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Germany’s Lawmakers Back Greece’s Third Bailout

With Merkel under domestic pressure from lawmakers who have lost trust in Greece, the creditors agreed the tough deal at the weekend demanding that Athens cut pensions, raise value-added tax, and set aside 50 billion euros ($54 billion) of state assets to sell off.

With Merkel under domestic pressure from lawmakers who have lost trust in Greece, the creditors agreed the tough deal at the weekend demanding that Athens cut pensions, raise value-added tax, and set aside 50 billion euros ($54 billion) of state assets to sell off.

 

BERLIN – German lawmakers gave their go ahead on Friday for the euro zone to negotiate a third bailout for Greece, heeding a warning from Chancellor Angela Merkel that the alternative to a deal with Athens was chaos.

The Bundestag lower house of parliament, whose backing is essential for the talks to start, decisively approved the move by 439 votes to 119, with 40 abstentions.

Popular misgivings run deep in Germany, the euro zone country which has already contributed most to Greece’s two bailouts since 2010, about funneling yet more aid to Athens.

Finance Minister Wolfgang Schaeuble has questioned whether a new program will succeed, although the creditors’ offer to Athens includes the conditions for more austerity and economic reform that Berlin had demanded.

But Merkel argued for negotiating a new deal to prevent a Greek exit from the euro – the “Grexit” that might undermine the entire currency union – and said suggestions Athens might temporarily leave the euro wouldn’t work.

“The alternative to this agreement would not be a ‘time-out’ from the euro … but rather predictable chaos,” she told the Bundestag. “We would be grossly negligent, and act irresponsibly, if we didn’t at least attempt this way.”

Schaeuble himself has suggested that Greece might be better off taking such a time-out from the euro zone to sort out its daunting economic problems.

But the conservative chancellor said neither Greece nor the other 18 euro zone member countries were willing to accept the idea. “Therefore this way was not viable,” she added.

She still thanked Schaeuble – her most powerful ally – for his work in the long, grueling talks which produced the new bailout plan last weekend. Lawmakers gave him resounding applause while Schaeuble nodded and gave a wry smile.

Despite his misgivings, Schaeuble lined up with his boss. “I ask you all to vote for this request today. The government didn’t submit the request easily,” he told the Bundestag. “It’s a last attempt to fulfil this extraordinarily difficult task.”

Merkel also won support from the Social Democrats, the junior coalition partner. “Every debate about a Grexit must now belong to the past,” said Social Democrat leader Sigmar Gabriel, who is also vice chancellor.

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Posted by on Jul 17 2015. Filed under World News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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