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01/10/2016

Schäuble saved the Greek bailout extension, according to reports

Euro & Finance

Schäuble saved the Greek bailout extension, according to reports

Wolfgang Schäuble [European Council]

German Chancellor Angela Merkel narrowly averted a far bigger rebellion last month on Greece’s bailout extension among her conservatives, many more of whom would have voted ‘Nein’ but for her finance minister’s powers of persuasion, lawmakers said.

Germany’s parliament voted on 27 February to extend Greece’s bailout by four months, but a record number of conservative dissenters were not convinced that Athens would deliver the economic reforms it has promised.

>> Read: German parliament approves Greek bailout extension

One senior conservative told Reuters that Merkel’s Bavarian allies, the Christian Social Union (CSU), “would have unanimously voted ‘No'” had Wolfgang Schäuble not solicited support during a personal appearance two days before the vote.

Another leading conservative said Schäuble’s meeting with Merkel’s Christian Democrats (CDU) was equally important in securing their support at a time when confidence in the Greek government was “kaputt” in the lower house of parliament.

“The vote was hanging by a thread,” the lawmaker said, on condition of anonymity.

Schäuble is a leading advocate of the austerity measures that Greece’s new left-wing government wants to scrap.

The lawmakers’ comments point to a growing groundswell of discontent within conservative ranks and suggests there is a risk that they would not be prepared to approve a third bailout for Greece if Athens asks for more help in future from its partners.

“The Greeks say ‘We don’t need a third bailout’ – but they also said they wouldn’t need this bailout extension,” said the conservative lawmaker.

In the last vote, 29 of the 32 parliamentarians who voted against an extension for Greece came from Merkel’s CDU and the CSU. In addition, 118 conservatives who voted “Yes” gave personal statements signalling they would not keep toeing the party’s current line unless there was a significant change.

German outrage

Germans have been outraged by Athens’ anti-German rhetoric, including comments from Prime Minister Alexis Tsipras vowing to seek war reparations from Berlin on the grounds that German troops occupied Greece during World War Two.

For all their dissatisfaction with Greece, however, German conservative lawmakers do tend to fall in line in the end, and the popularity of Merkel in her party, as well as that of CSU leader Horst Seehofer, would be likely to help, analysts say.

In addition, Merkel’s coalition partners, the center-left Social Democrats, and the opposition Greens, voted unanimously in favour of the extension in February, suggesting they can be counted on in future for measures which offer solidarity with Greece. 

Background

Germany's parliament approved an extension of Greece's bailout on 27 February after Federal Minister of Finance Wolfgang Schäuble, who has voiced doubts about whether Athens can be trusted, promised it would not be allowed to "blackmail" its euro zone partners.

With 542 lawmakers voting in favour, including almost all of Chancellor Angela Merkel's right-left coalition plus the opposition Greens, it was the biggest majority for any euro zone rescue package so far in the 631-seat chamber.

The Bundestag vote was the only major parliamentary hurdle for a four-month extension to the bailout programme for the most heavily-indebted country in the single currency zone.