Wednesday

27th Oct 2021

Merkel urges Bundestag to back Greek bailout

  • The Bundestag vote is due at 9am local time on Wednesday (Photo: Tobias Koch)

Angela Merkel and Wolfgang Schaeuble have urged German MPs to back the Greek bailout ahead of a Bundestag vote on Wednesday (19 August).

The German chancellor and her finance minister, speaking in separate interviews, praised the Greek government for bowing to German demands for tough reforms.

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  • Migrant crisis to 'preoccupy Europe much, much more than the issue of Greece', says Merkel (Photo: iom.int)

"It doesn't help if we are all nice to each other and in three or four years everything is worse than it already is today”, Merkel told the ZDF public broadcaster on Sunday.

She said the Greek U-turn was “thanks to the tough stance of many countries, but also Wolfgang Schaeuble and the German government”.

She also said the International Monetary Fund (IMF) is likely to contribute money, in autumn, to the €86 billion aid programme.

The IMF had previously said it will only take part if there is Greek debt relief and pensions reform.

Merkel told ZDF it might be possible to extend the maturity dates of Greek loans and to reduce interest rates, but that there would be no debt write-downs.

“There is still leeway on the extension of maturities, on interest rates … but it’s also clear that within the eurozone there can be no haircut, no reduction in debt”, she noted.

“Lagarde, the head of the IMF, made very clear that if these conditions are met, she will recommend to the IMF board that the IMF takes part in the programme from October”, Merkel added.

"I have no doubts that what Lagarde said will become reality”.

Schaeuble told the Bild tabloid, also on Sunday, the bailout deal is “responsible” and that Greece won’t get its money unless reforms are “implemented point-by-point”.

He added: “After truly arduous negotiations, they understand now in Greece that the country cannot get around real and far-reaching reforms”.

The Bundestag vote is due at 9am local time on Wednesday.

If it goes through, the European Stability Mechanism, the EU’s Luxembourg-based crisis fund, will give the green light to disburse the first tranche, of €23 billion, on Thursday morning.

The money will allow Greece to repay a €3.2 billion loan to the Europan Central Bank the same day.

Merkel’s grand coalition has 504 MPs in the 631-member parliament.

About 60 of them rebelled in an earlier vote on Greece in July, with some sceptics, such as Wolfgang Bosbacher, a prominent CDU member, continuing to say No, and with Bild predicting that the rebels’ ranks could grow to more than 120 this time around.

“I’m afraid that we are once again buying ourselves a little time with a very, very large amount of money”, Bosbacher told press over the weekend.

Asylum reform

Merkel’s ZDF interview, her first public remarks after her summer break, also highlighted the severity of the migrant crisis in Europe.

She said the issue will “preoccupy Europe much, much more than the issue of Greece and the stability of the euro” in future.

She also indicated that Germany is in favour of reforming EU asylum laws, which, in their current state, put the burden of frontline countries, such as Greece and Italy, where asylum seekers first enter EU territory.

"The issue of asylum could be the next major European project, in which we show whether we are really able to take joint action”, Merkel said.

With Germany expecting to receive 450,000 asylum applications this year, far-right groups have perpetrated more than 200 arson attacks against migrant shelters in the past eight months

“That is unworthy of our country”, the chancellor said.

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