ECONOMY

Schaeuble seeks yes vote on Greek bailout as IMF role set aside

schaeuble-seeks-yes-vote-on-greek-bailout-as-imf-role-set-aside

German Finance Minister Wolfgang Schaeuble asked lawmakers to back Greece’s third bailout, saying it offers a “sustainable path” even though the International Monetary Fund hasn’t committed to footing part of the bill.

Schaeuble’s letter to parliament Monday is part of the buildup by Chancellor Angela Merkel to the lower-house vote on Wednesday, one of several in the euro area on the 86 billion- euro ($95 billion) aid package that requires further economic reforms and austerity by Greece.

With the IMF saying it will decide on joining the bailout only after the first progress report in the fall, Merkel said she expects the fund will eventually contribute even as the risk of further defections in her parliamentary group grows.

“The IMF is a critical question for all of us,” deputy caucus leader Michael Fuchs said in a Bloomberg Television interview. “If the IMF is on board, if the IMF really says – yes, we’ll come on board in September and continue to finance Greece next year, then of course I will vote pro.”

While Merkel’s coalition has consistently backed bailouts during Europe’s debt crisis, dissent has grown with each ballot and 60 lawmakers in her 311-member caucus voted against even holding talks on further aid to Greece last month.

The proposed bailout is a “tough reform package with a tight web of oversight,” Gerda Hasselfeldt, parliamentary leader of the Merkel-affiliated Christian Social Union, said in a statement. Conditions attached to the deal justify voting in favor on Wednesday, she said.

Schaeuble asked German lawmakers for authorization to back the aid program at a meeting of the European Stability Mechanism, the euro area’s financial backstop, on Wednesday evening, hours after the Bundestag votes in Berlin. He also asked them to unlock a first payment of 26 billion euros, mainly to repay Greece’s creditors and recapitalize banks.

Merkel’s caucus is being asked to sign off relying on her confidence that IMF Managing Director Christine Lagarde will back the fund’s participation in October.

“Everybody has to ask themselves whether they have a good justification for a ‘no’ vote,” Peter Tauber, general secretary of Merkel’s Christian Democratic Union, told reporters in Berlin.

Fuchs said he hasn’t decided whether he’ll vote with the chancellor. Failure to get a clear IMF commitment by Wednesday would mean “there could be more” opposition than the 60 dissenters in a July ballot that authorized bailout negotiations with Greece, he said.

The IMF wants to await the “capacity and willingness of the Greek authorities to deliver the required adjustment” and adoption of debt-relief measures by the European creditors before deciding on its role, according to an ESM document provided to the German parliament and obtained by Bloomberg. “The IMF contribution to the financial assistance is at this stage undetermined.”

[Bloomberg]