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News Analysis: Merkel relieved with parliament approvals, but only temporarily

06-30-2012 14:49 BJT

by Han Mo

BERLIN, June 29 (Xinhua) -- German Chancellor Angela Merkel finally can enjoy a sweet sleep, at least on Friday night, after the parliament approved two key rescue instruments for the crisis-gripped eurozone -- the permanent bailout fund and the new fiscal pact.

The "iron lady", portrayed by media for her unyieldingness, experienced a tough week, having a series of meetings with her European counterparts plus an over 15 hours of overnight bargaining in Brussels, where a closely watched EU summit took place.

Shortly after the summit on Friday afternoon, the chancellor rushed back directly to the Bundestag, or Germany's lower house of parliament, to face a new round of questioning and fighting.

The unrest among German lawmakers stemmed from the reported "huge concession" by Merkel in Brussels, as she agreed to open a gate for direct cash injection for weak banks through the upcoming permanent bailout fund, or the European Stability Mechanism (ESM).

Germany had said many times that the rescue fund could only be requested by governments, and not for direct aid to banks.

The new changes in Merkel's stance made the votes in Bundestag more sensitive and complicated, as some lawmakers, especially those from the Left party called for postponing the planned vote on the ESM.

The Bundestag's budget committee chairman, Social Democrat (SPD) Carsten Schneider, urged Merkel to explain "her 180-degree turn," vowing that his party, the main opposition in parliament, would never vote for an unknown package.

Queries even came from Merkel's own camp. Wolfgang Bosbach, a member of Merkel's ruling Christian Democrats (CDU), said the altered rescue fund would mean "the monetary union is turning into a liability union."

The chancellor firmly defended her decision and strove to calm agitated lawmakers, saying she never betrayed the "philosophy of no benefit without compensation," and any direct recapitalization would come with strict and explicit conditions, one of which is the establishment of the EU bank supervisory body.

She promised that "any change in the activity of the ESM would then once again be approved by the Bundestag."

 


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