20 August, AtoZForex.com, Lagos – German law makers have voted in support of a new bailout deal for Greece, with a strong majority in support of financial aid of as much as 86 billion euros ($95 billion) to Europe’s most indebted nation. On aggregate, a strong majority in the lower house backed the deal after a three hour long deliberation. In summary:
- 63 lawmakers opposed the aid package Wednesday, which is 3 higher than the last vote on Greece in July.
- 453 voted in favor
- 113 against and 18 abstentions
Euro rose 0.1 percent to $1.1033 at 3:01 p.m. in Berlin after the report.
Germany is already Greece’s largest creditor and the country’s approval was required by the European Stability Mechanism, the euro area’s financial backstop, for the activation of the the bailout and unlock an initial 26 billion euros in time for Greece to meet a 3.2 billion-euro payment to the European Central Bank today.
“It would be irresponsible not to seize the chance for a new start in Greece,” Finance Minister Wolfgang Schaeuble said in a floor speech before the vote, citing reform measures already adopted by the Greek parliament. At the same time, “there are no guarantees that all this will work, and doubts are always allowed,” he said.
Some lawmakers still strongly oppose this idea. Arguing that Greece is in a debt trap and that policy makers are bending euro-area rules to hold the currency union together. Bild, Germany’s most widely read newspaper, is also strong opposition to further relief to Greece. An publication in the paper expresses this idea, stating that that “it doesn’t offer a rescue — not for Greece, not for the euro and certainly not for Europe” after “five wasted years of rescue policies.”
“Greece won’t make it in the euro zone and we won’t succeed at keeping the euro zone together by force against the will of the people,” said Klaus-Peter Willsch, a lawmaker in Merkel’s Christian Democratic Union who has persistently opposed bailout funding. “If we don’t allow the euro zone to breathe, and that means to allow Greece to exit now with its own currency,” then the euro will fail.
Greece has managed to stay afloat after getting on the brink of a disastrous financial breakdown. The new deal requires tax increases as well as tougher spending cuts in return for an EU bailout of about €85bn (£61bn, $95bn) in the third Greek bailout.