Controversial Leveraging Plan: German Parliament Expected To Hold Full Vote on EFSF
The whole German parliament is expected to vote on planned guidelines for the enlarged euro-zone rescue fund on Wednesday, SPIEGEL ONLINE has learned. Initially, only the budget committee had been due to vote, but coalition lawmakers have changed their minds due to huge public interest in the measure.
The German parliament is expected to hold a full vote on Wednesday on proposals to leverage the euro-zone rescue fund, contrary to earlier plans to confine the vote to its budget committee, SPIEGEL ONLINE has learned from sources in Chancellor Angela Merkel's conservative Christian Democratic Union (CDU).
During a meeting on Monday afternoon between Merkel, leaders of German political parties and their parliamentary groups -- in which the chancellor is expected to report on the results of Sunday's summit -- Kauder is expected to call for a new vote. Under Kauder's proposal, a vote would take place shortly after Merkel's planned address to parliament at noon on Wednesday, a speech which will cover the primary measures agreed on to strengthen the euro rescue fund.
At issue is the need to boost the impact of the 440 billion rescue fund, or European Financial Stability Facility (EFSF). There is concern that the current size of the (recently expanded) fund isn't sufficient should additional countries, particularly Spain and Italy, be infected with debt contagion. The fund is also designed to indirectly prop up European banks, which could also become expensive if European leaders this week agree to an even greater haircut on Greek debt. Up to 60 percent is currently under consideration.
Increasing the scope of the fund is particularly controversial in Germany where there are mounting fears that the measure could entail even greater risks for German taxpayers.
Kauder was quoted as saying the leveraging had "attained fundamental significance in recent days due to the public debate about it." The parliament planned to take account of public concerns by making an exception and holding a full vote, he said.
German opposition parties had already demanded a full vote on Friday, but Merkel's center-right coalition of conservatives and pro-business Free Democrats had initially rejected the idea.
The need for German parliamentary involvement in the euro rescue efforts -- a requirement set last month by the Federal Constitutional Court -- has led to a delay in EU talks on a new rescue deal.
It is unclear when the proposed guidelines for the EFSF will become available for lawmakers to review -- it is possible that a new version will arrive from Brussels on Monday evening.
Leverage proposals include the EFSF providing partial guarantees of bonds issued by euro-zone states, or creating a special purpose vehicle to attract funds from major emerging countries.
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