German Parliament Expected To Hold Full Vote on EFSF

Spiegel
October 24, 2011

The whole German parliament is expected to vote on planned guidelines for the enlarged euro-zone rescue fund on Wednesday, SPIEGEL ONLINE has learned. Initially, only the budget committee had been due to vote, but coalition lawmakers have changed their minds due to huge public interest in the measure.

The German parliament is expected to hold a full vote on Wednesday on proposals to leverage the euro-zone rescue fund, contrary to earlier plans to confine the vote to its budget committee, SPIEGEL ONLINE has learned from sources in Chancellor Angela Merkel's conservative Christian Democratic Union (CDU).

The sources said conservative parliamentary group leader Volker Kauder would propose holding a full vote on Wednesday afternoon, before Merkel flies to Brussels in the evening for a second summit with euro-zone and EU leaders aimed at reaching an agreement to contain the debt crisis and bring stability to the common currency.

During a meeting on Monday afternoon between Merkel, leaders of German political parties and their parliamentary groups -- in which the chancellor is expected to report on the results of Sunday's summit -- Kauder is expected to call for a new vote. Under Kauder's proposal, a vote would take place shortly after Merkel's planned address to parliament at noon on Wednesday, a speech which will cover the primary measures agreed on to strengthen the euro rescue fund.

At issue is the need to boost the impact of the €440 billion rescue fund, or European Financial Stability Facility (EFSF). There is concern that the current size of the (recently expanded) fund isn't sufficient should additional countries, particularly Spain and Italy, be infected with debt contagion. The fund is also designed to indirectly prop up European banks, which could also become expensive if European leaders this week agree to an even greater haircut on Greek debt. Up to 60 percent is currently under consideration.

Increasing the scope of the fund is particularly controversial in Germany where there are mounting fears that the measure could entail even greater risks for German taxpayers.

More