October 29, 2011
The message was unequivocal. On October 26th the Bundestag, the main chamber of Germany’s legislature, voted overwhelmingly to give more firepower to the European Financial Stability Facility (EFSF), which bails out weak euro-zone countries. Two of the three opposition parties joined the government’s motion, which passed with 503 votes in favour and 89 against. The governing coalition—consisting of the Christian Democratic Union (CDU), its Bavarian wing, the Christian Social Union (CSU), and the Free Democratic Party (FDP)—contained a rebellion within its ranks. Their votes alone would have provided a majority. “Germany, regardless of political party, will protect the work of European unity,” vowed the chancellor, Angela Merkel, just before the vote. When she met her fellow European leaders in Brussels later that day she had the politicians, if not all the voters, behind her.
But their “yes” encased a collection of “nos”: no to any increase in German guarantees for the EFSF beyond the €211 billion ($292 billion) approved in September; no to Eurobonds, which could be issued by any euro member but would be underwritten by all; and no to further financing of stricken countries by the European Central Bank. Collectively these rejections veto a package bold enough to end the crisis. Why are the Germans so stubborn?
The usual answer is that German taxpayers are tight-fisted and that Mrs Merkel is afraid of them. There is truth in that. Three-quarters of Germans opposed the last expansion of the EFSF, which they see as a transfer of money from virtuous countries to feckless ones. Now it is being leveraged to cope with Italy, which has balked at raising its retirement age to 67, a measure Germany reluctantly agreed to in 2007.
More
No comments:
Post a Comment