BERLIN (MNI) – Germany’s largest opposition party, the center-left
SPD, opposes the plan to allow Europe’s permanent rescue fund, the
European Stability Mechanism, to directly recapitalize banks, a senior
lawmaker said in an interview published Wednesday.
The proposal allowing for direct capitalization of banks by the ESM
was considered one of the key achievements of the EU leaders’ summit in
Brussels late last week. The leaders said, however, that direct
capitalization would only be allowed once a new centralized European
bank supervisor, headed by the European Central Bank, has been
established.
“We strictly oppose enabling credit institutions to be financed
directly from the rescue funds,” Carsten Schneider, the SPD’s
parliamentary budget speaker, told German web media Spiegel Online.
If the planned aid for the Spanish financial sector were to flow
directly from the bailout fund to the banks, then “it’s hard for me to
imagine that the SPD could approve this,” Schneider said.
It is expected that the lower house of parliament, the Bundestag,
will get to vote on the planned aid for Spain, which could be as much as
E100 billion, at the end of this month. German Chancellor Angela
Merkel’s center-right CDU/CSU-FDP coalition government has a majority in
the Bundestag.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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