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Merkel relieved with parliament approvals, but only temporarily
Last Updated(Beijing Time):2012-06-30 12:10

German Chancellor Angela Merkel finally can enjoy a sweet sleep, at least on Friday night, after the parliament approved two key rescue instruments for the crisis-gripped eurozone -- the permanent bailout fund and the new fiscal pact.

The "iron lady", portrayed by media for her unyieldingness, experienced a tough week, having a series of meetings with her European counterparts plus an over 15 hours of overnight bargaining in Brussels, where a closely watched EU summit took place.

Shortly after the summit on Friday afternoon, the chancellor rushed back directly to the Bundestag, or Germany's lower house of parliament, to face a new round of questioning and fighting.

The unrest among German lawmakers stemmed from the reported "huge concession" by Merkel in Brussels, as she agreed to open a gate for direct cash injection for weak banks through the upcoming permanent bailout fund, or the European Stability Mechanism (ESM).

Germany had said many times that the rescue fund could only be requested by governments, and not for direct aid to banks.

The new changes in Merkel's stance made the votes in Bundestag more sensitive and complicated, as some lawmakers, especially those from the Left party called for postponing the planned vote on the ESM.

The Bundestag's budget committee chairman, Social Democrat (SPD) Carsten Schneider, urged Merkel to explain "her 180-degree turn," vowing that his party, the main opposition in parliament, would never vote for an unknown package.

Queries even came from Merkel's own camp. Wolfgang Bosbach, a member of Merkel's ruling Christian Democrats (CDU), said the altered rescue fund would mean "the monetary union is turning into a liability union."

The chancellor firmly defended her decision and strove to calm agitated lawmakers, saying she never betrayed the "philosophy of no benefit without compensation," and any direct recapitalization would come with strict and explicit conditions, one of which is the establishment of the EU bank supervisory body.

She promised that "any change in the activity of the ESM would then once again be approved by the Bundestag."

The voting in both the lower and the upper house of parliament, which resulted in two-thirds majorities in both cases, indicated that the oppositions, particularly the SPD and the Greens, decided to stand by the two key instruments despite the unexpected changes in Brussels.

Experts attributed the smooth passes in parliament to the homework Merkel has done before. After weeks of horse-trading, Merkel managed to reach an agreement with the main oppositions ahead of the EU summit. In return for the oppositions' support for the ESM and the fiscal pact, Merkel committed herself to campaigning for a Europe-wide financial transaction tax and paying more attention to the growth and job creation.

Moreover, most lawmakers from the SPD and the Greens are aware that the Brussels accords are eyeing new settings "in the distant future," at least in a medium term, and any changes to the voting schedule would send a nervous market, which has just calmed down a little by good news from the summit, into turmoil again.

As Merkel said, Friday's voting in the German parliament, the last round before the summer break, is "sending a very clear signal to the rest of the world -- we are committed to the euro."

The chancellor believed that with these arrangements, Europe is taking an "irreversible step toward a sustainable stability Union."

Rainer Bruederle, parliamentary leader of the Free Democrats (FDP) which is Merkel's junior coalition ally, said the ESM, with contribution of some 200 billion euros (250 billion dollars) from Germany, and the fiscal pact, mainly inspired and drafted by Berlin, brought Germany a true stamp called "the European."

However, the approval by parliament doesn't mean all hurdles have been cleared in the process of ratification. The powerful Constitutional Court has been on guard against any legal challenge related to the rescue tools, especially the potential power yielding to Brussels, which risks violating the basic law.

In a series of rulings since 2009, the court has given more say to the parliament in weighing any rescue mechanism and integration measure.

Last week, the Constitutional Court asked President Joachim Gauck to delay signing the ESM and the fiscal pact into law, saying it needed more time to rule on appeals and suits on the legality of the two arrangements. The court said it has received about 1,200 objections.

Without Gauck's signature, the two instruments would have no legal force at all, meaning Germany, the paymaster in Europe, could not catch up with the scheduled deadline for implementing the ESM on July 1.

Although the highest court would finally turn on a green light this time, some law experts said a series of moves toward European integration have caused great concerns of the Constitutional Court.

If Germany hopes for a bigger step toward a fiscal and political union, as dreamed by the pro-Europe Merkel and her party, it would inevitably hold its first ever national referendum after the World War II to change the Constitution, some observers said.

Finance Minister Wolfgang Schaeuble, Merkel's close ally, said this week that a referendum for greater integration might come sooner than many previously thought. For Merkel, it's time to think about and prepare for some work with super-high sensitivity.

Source:Xinhua 
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