BERLIN (MNI) – German Chancellor’s Angela Merkel’s center-right
CDU/CSU parliamentary group in a test vote on Tuesday gave solid backing
to bills on the European permanent bailout fund ESM and the EU fiscal
compact, said a source who attended the meeting.

According to the official, only eleven parliamentarians voted
against the ESM bill and one abstained. And just three parliamentarians
voted against the fiscal compact bill, with one abstaining.

The government informed the parliamentarians today that there are
deliberations underway on the European level to remove the principle of
seniority from the ESM, the source said.

Southern peripheral states were pushing for this because it would
make it easier for them to tap financial markets for funding, the
official explained.

Neither Merkel nor Finance Minister Wolfgang Schaeuble had said at
today’s meeting whether they supported this demand, the source said. In
any case, the German parliament would need to approve such a change of
the ESM rules, he noted.

A government spokesman said Monday, the government expects “broad
majorities” in both houses of parliament for the ratification of the ESM
and the fiscal compact.

On Sunday the government won the backing of the upper house of
parliament, the Bundesrat representing the 16 states, for the fiscal
compact and ESM bill.

On Thursday, Merkel’s center-right coalition government and the
main opposition parties in the Bundestag reached a deal for the
ratification of the fiscal compact in the lower house of parliament this
Friday along with the ratification of the ESM. The Bundesrat will also
vote Friday on the two bills.

Yet it will likely still take several weeks before the bills become
law. President Joachim Gauck said on Thursday that he planned to delay
signing the ESM and the fiscal compact bills. The Constitutional Court
had asked him to wait until it had decided on requests for preliminary
injunctions that have been filed against the two bills, Gauck said.

Merkel also told parliamentarians today that she is not happy about
the EU reform proposals of EU Council President Herman Van Rompuy, the
source said. In her view, the proposals put too much emphasis on joint
liabilities in the Eurozone and too little on shifting national
controling rights to the European level, he said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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