German lawmakers overwhelmingly back Greek bailout, clearing path for loans
German lawmakers overwhelmingly approved another bailout for debt-ridden Greece on Wednesday, removing the last major obstacle for Athens to receive an emergency infusion of funds to avoid an imminent default.
The Greek government is now expected to receive an installment of loans just in time to repay a debt owed to the European Central Bank on Thursday. Missing that deadline would almost certainly result in Greece stumbling into a default and then a disastrous exit from the Eurozone, the group of 19 nations that share the euro currency.
Athens and its European partners agreed to the three-year, $95-billion bailout package last week -- Greece’s third international rescue in five years. But the deal still required approval by several national parliaments to take effect, most notably in Germany, where many lawmakers are hostile to shelling out more money to save a country they view as irresponsible and unreliable.
Dozens of representatives have voted against bailouts for Athens in the past, most recently in a preliminary vote last month, when 60 members of Chancellor Angela Merkel’s ruling party bucked her authority and said no to a new rescue package.
But the wide margin of approval Wednesday, by a tally of 453-113, with 18 abstentions, attested to the chancellor’s hold on power and, especially, the influence of her popular hard-line finance minister, Wolfgang Schaeuble, one of Greece’s toughest critics.
Although Schaeuble has said publicly that kicking Greece out of the Eurozone might be preferable to another bailout, he urged the Bundestag, Germany’s lower house of Parliament, to ratify the new rescue plan “in the interest of Greece and the interest of Europe.”
He acknowledged his own continuing skepticism about whether the government in Athens would follow through on the harsh demands contained in the agreement: more austerity cuts, tax hikes and labor reforms in an economy that has lost 25% of its value over the last five years. A quarter of the workforce, including more than half of Greeks under age 25, is out of a job.
Analysts predict that the economy will continue to shrink this year and next. But Schaeuble insisted that the new rescue plan offered the path to Greece’s renewal, even though the two previous bailouts, which ran on similar lines, failed.
“If Greece stands by its obligations and the program is completely and resolutely implemented, then the Greek economy can grow again,” he said. “The opportunity is there. Whether it will be used, only the Greeks can decide.”
Germany’s vote followed approval of the deal in fellow Eurozone countries Austria, Estonia and Spain on Tuesday and other nations such as Finland and France earlier. The Dutch parliament was the final group of lawmakers to give its approval, voting Wednesday after heated debate and an acknowledgment by Prime Minister Mark Rutte that he had broken his campaign promise not to give Greece any more money.
The bailout’s fate in the Bundestag was never in doubt because Germany’s two largest parties, Merkel’s Christian Democratic Union and the Social Democrats, govern in coalition. The question was whether Merkel could keep her rank and file in line or whether her authority might be weakened by a bigger revolt than in past votes, as some news outlets were forecasting.
In the end, 63 of her backbenchers dissented, about the same number as last month.
The comfortable victory for Merkel, the Eurozone’s most powerful leader, dispelled fears that, somewhat ironically, she might land in a parallel predicament to that of Greek Prime Minister Alexis Tsipras, who is facing a much more serious rebellion by members of his left-wing Syriza party over the bailout.
Last week, Tsipras lost enough support among Syriza lawmakers that a vote of confidence in the Greek Parliament and, possibly, a snap election look likely in the next two or three months.
European capitals are concerned that the increased political instability, at an already delicate time, will cause Athens to delay or backtrack on implementing the measures expected of it, including further slashing pensions, ending subsidies to farmers and forcing closed professions to open up to greater competition.
Follow @HenryHChu on Twitter for news out of Europe
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