Tuesday

15th Jun 2021

Bundestag likely to approve Cyprus bailout

  • The German Bundestag has so far approved all bailouts negotiated by the Merkel government (Photo: Valentina Pop)

The German parliament is likely to approve Cyprus' bailout programme despite concerns over a widening funding gap and growth projections which may prove too optimistic.

German finance minister Wolfgang Schaeuble on Tuesday (16 April) held a two-hour session with key MPs in the budget and EU affairs committees, laying out what the German government managed to achieve when negotiating the €10 billion bailout for Cyprus.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

A vote in the plenum of the Bundestag is scheduled for Thursday.

Green MP Tobias Lindner who took part in the Schaeuble debate told this website "everything indicates there will be a large majority on Thursday" approving the bailout.

The decision is likely despite "questioning at length" how a €6 billion funding gap is to be filled given Cyprus' rapidly shrinking economy and how the ballooning debt is to be kept at "sustainable" levels, Lindner added.

Meanwhile, the issue of alleged money laundering by Cypriot banks - the number one topic in Germany ahead of the eurozone deal - seems to have been kicked into the long grass.

Schaeuble told MPs that Berlin managed to convince Nicosia in accepting "two external audits, which they didn't want," said Lindner.

But since the report on how banks implement anti-money laundering rules is not expected until next month, the German opposition is no longer making this a prerequisite for approving the bailout now.

"Like any other bailout, each tranche will be disbursed only when the troika finds that the government sticks to the conditions of the programme. So the reports on money laundering will be linked to future tranches," the Green MP said.

Another MP who took part in the exchange, Johannes Kahrs from the Social-Democrats, told EUobserver that his group will vote in favour, despite there being "no question about how badly the thing was negotiated."

"It is more a question of European solidarity," Kahrs noted.

His party had previously threatened to veto the bailout deal if there were too few reassurances about money laundering and about Russian oligarchs who bank in Cyprus paying their share of the cost.

"We got the participation of depositors above €100,000. But as opposition, we cannot expect to get everything through," Kahrs said.

Schaeuble himself seemed to be confident of the Bundestag vote already on Monday, when he was quoted by the Neue Osnabruecker Zeitung as saying he is "counting on a broad majority, also with a broad support from the opposition."

The German parliament has been often singled out as one of the most powerful in Europe, as it has to approve every euro-bailout.

So far, it has not made use of its veto on any of the rescue packages or on the creation of the eurozone bailout fund, mostly because Angela Merkel's government is negotiating deals fine-tuned for the approval of the Bundestag, rather than risking a parliament showdown.

Bundestag approves Cyprus bailout

German MPs have approved by a large majority a €10bn EU-IMF bailout for Cyprus, but MPs in Nicosia may still derail the deal.

News in Brief

  1. BBC and others boycott Belarus press circus
  2. Report: EU and US to unveil aircraft subsidy truce
  3. Putin refuses to guarantee Navalny will survive jail
  4. Erdoğan agrees to pull out mercenaries from Libya
  5. EU starts sale of first bonds for Covid-19 recovery fund
  6. Germans told not to 'storm pharmacies' for Covid pass
  7. Indonesia warns Covid-19 wave may not peak until July
  8. WTO chief: 'drop trade barriers on Covid-19 treatments'

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. China officially joins Russia as a danger to Nato
  2. German Greens face reality check amid CDU gains
  3. EU Parliament wants Europe to take lead on sea-rescues
  4. MEPs urged to end gas-funding, fix cross-border projects rules
  5. Biden in Brussels - what's in the 'in-tray'?
  6. Yemen foreign minister to EU: to stop the war, talk to Iran
  7. Brexit grumbles overshadow UK summit
  8. Former French PM to work for Russian oil firm

Join EUobserver

Support quality EU news

Join us