Monday

16th May 2022

Eurozone countries hold series of crucial votes

  • The German parliament is due to vote on Thursday (Photo: Deutscher Bundestag/Stephan Erfurt)

A swathe of European parliaments are this week due to decide on the strengthened temporary bailout fund, the EFSF, but the eurozone debate is moving faster than the political process.

MPs in Finland, Germany, Slovenia, Estonia and Austria will in the coming days all cast their vote on whether to accept a July agreement of eurozone leaders to enhance the €440bn fund so that it can loan pre-emptively and buys bonds of struggling eurozone countries on the secondary market.

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

While eight of the 17 eurozone countries have already greenlighted the fund - which needs the approval of all to get off the ground - the states where the new powers and the merits of eurozone bailouts have been most hotly contested still have to vote.

This is especially so in Germany, due to vote Thursday. While the bailout fund is expected to be approved, analysts are already wondering at what political cost to German chancellor Angela Merkel, whose authority is being tested by fellow conservatives in Bavaria and by members of the liberal party, the junior coalition partner. Much is expected to be made of whether the fund scrapes a majority or gets an absolute majority.

Finland, another country where the debate has strongly focussed on whether fiscally prudent countries should be required to loan money to trouble fellow euro members, is set to vote on Wednesday.

However national politicians in these countries are in the awkward position of voting on a fund that is likely almost immediately to be substantially altered.

Over the weekend it emerged that the EU, under immense pressure from Washington, is considering considerably enhancing the European Financial Stability Facility to finally give it the power to tackle all aspects of the crisis - including under-capitalised banks and contagion to Italy and Spain.

Under the mooted plans EFSF money would be leveraged through the European Central Bank to give it up to 2 trillion euros in fire-fighting aid.

Politicians are already on the defensive about the new proposals, with it unclear whether they in turn would also require parliamentary approval.

"There are no plans in the Netherlands, and as far as I know none in Finland either, to raise the amount in the EFSF," Dutch Prime Minister Mark Rutte said Monday (26 September) following a meeting with his Finnish counterpart Jyrki Katainen, reports Dutch News.

"We need the package of 21 July and are, both in Finland and in the Netherlands, extremely busy on ensuring it can be implemented. The rest is speculation," said Rutte.

Opposition politicians in Germany are already protesting the potential plans, which may also including establishing the permanent bailout fund - the European Stability Mechanism - a year earlier than planned.

"The chancellor must very quickly make clear that there are no change to the basic workings of the EFSF," said Christian Lindner, secretary general of the liberal party, on Monday. The "character of the provisional bailout fund" must not be changed later and that should be politically and legally clear, he said.

Hermann Otto Solms, finance expert for the liberals, told Die Welt newspaper that if finance minister Wolfgang Schaeuble does not immediately clarify that "there is no leverage, then we will not vote in favour of the law."

The last eurozone to vote on the fund is Slovakia on 11 October. It is also the state considered to be most likely to reject the fund's new powers.

Until this date, policy makers in the eurozone will have to continue the difficult juggling act of letting parliamentary process take its course while hurrying to keep up with the pressure of doubting markets.

EU finance chiefs cool on Geithner plan for eurozone

A unprecedented visit by US treasury secretary Timothy Geithner to a meeting of European finance ministers in Poland was coolly received by the gathered European economy chiefs, while the meeting itself saw little advance made on how the eurozone can deal with its ever-deteriorating debt crisis.

EU looking at trillions in shock-and-awe plan to end crisis

A plan involving a multi-trillion euro leveraging of the eurozone's rescue fund via the European Central Bank is under consideration as the EU comes under global pressure to act quickly to prevent the bloc's crisis kicking off a global recession.

Euro states set to agree second loan for Greece

Eurozone leaders look set to greenlight a new loan for Greece as well as establish what will effectively be a European Monetary Fund, according to draft conclusions circulating on Thursday afternoon.

Opinion

Making or breaking the European Union - Barroso’s U-turn?

President Barroso knows all too well that his name will not belong in the list of great European statesmen unless he makes a U-turn to leave a legacy worth mentioning in future history books, Philippe Adriaenssens, President of the Young European Federalists.

Revealed: Big Oil shaped EU's gas-cutting strategy

Internal documents found EU Commission president Ursula von der Leyen and energy commissioner Kadri Simson coordinated their Russian gas cutting strategy with oil CEOs to determine which measures were "feasible".

Lagarde signals summer interest rate hike

European Central Bank president Christine Lagarde signalled an interest rate increase possibly as early as July, but some experts warn for a repeat of the 2011-2012 debt crisis.

News in Brief

  1. German ruling party in regional election blow
  2. EU expanding arms-for-Ukraine programme
  3. Reports: EU drafts plans for Russia energy payments
  4. Pro-Russian hackers targeted Eurovision
  5. EU to donate extra €400m for Africa vaccines rollout
  6. Spain plans five-days 'menstrual leave' and to ease abortion rules
  7. MEPs reject proposal for stricter 2030 target on cars and vans
  8. Study: EU spent €341m on AI border technology

Stakeholders' Highlights

  1. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  2. Nordic Council of MinistersNordic ministers agree on international climate commitments
  3. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  4. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link
  5. Nordic Council of MinistersHuge support for Ukraine
  6. EFBWW – EFBH – FETBBWorkers want EC to limit subcontracting chains in construction

Latest News

  1. Sweden to join Finland in applying for Nato
  2. Russia sanctions and energy dominate Next WEEK
  3. Will 'Putin's Nato' follow Warsaw Pact into obscurity?
  4. EU reaches deal on flagship cybersecurity law
  5. EU to help Ukraine export grain — amid food shortages fears
  6. Revealed: Big Oil shaped EU's gas-cutting strategy
  7. EU: Ukrainians hesitating to register for protection
  8. UK says 'no choice but to act' over post-Brexit trade rules

Join EUobserver

Support quality EU news

Join us