Ger­man par­lia­ment ap­proves Greek bailout

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

Ger­many's par­lia­ment over­whelm­ingly ap­proved a third bailout for Greece on Wed­nes­day, re­mov­ing a key hur­dle to pro­vid­ing new loans to the coun­try and keep­ing it from de­fault­ing on its debts in as lit­tle as 24 hours.

The vote's re­sult also seemed to dis­pel any spec­u­la­tion that Chan­cel­lor An­gela Merkel would have dif­fi­culty get­ting her con­ser­va­tive bloc to sign on. Law­mak­ers voted 454-113 in fa­vor, with 18 ab­sten­tions. The ap­proval is among the last due from par­lia­ments across Europe, with the Dutch sched­uled to vote later Wed­nes­day, af­ter which Greece is ex­pected to get the first in­stall­ment of its new 86 bil­lion euro ($95 bil­lion) loans pack­age.

The coun­try needs the cash to make a debt re­pay­ment Thurs­day. The board of the Euro­pean bailout fund that will dis­burse the money will hold a tele­con­fer­ence Wed­nes­day night to dis­cuss the mat­ter.

The Ger­man ap­proval was never in doubt but in a sim­i­lar vote last month, 60 mem­bers of Merkel's con­ser­va­tive bloc voted against and some lo­cal media had spec­u­lated that even more could rebel this time as Ger­mans are in­creas­ingly skep­ti­cal about giv­ing Greece more money.

Though a party-break­down of the vote was not im­me­di­ately avail­able, the re­sult sug­gested that if any­thing, more of Merkel's law­mak­ers voted in line with her rec­om­men­da­tion

Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble, a se­nior mem­ber of Merkel's Chris­tian Demo­cratic Party who has been one of the harsh­est crit­ics of Greece, may have helped the cause as he lob­bied hard ahead of the vote for the pas­sage of Greek's third bailout in five years.

Schaeu­ble told law­mak­ers that ap­proval of the three-year loan pack­age is "in the in­ter­est of Greece and the in­ter­est of Europe." He noted that the Greek gov­ern­ment has taken big steps over the past few weeks to re­store trust with its cred­i­tors.

Schaeu­ble con­ceded that vot­ing in fa­vor of the bailout wasn't an easy one for him, but that "it would be ir­re­spon­si­ble to not use the chance for a new be­gin­ning in Greece" in light of the fact that the Greek par­lia­ment has al­ready backed a large chunk of re­form mea­sures de­manded by cred­i­tors.

Ger­many is the largest sin­gle con­tribu- tor to the bailouts and many in Schaeu­ble's party re­main skep­ti­cal. Merkel's coali­tion part­ner, the So­cial Democrats, and the op­po­si­tion Greens also backed the deal.

In the Nether­lands, law­mak­ers in­ter­rupted their sum­mer re­cess to de­bate the Dutch gov­ern­ment's sup­port for the Greek bailout.

Geert Wilders, the anti-Is­lam law­maker who is also a staunch op­po­nent of the Euro­pean Union and fi­nan­cial sup­port for Greece, opened the de­bate by call­ing Prime Min­is­ter Mark Rut­ter "the Pinocchio of the Low Coun­tries" for break­ing an elec­tion pledge not to ap­prove another bailout.

Rutte does not for­mally need Par­lia­ment's sup­port to sign off on the bailout, but is un­likely to do so with­out sup­port of a ma­jor­ity of law­mak­ers. Ahead of the de­bate, Rutte's own party said it sup­ports - grudg­ingly - the bailout, as does coali­tion part­ner the La­bor Party and proEu­ro­pean party Democrats 66, giv­ing the gov­ern­ment a com­fort­able ma­jor­ity in the 150-seat leg­is­la­ture. Un­der the terms of the deal, Greece has to make fur­ther spend­ing cuts and tax in­creases and im­ple­ment big re­forms to its econ­omy.

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