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Merkel coalition combats dissent on euro zone aid
Published in Saudi Press Agency on 13 - 05 - 2011

German Chancellor Angela Merkel's coalition tried on Friday to control dissent on future euro zone bailouts and extra aid for Greece among government MPs voicing impatience with calls for German assistance, according to Reuters.
With some media saying "more and more members of parliament in the ruling coalition oppose billions more euros in aid" -- as Handelsblatt daily wrote on its front page -- leaders of her centre-right coalition played down the scale of the revolt.
Merkel's spokesman Steffen Seibert described contacts with members of parliament on the euro zone as "intense", telling reporters in Berlin: "Despite what you read in the papers there is a lot of support for government policy in the coalition."
Disquiet is focused on the new, permanent European Stability Mechanism coming into effect in 2013 and on Greece's requirement for additional aid after last year's 110 billion euro package.
The ESM's effective lending capacity of 500 billion euros will be tapped when the stability of the euro zone is at stake.
But bailouts for Greece, Ireland and now Portugal, plus the worry that Greece will have to restructure or get more aid, have hardened public opinion against handouts in Germany, the biggest European economy whose funding and support is decisive.
"Resistance is building against setting up the ESM ... and against additional loans for Greece which euro zone finance ministers will discuss on Monday," wrote Handelsblatt.
Some media estimated as many as 19 MPs from Merkel's conservatives and their Free Democrat (FDP) junior coalition partners may vote against the government on euro zone aid, which would reduce her Bundestag majority to just one vote.
FDP dissenter Frank Schaeffler says 14 colleagues would vote against the ESM. But coalition leaders said he was exaggerating, eurosceptics were isolated and the government would get majority support, as Merkel predicted on Tuesday.
She can also count on votes from euro enthusiasts among the opposition Social Democrats and Greens, though they complain the government is not sharing details of the plan.
NO PLAIN SAILING
"In a vote, usually around five to eight coalition members put their foot down," said a coalition source, adding that even though individuals might dislike aspects of policy, when it came to the crunch "few are willing to vote as they feel".
In a parliamentary test of support on Thursday on Portugal's bailout package, which has broader support than giving Greece a second aid package, six conservative MPs and three from the FDP voted against the government motion, which was easily carried.
The FDP's annual congress in Rostock was due on Saturday to vote on two euro zone motions, one for and one against the ESM. Deputy Foreign Minister Werner Hoyer from the FDP told Reuters in Rostock he was confident the party would back the mechanism at the congress and also when it came to a parliamentary vote.
"We will get a clear vote in favour of the ESM at the party congress," he said. "It won't be plain sailing, we will have to argue very carefully to convince those that are sceptical."
The FDP's new young leadership is keen to allay suspicions it is turning eurosceptic while also insisting on strict terms for bailouts to convince its electorate, many of whom are drawn from business and professional circles.
The pro-Europe motion to be voted on Saturday, which was seen by Reuters a week ago, calls for "strict parliamentary endorsement of every activation of the ESM" and backs Merkel's insistence on private investors sharing the burden of sovereign default risks in the euro zone in future.
Handelsblatt carried a poll of German business leaders that showed 76 percent agreed on the need for the ESM and 68 percent believed private investors should be involved in rescue schemes in the euro zone without exception.


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