Sunday

3rd Jul 2022

EU hushes talk of multi-trillion bail-out ahead of German vote

  • Berlin gate. Merkel has offered robust support to Papandreou (Photo: Wolfgang Staudt)

European politicians are trying to avoid too much talk of a multi-trillion-euro revamp of the eurozone’s crisis strategy ahead of a crunch vote in the German parliament, with the German finance minister denying plans for such an increase to the bail-out fund and French ministers saying it is necessary to stay quiet until after the vote.

On Tuesday, German finance minister Wolfgang Schaeuble told N-TV: "We do not intend to increase it,” and separately called such moves “stupid”.

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

"I don't understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense," he said.

It is understood that European leaders are considering a plan to leverage the European Financial Stability Fund via the European Central Bank. The sums mentioned are in the range of €2 trillion, although sources have told EUobserver, the figures are still in flux and that more than one option is on the table.

Meanwhile, changes strengthening the EFSF agreed by eurozone leaders in July have yet to be approved by the Bundestag. A vote is scheduled for Thursday.

French finance minister Francois Baroin for his part said that a public discussion of the issue could not happen before Germany votes

"It is out of the question to put forward, three days from the Bundestag (lower house) vote, the issue of whether we should increase the fund,” he said. “Let's not open Pandora's box on something that is a red flag for Germany."

Meanwhile, Prime Minister Francois Fillon told the French parliament that plans to tackle "speculative attacks" would be unveiled after the German vote.

A straw poll amongst MPs from German Chancellor Angela Merkel’s CDU and sister party in the CSU group in the chamber showed how tight the vote could be.

Some 11 MPs voted against moves to alter the EFSF’s rules, according to a report from Reuters, while two abstained. The news agency quoted unnamed sources that predicted between two and five nays from the coalition’s Free Democrat junior partner and a further six abstentions. If 19 deputies vote against or abstain, Merkel will have to depend on opposition Social Democrat and Green votes, a development that could fatally wound the Merkel administration.

Separately, Greek Prime Minister George Papandreou travelled to Berlin to meet with his German counterpart and delivered a rousing speech to German industrial leaders in an attempt to rally spirits in the key European economy.

"I promise you, we Greeks will soon fight our way back to growth and prosperity after this period of pain," he told the Federation of German Industries.

"The eurozone must now take bold steps toward fiscal integration to stabilise the monetary union. Let's not allow those who are betting against the euro to succeed," he said.

Merkel for her part stressed that Berlin will not abandon Athens: "We will provide all the help desired from the German side so that Greece regains trust."

"If the stability of the euro is at stake - and the experience of the last few years shows that the difficulties of one country endanger our common currency – then that obliges us to show solidarity within the common currency.”

“We want a strong Greece in the eurozone… Germany is ready to give all the help that is required.”

Merkel coalition easily passes EU rescue-fund vote

In a major domestic victory German Chancellor Angela Merkel, the Bundestag - the country’s lower house of parliament - has robustly backed a strengthening of the eurozone’s multi-billion euro rescue fund.

Green crime-fighting boss urgently required, key MEP says

The European Parliament approved last week a non-binding resolution on illegal logging, calling to extend the EU public prosecutor's mandate to also cover environmental crime. The lead MEP on the file has called for urgent implementation.

News in Brief

  1. EU Parliament 'photographs protesting interpreters'
  2. Poland still failing to meet EU judicial criteria
  3. Report: Polish president fishing for UN job
  4. Auditors raise alarm on EU Commission use of consultants
  5. Kaliningrad talks needed with Russia, says Polish PM
  6. Report: EU to curb state-backed foreign takeovers
  7. EU announces trade deal with New Zealand
  8. Russia threatens Norway over goods transit

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Nato's Madrid summit — key takeaways
  2. Czech presidency to fortify EU embrace of Ukraine
  3. Covid-profiting super rich should fight hunger, says UN food chief
  4. EU pollution and cancer — it doesn't have to be this way
  5. Israel smeared Palestinian activists, EU admits
  6. MEPs boycott awards over controversial sponsorship
  7. If Russia collapses — which states will break away?
  8. EU Parliament interpreters stage strike

Join EUobserver

Support quality EU news

Join us