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Categorized | Economy

German MP quits in Greek bailout revolt


Posted on March 31, 2015

©Bloomberg

Angela Merkel received a sharp reminder of the need to maintain a firm line in bailout talks with Greece after a prominent opponent of the German chancellor’s eurozone rescue policies quit his seat in the Bundestag on Tuesday.

Peter Gauweiler, a leading eurosceptic and member of Ms Merkel’s conservative alliance, said he had felt pressured to vote in favour of bailout programmes that he opposed.

    Mr Gauweiler, 65, is a wealthy lawyer who has launched several legal challenges to the single currency, which he once described as “Esperanto money”.

    “It has been publicly demanded of me that I support in the Bundestag, the contrary of what I have advocated for years before the federal constitutional court, and to my voters,” he said in a statement.

    His departure underlines the unease over eurozone rescues within Ms Merkel’s conservative bloc in the German parliament, and comes at a difficult moment in Athens’ negotiations with its eurozone creditors over desperately needed financing.

    The so-called Brussels Group of negotiators broke up on Tuesday after five days of talks, with little progress and uncertain prospects for reconvening.

    Creditors have insisted that Greece implement economic reforms before they will unlock €7.2bn in remaining bailout funds. Measures presented by the Greek team in recent days have been deemed woefully short of detail.

    Speaking before the European Parliament, Daniéle Nouy, the new pan-EU bank supervisor, said Greek banks continued to be solvent, but noted that the Frankfurt-based agency was holding “frequent conference calls” to monitor the financial system, including “the outflows of deposits”. “We do what we have to do as supervisors to ensure their liquidity,” Ms Nouy said.

    Mr Gauweiler represents a deep vein of German public opinion that has become increasingly hostile to the Greek bailout. He was one of 29 members of Ms Merkel’s Christian Democrats and its sister party, the Christian Social Union, of which he was deputy chairman, who last month voted against extending the bailout by four months.

    Though the extension was passed by a wide majority of 541 out of 586, it marked the biggest rebellion to date over a bailout, and signalled the dangerous footing for the chancellor.

    In depth

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    Greece debt crisis

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    Ms Merkel is also under pressure from anti-euro Alternative für Deutschland party, which has won over disaffected CDU voters.

    “This resignation indicates that Merkel is very constrained, not simply from the AfD, but also within her own party,” said Mujtaba Rahman, analyst at the Eurasia Group risk consultancy. “It suggests Merkel will need to maintain a hard line, which means no money without material reform from Greece on pensions and labour.”

    A poll published this month by broadcaster ZDF showed 52 per cent of Germans now favour a Greek exit from the single currency, up from 41 per cent in February. Relations between the two countries have been further soured by a Greek demand for war reparations.

    That tension has fed into the financing talks, which have gained urgency as the Greek government runs short of cash. Some eurozone officials believe it will be unable to cover a €450m payment to the International Monetary Fund due next week.

    Eurozone negotiators continued to raise concerns on Tuesday that their Greek counterparts have failed to provide details on the fiscal assumptions made in a list of proposed economic reforms, which Athens had hoped would be quickly approved.

    One official involved in the talks said they were likely to resume only after Athens provides “expert explanations” of their proposals, and gives more information to representatives from bailout monitors on the ground in Greece.