June 9, 2011
Lawmakers from Chancellor Angela Merkel’s coalition fell in line behind her on a second bailout for Greece, clearing a potential hurdle to preventing the euro region’s first sovereign default.
Finance Minister Wolfgang Schaeuble, who with Merkel briefed lawmakers from their Christian Democratic bloc and Free Democratic coalition partner at late evening meetings in Berlin, snuffed out any rebellion over aid after calling for private investors to share a “substantial” amount of the burden. Greece will be debated in the lower house of parliament today.
“It’s about the future of the currency union, possibly about Europe, and also about Germany’s economy,” Hans Michelbach, the ranking CDU member of parliament’s Finance Committee, told reporters after the closed-doors meeting. “You always have to consider the end, and that may mean contagion dangers for other countries and domino effects on our banks.”
Merkel again faces a balancing act over the debt crisis that has returned to Greece more than a year after it received a 110 billion-euro ($161 billion) bailout. While risking a clash with the European Central Bank on investor involvement, Merkel must also take into account voter anger over additional aid and opposition from her coalition partner even as investors and fellow leaders urge Germany to step up its response.
President Barack Obama, while hosting Merkel at the White House this week, made it clear he’s looking to policy makers in Europe’s largest economy to prevent an “uncontrolled spiral of default” in countries such as Greece to avoid “disastrous” harm to the U.S. economy.
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