Sunday, January 29, 2012

Merkel faces backlash over EU pact

Financial Times
January 29, 2012

Angela Merkel, the German chancellor, is facing growing political pressure at home to demand stricter fiscal discipline from her eurozone partners at an extraordinary European Union summit in Brussels on Monday.

She also faces a potential revolt by conservative members of the German parliament over any call for more taxpayers’ money to bail out the ailing Greek economy.

The threat of a political backlash is one factor behind Germany’s demand, revealed in the Financial Times on Saturday, for tougher conditions to be imposed on any new rescue package for Greece, including the appointment of an outside enforcer with the power to veto national spending decisions.

The proposal, angrily rejected in Athens at the weekend, is seen in Berlin as an essential means of keeping the Greek rescue programme on track, after repeated failure to observe the tax and spending targets fixed by the International Monetary Fund, the European Commission and the European Central Bank.

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