NEWS

Merkel to press dissenting lawmakers to support Greece bailout

merkel-to-press-dissenting-lawmakers-to-support-greece-bailout

German Chancellor Angela Merkel is planning a charm offensive to win over dissenting lawmakers ahead of a vote by the lower house of parliament on a third Greek bailout.

Merkel and Finance Minister Wolfgang Schaeuble will lobby lawmakers Tuesday to support the 86 billion-euro ($95 billion) aid package, saying it offers a “sustainable path” even though the International Monetary Fund has yet to commit to footing part of the bill. Following the meetings with her parliamentary group, the two plan a test vote on the measure.

“I’m also very sure that the IMF will contribute to the program, just as we declared this to be indispensable,” Schaeuble said in an interview with ZDF television late Monday. He expressed understanding for those opposing the aid, while saying he’ll also “tell them my arguments why I think the right decision is to agree” to the assistance in exchange for further economic reforms and austerity by Greece.

Merkel’s coalition has consistently backed bailouts during Europe’s debt crisis, though 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 measure, which the Bundestag will vote Wednesday, is also likely to draw support from Merkel’s governing partner, the Social Democrats, as well as some opposition lawmakers. Germany has been the biggest country contributor to previous Greek bailouts.

With the IMF saying it will decide on joining the aid program only after the first progress report, Merkel has said she expects the fund will sign on in the fall. That’s not enough for some members of her caucus, where the risk of further defections is growing.

Voting against

“I will not be able to consent,” Hans Michelbach, a lawmaker in the Christian Democratic Union’s Bavarian sister party and a senior finance committee member, said in an interview Tuesday on broadcaster ZDF. “I am a professional businessman, I can read budgets and it is clear that we can no longer reach debt sustainability. I believe that we must be honest — that the beginning of a transfer union is in the making.”

In a letter to parliament Monday, Schaeuble asked for authorization to approve the bailout at a meeting of the European Stability Mechanism, the euro area’s financial backstop, on Wednesday evening, hours after lawmakers vote in Berlin. He also asked them to unlock a first payment of 26 billion euros, mainly to repay Greece’s creditors and recapitalize banks.

Gerda Hasselfeldt, parliamentary leader of the Christian Social Union, the smaller of the two parties in Merkel’s bloc, urged her faction also to fall in line. The proposed bailout is a “tough reform package with a tight web of oversight” that justifies a vote in favor, she said in a statement.

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

“Everybody has to ask themselves whether they have a good justification for a ‘no’ vote,” said Peter Tauber, general secretary of Merkel’s CDU.

[Bloomberg]