NEWS

German Parliament sets possible Greek bailout vote for Tuesday

german-parliament-sets-possible-greek-bailout-vote-for-tuesday

German lawmakers may vote on more aid for Greece as early as Tuesday if euro-area finance ministers back a bailout plan agreed by the Greek government and creditors.

A bridge loan for Greece remains on the table in case ministers don’t sign off on a full bailout Friday. That could be approved by Germany’s budget committee rather than the full lower house, Norbert Lammert, president of the lower house of parliament, said in a letter to lawmakers Thursday.

Chancellor Angela Merkel’s government is keeping its options open as German lawmakers contemplate interrupting their summer break for the second time in five weeks to deal with Greece’s crisis. The Finance Ministry said the memorandum of understanding reached Tuesday by Greece and its creditors falls short of conditions in a July 12 accord by euro-area leaders, mainly on the International Monetary Fund’s role.

“The IMF needs to clearly commit itself to staying on board and so far it’s not enough,” German Deputy Finance Minister Jens Spahn said on Deutschlandfunk radio. “We will possibly know on Friday whether we as the federal government will ask the German parliament to support this program.”

A Finance Ministry document said Germany wants the IMF to “fully subscribe” to bailout conditions and that a planned privatization fund has to be able to take over Greek banks “together with recapitalization of up to 25 billion euros” ($28 billion).

With Greek financing needs higher than expected, debt sustainability “is one of the most important open issues,” according to the document obtained by Bloomberg.

Lammert said he tentatively plans to convene lower-house lawmakers on Tuesday or Wednesday.

[Bloomberg]