Woe Is the Euro Merkel Faces Myriad Pitfalls in Bailout Vote

In the next few weeks, Angela Merkel will face her toughest challenges yet as Germany's chancellor. She will have to push the latest euro rescue plan through parliament, but she faces resistance from within her own government where parties lack a common position. SPIEGEL ONLINE has outlined the most significant sticking points.

The upcoming votes on the new euro rescue packages in Germany's parliament present a major challenge to Chancellor Angela Merkel's authority.

The upcoming votes on the new euro rescue packages in Germany's parliament present a major challenge to Chancellor Angela Merkel's authority.


For German Chancellor Angela Merkel, the next few weeks could prove to be the most challenging of her term in office. Her task: to push ahead with the deeper integration of the European Union in order to save its ailing common currency. Not known for her use of impassioned words, she made a strongly worded speech on Wednesday when she told the federal parliament, the Bundestag, she wanted to address the euro crisis in a "controlled process."

In the coming weeks, however, her coalition government of the conservative Christian Democratic Union (CDU), its Bavarian sister party the Christian Social Union (CSU) and the business-friendly Free Democratic Party (FDP) will be put to the test. The Bundestag is slated to vote on the latest euro rescue measures at the end of September.

Meanwhile, the situation in Greece remains tense following the decision by the troika, a special commission comprised of officials from the European Union, the International Monetary Fund (IMF) and the European Central Bank (ECB), to depart Athens last week without any results. It appears that the government in Athens wants to loosen its deficit targets for this year and next. Officials in Berlin are alarmed. German Finance Minister Wolfgang Schäuble has warned Athens that the troika's work must be successful -- otherwise the next tranche of aid to Greece will not be transferred.

The developments are nothing less than a stress test for Merkel's coalition government. And a test vote on the bailout packages conducted by the CDU, the CSU and the FDP earlier this week didn't bode well for Merkel. Although it is widely believed there are enough votes to pass the legislation -- the opposition center-left Social Democrats and Greens have said they will support it -- it is anything but a given that Merkel will be able to forge a majority relying exclusively on her coalition partners. The latest news coming out of Greece and Italy, where enthusiasm for budget consolidation appears to be waning, isn't helping matters.

How will Merkel's coalition solve the crisis? What are the Bundestag members' biggest concerns, and how will the European Union move forward? SPIEGEL ONLINE has compiled an overview of the most pressing issues.

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Eleos 09/09/2011
1. An offer that can be refused
Picture the scene in the Sopranos: a group of New Jersey businessmen meet to decide how best collectively to meet the demands of the Mafia. There are disagreements among them based on their individual situations, but none has the courage to take on the enemy. Sure, a lot of mistakes were made by politicians and bankers over the implementation and management of the euro. In Germany's case she is ever on the defensive against overt, or more likely covert, reminders of her past, and so goes supinely along with whatever is demanded by the others. Now is the time to assert herself and own up to the obvious. The markets are trying to force decisions that will increase the income of large gamblers. It is the markets that need immediate reform. Heavy taxes should be imposed by the EU on all transactions without an underlying unambiguous purpose in the real economy. If Britain will not agree she should be asked to leave the Union, something that will please the majority of Britons. Banks and all other financial institutions domiciled in the EU should have the tax applied to any transactions of their subsidiaries wherever they occur in the world. After an initial panic, and arguments between lawyers, things will calm down. Then there will be an opportunity to carefully consider and enact the reforms needed in the EU.
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