FRANKFURT (MNI) – There is no doubt that the rescue plan agreed on
May 10 by European heads of state and government for the Eurozone will
pass the German upper house on Friday, a leading member of that body
said Wednesday.
Wolfgang Reinhart, the minister for the upper house, or Bundesrat,
from the state of Baden-Wuerttemberg, told Financial Times Deutschland,
“I have no doubt” that the Bundesrat will pass the law on Friday.
But “for that [to happen] a set of conditions must be filled,” he
cautioned. Reinhart coordinates the positions of the states led by
leaders from the CDU/CSU party of Chancellor Angela Merkel.
“Above all the EU must tackle the origins of the crisis, like
budget deficits,” he said.
Those who violate deficit rules “must be punished” in a manner that
is noticeable and perceptible, he urged, “for example by being locked
out of EU funds or losing their right to vote.”
Furthermore, a bankruptcy procedure for countries is needed that
would require creditors to give up a share of their claims, he argued.
Both Germany’s upper and lower houses of parliament are expected to
vote on the bill this Friday.
Germany’s share in the E440 billion in loan guarantees from EU
states over three years is to be up to E123 billion plus up to 20% on
top in the case some countries opt out. This means, Germany’s full share
of the aid package could rise to around E148 billion in the worst case
scenario.
Even though a loss in the election in North-Rhine Westphalia
earlier this month means that Chancellor Angela Merkel’s center-right
coalition will soon no longer command a majority in the upper house,
delays in forming the government there mean that for now the Bundesrat
majority is still intact.
In any case, the upper house can only stall the bill; it cannot
reject it.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
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