Friday

1st Jul 2022

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.

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 ministers write to EU about new food labelling
  2. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  3. Council of the EUEU: new rules on corporate sustainability reporting
  4. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  5. Reuters InstituteDigital News Report 2022
  6. EFBWW – EFBH – FETBBHow price increases affect construction workers

Latest News

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

Join EUobserver

Support quality EU news

Join us