German parliament to vote on Spanish bank loans | News | DW | 19.07.2012
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German parliament to vote on Spanish bank loans

A majority is expected this Thursday as the German Bundestag votes on emergency loans for Spanish banks. It's a rushed process as usual: eurozone finance ministers want to finalize the deal on Friday.

The rescue package of up to 100 billion euros ($123 billion) is expected to pass through German parliament relatively comfortably. Some politicians of every stripe, however, are set to oppose the move, with the small Left Party likely to unanimously reject it.

The budget spokesman for Chancellor Angela Merkel's Christian Democrat Union, Norbert Barthle, told parliament on Wednesday evening that he hoped for a "broad and clear majority."

The opposition Social Democrats' budgetary spokesman, Casten Schneider, was less enthusiastic in an interview with the mass-publication daily newspaper Bild.

"I will decide at short notice whether to vote in favor or not; there are open questions still," Schneider told Bild, saying he was "certainly against the fact that, with the Spanish aid, it is again only the banks who are being rescued." He used a relatively derogatory German term for a gambler to categorize the moneylenders.

Specialized loans to stave off broader aid

The 100 billion euros in loans are to be used exclusively to refinance struggling Spanish banks. The goal of these specialized loans is to avoid a full-scale rescue of the eurozone's fourth-largest economy.

EU leaders hope to release the first tranche of 30 billion euros before the end of the month. The theoretical upper limit of the fund is thought to be far higher than necessary, in what might be a move to placate jittery investors.

Rainer Brüderle, the party chairman of the pro-business Free Democrats (FDP), told the Passauer Neue Presse newspaper that the government has "so far secured the necessary majority at every vote," with each so-called "bailout" requiring parliamentary approval in Germany. The Free Democrats are Merkel's junior coalition partners.

"Spain has already started a serious reform program and now it needs Europe's support," Brüderle told the paper, though he said that further reforms would be the "trade-off" Germany would demand in return.

Meanwhile, in Spain, top trade unions have organized a major evening of protest against the cuts in state spending and labor reforms implemented by the government in Madrid. The UGT and CCOO unions said they had planned more than 80 events across the country, claiming they will be the biggest of their kind to date.

Spain is battling an unemployment rate of around 25 percent and a youth unemployment rate of about 50 percent.

msh/tj (AFP, dpa, Reuters)