Wednesday

27th Jul 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

EU to tweak rules on Chinese 'dumping'

The EU Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Stakeholders' Highlights

  1. Counter BalanceWhat's New in the Investment Plan for Europe: Business as Usual or True Innovation ?
  2. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016
  3. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  4. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  5. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  6. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  7. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  8. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  9. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  10. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  11. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels