The World from Berlin: Second Bailout for Greece 'Will Not Be the Last'
The German parliament may have passed the second rescue package for Greece, but Chancellor Merkel had to contend with dissenting backbenchers and a loose-lipped cabinet minister who wants Greece out of the euro zone. German commentators, too, warn that Athens will be dependent on European help for years to come.
Many members of the German parliament, the Bundestag, must have felt a sense of déjà vu on Monday. It was, after all, hardly the first time in the last two years that they were voting on a multi-billion rescue package for Greece.
Then, as now, the vote went through by a large majority. On Monday, a total of 496 lawmakers voted in favor of the package, with 90 against and five abstentions. But as doubts grow that Greece can really turn the corner, many Bundestag members felt little enthusiasm for the new 130 billion ($175 billion) bailout. Chancellor Angela Merkel's continues to remind lawmakers that the alternative to providing more aid for Greece -- a disorderly default -- would likely have far worse consequences for the euro zone and Germany.
Nevertheless, some rebel backbenchers made their opposition to providing more taxpayers' money for Athens clear. In what is being seen as a setback for Angela Merkel, substantial numbers of coalition parliamentarians refused to vote for the package, to the extent that she was forced to rely on support from opposition lawmakers. A total of 304 members of the center-right Christian Democratic Union (CDU), its Bavarian sister party the Christian Social Union (CSU) and the business-friendly Free Democratic Party (FDP) voted in favor of the bailout -- but she needed 311 to achieve the so-called "Chancellor's majority." Within the CDU/CSU bloc, 13 politicians rejected the bailout, with four members of the FDP joining them in opposition.
Ultimately, Merkel had to rely on support from the opposition center-left Social Democratic Party (SPD) and Greens. That support had been signaled in advance, making the vote itself relatively free of suspense.
Signs of Dissent
Merkel made her arguments in favor of the bailout in a statement to parliament ahead of the vote. She conceded that there was no "100 percent guarantee" that the rescue would succeed, but said the potential benefits outweighed the risks.
"Europe will fail if the euro fails. Europe wins if the euro wins," she said in her speech, repeating her mantra that the euro zone must be kept intact at all costs.
There are signs, however, that her coalition is divided on whether Greece can be rescued. Earlier on Monday, Merkel had rebuked Interior Minister Hans-Peter Friedrich for saying Greece should be encouraged to leave the euro zone. Friedrich later backtracked from the comments, which he had made to SPIEGEL, saying he supported the official German government line that the Greek economy should be reformed within the euro zone.
On Tuesday, German commentators take a look at the significance of the vote.
The center-right Frankfurter Allgemeine Zeitung writes:
"The chancellor ( ) insists that her approach, which involves not only Greece but the whole of the EU putting their finances in order, involves lower risks compared with the school of thought that believes a painful break with the euro zone would be better than prolonging the agony. There is still a large majority in the Bundestag which believes the chancellor's story about her way being the lesser of the two evils -- contrary to the opinion of some economists and ignoring the widespread and growing skepticism within the general population. Members of parliament, of all people, are not immune to the influence of such things. It's not just Friedrich's outburst that shows how deep the doubts about Merkel's rescue policies have gnawed into the ranks of the coalition."
"The struggle to save the euro is increasingly looking like a war on two fronts whose duration is unknown, but where the threats are coming from both sides. How long will countries such as Greece keep going with the reforms that are being demanded by their European partners, reforms that in many respects are illusory and which in some cases have not even begun? And how long will taxpayers in donor countries continue to want, and be able, to fund such large-scale economic experiments?"
The conservative Die Welt writes:
"It can only be described as political schizophrenia. As a member of the CSU, Hans-Peter Friedrich calls for Greece's withdrawal from the euro zone. But in his role as German interior minister, Friedrich votes in parliament and in the cabinet in favor of the second bailout package for Greece. A lot of politicians in the coalition government have similarly split personalities these days. With statesmanlike faces, they rubber-stamp ever-greater liabilities, the burden of which is borne by German taxpayers. At the same time, many lawmakers already suspect that they are on the wrong track."
"Finance Minister Wolfgang Schäuble is already talking about a third rescue package for Greece. And the data that is coming out of the practically bankrupt country is so shocking that the prospect of Greece ever getting its finances in order seems to retreat further and further into the distance."
"As long as the Greeks remain in the euro zone, they will never become competitive. ( ) All the assistance that is based on the illusion that Greece can make it while remaining part of the euro area is doomed to fizzle out without having any effect. The longer it takes for political leaders in Berlin, Brussels and Athens to accept this reality, the more expensive it will be for the citizens of their countries. Greece will be better off if it abandons the euro -- and the euro zone will be better off without Greece."
The Financial Times Deutschland writes:
"For the opposition, yesterday's vote was, of course, a PR coup. The coalition is on its last legs and is running out of steam, rejoiced representatives of the SPD and Greens. It is indeed curious that the chancellor was not able to get her own deputies to rally behind her. But it is not truly significant. The government is able to tolerate a few rebel backbenchers, provided the vote goes through, especially if the opposition is supporting the motion. And in the case of the aid for Greece, that was foreseeable right from the outset."
"The government currently has a safe majority in parliament for aid packages. After all, what choice do the Bundestag members have? If they do not rubberstamp a bailout now, they will soon have to vote on another one. If Greece doesn't get support now, the country -- even if it is no longer in the euro zone -- will still be just as dependent on the support of its European partners, because it would be even further away from a return to the capital markets. Whether it remains part of the monetary union or not, the country will long be a basket case. Neither a default nor a return to the drachma would change any of that. The country's economic base has been eroded, partly because of the excessive and lopsided austerity strategy prescribed by European leaders. The rescue package that was passed yesterday will not be the last."
The center-left Süddeutsche Zeitung writes:
"Members of the German Bundestag are (in the words of the German constitution) responsible only to their conscience, and nobody can read their minds either. Hence nobody knows exactly what the people's representatives were thinking as they voted on Monday on the second aid package for Greece within 22 months. But it's safe to assume that the number of those parliamentarians who voted 'yes' with a light heart and a firm conviction that Athens should receive further loans worth 130 billion is probably vanishingly small."
"Indeed, members of the German cabinet, including even the chancellor herself, have their doubts that things in Greece will soon change for the better. In that respect, the country's deep recession, which was unavoidable due to the necessary austerity measures, plays less of a role than the fact that Athens' willingness to make reforms is too small and the Greek political establishment is too recalcitrant. Even two years after the outbreak of the crisis, the country still lacks the most basic things that are needed to sort out the state finances and deregulate the economy, such as a functioning tax authority and competitive products. Increasing number of economists and politicians want the Greeks to quit the euro zone sooner rather than later. The only problem is: What would happen then?"
The left-leaning Berliner Zeitung writes:
"Merkel's center-right coalition wasn't even able to scrape together a chancellor's majority in the Bundestag. ( ) The chancellor's loss of authority within her own ranks is accelerating rapidly. At some point, the population will realize that Angela Merkel, who is still highly regarded, is leading a government that no long deserves voters' trust, because they no longer trust themselves."
"Merkel's brilliant interior minister, Hans-Peter Friedrich, thought it would be a good idea to challenge the government's current policy on the day before the crucial vote on Greece. After such an affront, the chancellor really should have fired him. But she cannot, because then the whole coalition would have come crashing down around her ears. That, together with Monday's highly symbolic vote, shows just how arbitrary and random the coalition's policies have become, and how little they are based on inner conviction."
The left-leaning Die Tageszeitung writes:
"The motion which the Bundestag rubber-stamped on Monday afternoon was barely five pages long. The appendix, however, was well over 700 pages. It's a safe bet that the discussion in the parties' parliamentary groups ahead of the debate was not as exhaustive as it should have been. The texts are more a symbol of who still understands what is going on in the efforts to contain the euro crisis. (The parliamentarians get the text) with the new totals for the bailout, but the details are all in the appendix."
"If there are any dissenting opinions within the opposition SPD and Greens, then it's not visible in the parties' voting behavior. ( ) They simply support the government's policy and believe they are being assertive by doing so. But that means that any criticism of the bailout (from within the opposition's ranks) can't be taken seriously."
"Incidentally, one would think that the Europe that is being created through such policies would put the fear of God into parts of the SPD and Greens (because of its neo-liberal nature). Merkel has announced that, in the future, every country will have to produce products that can compete on the global marketplace. The state, which has so far kept the excesses of the market in check, will be shrunk. National parliaments will have to give up their most important right -- approving the budget -- so that countries can be forced to adopt the German economic model. ( ) The example of Germany shows that such a Europe will be less, not more, equal."
The business daily Handelsblatt focuses on the ongoing debate about increasing the size of the euro zone's backstop fund:
"Merkel can no longer stop the debate about boosting the permanent bailout fund, the European Stability Mechanism (ESM). The majority of German economists have long believed that Greece will not be able to make it and that the current 500-billion firewall is not sufficient to save crisis-stricken southern European countries such as Portugal, Spain and Italy (should contagion spread)."
"It is only with great reluctance that the German government is abandoning its illusions and facing up to reality. At the G-20 summit in Mexico, German Finance Minister Wolfgang Schäuble's 'no' to increasing the size of the bailout fund sounded more like a 'not yet.' Then there is the growing pressure from the IMF, the US and the EU, which all want a greater commitment from Germany."
"Chancellor Merkel may have the image of Europe's 'Iron Lady,' but she has failed to take real action in reaction to the bad news from Athens. Two years ago, the first 110 billion aid package failed to have much effect. But when talking about the rationale behind an additional bailout package on Monday, the chancellor resorted merely to extensive pathos, talking about the sake of the future of Europe. It would have done the credibility of the euro-rescuers a lot of good if they had openly informed the parliament and the general public about their musings regarding increasing the bailout fund."
-- David Gordon Smith
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