Merkel’s coalition approves Greek bailout as rebellion fizzles out

The much-hyped rebellion against German chancellor Angela Merkel fizzled out shortly after noon at the Bundestag yesterday.

Minutes earlier, MPs had concluded a lively two-hour debate to vote on whether to allow German participation in a third bailout package for Greece, worth €86 billion.

A month ago, 60 of Dr Merkel's 255 MPs refused to mandate Berlin to open talks with Greece. But expectations that this protest would swell yesterday came to nothing when just three more MPs from Dr Merkel's Christian Democratic Union (CDU) joined the dissenters. The rebellion was over and Dr Merkel emerged victorious.

The final result showed 454 votes to 113 in favour, with 18 abstentions and 46 absentees.

Dr Merkel didn’t address the Bundestag ahead of the vote, but at a CDU parliamentary party meeting on Tuesday evening she heard a volley of complaints that the third programme merely increased the financial exposure of German taxpayers.

She left it to German finance minister Wolfgang Schäuble to address parliament. Mr Schäuble said he “struggled no less than others” with the idea of further loans for Greece during recent months dealing with the Syriza-lead government.

Full conviction

But the minister said he had changed his mind in light of the growing readiness of Athens to embrace reform and the fact the Greek parliament had already passed reforms in advance, so called “prior actions”. Thus he asked MPs to back the proposal “with full conviction”.

“Given experiences of the past months and years there’s no guarantees that this will all work,” he said, “but it would be irresponsible not to use this chance for a new start in Greece.”

Last month, Dr Schäuble’s doubts added to the growing frustration among CDU backbenchers, under pressure in their constituencies to justify further Greek loans. But the finance minister’s row-back yesterday appeared to douse the flames of uprising.

With the IMF yet to decide on whether it will participate in a third package, another cause of unease for German government MPs, Dr Schäuble said he was “very confident” the Washington-based fund would come back on board in the autumn after the EU and IMF reached a “joint ruling on debt sustainability”. But he said it was the widespread view of euro members that debt write-downs were at odds with the European treaties.

Gregor Gysi, floor leader of the opposition Linke, pounced on the standoff with the IMF as proof the third Greek programme was another step in the wrong direction.

Berlin faced a “conflict of interest” in the coming months, he said: without real debt relief for Greece the IMF would not come back on board. But that would not happen as long as debt write-downs remained a political taboo for the ruling CDU, he said.

Worse the latest programme would weaken the Greek economy further and push it closer to bankruptcy rather than recovery, he said, meaning Berlin’s contribution of loans to Athens might not be repaid.

“If it ever comes to that it will be because of the failed politics of this government,” he said.

Mr Gysi said in the latest wave of privatisations demanded by the third programme, Greece had agreed to sell off 14 regional airports to Fraport, which manages Frankfurt airport, for €1.2 billion.

“So we see the privatisation of Greek public property to the benefit of the German public, and at a fantastic knock-down price,” he said. “Unbelievable but true.”

The opposition Green Party also pressed the government on its refusal to consider debt write-down for Greece. Athens had made huge mistakes, but Germany unleashed a war and the murder of European Jews.

“And yet a few years later Germany’s creditors, on whom Germany had brought such suffering, agreed massive debt relief – including Greece,” said Sven-Christian Kindler of the Green Party.

Historical responsibility

“On the basis of historical responsibility, we should be in favour of debt relief for Greece.”

The mass-circulation Bild daily stepped up its opposition, saying that backing further Greek loans in a bid to hold the euro together was "terribly wrong" and would further weaken the dwindling trust in Europe.

Meanwhile the Dutch parliament in the Netherlands also approved the Greek bailout package.