of private banks to Greece's rescue, and getting European banks to increase their own capital to prevent contagion.