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Tags: merkel | germany | bank | spain

Merkel Sees German Parliament Backing Spanish Bank Aid

Sunday, 15 July 2012 03:19 PM EDT

Chancellor Angela Merkel said on Sunday she was confident that a majority of German lawmakers would back aid for Spain's ailing banking sector at a special sitting of the lower house Bundestag set for Thursday.

Eurozone finance ministers agreed last Monday on a rescue package of up to 100 billion euros ($122.61 billion) for Spanish banks, which have been crippled by a burst housing bubble.

Merkel's government needs a green light from the Bundestag before Finance Minister Wolfgang Schaeuble can commit at a meeting of eurozone finance ministers on Friday to pay out Germany's share of the bailout.

"We always get the majority we need," Merkel said in a pre-recorded interview for ZDF television channel due to be aired on Sunday evening.

A small minority of lawmakers from Merkel's centre-right coalition voted recently against the eurozone's new bailout fund and new budget rules, highlighting the growing unease in Germany about the costs of supporting weaker members of the single currency bloc.

Merkel's government easily won a two-thirds majority for the two measures, however, with the help of opposition parties.

Merkel also said the eurozone had not yet resolved the issue of whether its bailout funds - the European Financial Stability Facility and its eventual successor, the European Stability Mechanism (ESM) - or recipient states would be liable for future aid payments to banks.

"We have not adopted any final positions on this yet," she said.

The conservative leader reaffirmed her stance that the price of continued support for eurozone countries in difficulty must be strict adherence by the governments concerned to tough fiscal targets and close European monitoring of their progress.

"All attempts ... to say 'oh let us practice solidarity and nonetheless have no supervision and no conditions' will stand no chance with me or with Germany," Merkel said.

On Greece, Merkel said she wanted to wait for a report from the 'troika' of lenders on Athens' reform progress before deciding on further steps.

The troika of officials from the European Commission, the European Central Bank and the International Monetary Fund has begun a review of Greece's faltering progress after weeks of political paralysis during the election campaign.

Greece, just weeks away from running out of cash, wants to renegotiate the terms of its 130 billion rescue plan with the European Union and IMF, but the lenders - led by Germany - have said they can adjust but not rewrite the document.

"I have firmly resolved that I will only say what we will do on the basis of this (troika) report and we must therefore wait for another couple of weeks," Merkel said.

© 2023 Thomson/Reuters. All rights reserved.

Sunday, 15 July 2012 03:19 PM
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