Mensajepor Peor_es_nada » Vie May 07, 2010 12:36 pm
BERLIN (Dow Jones)--Germany Friday gave the go-ahead to the country's unpopular contribution of up to EUR22.4 billion in emergency loans to Greece, even as a group of academics sought a court injunction to block the payment.
German President Horst Koehler signed the bill after both the upper house of parliament, which represents Germany's 16 states, and the lower house of parliament backed the bill.
Approval was expected as Chancellor Angela Merkel's center-right coalition holds a majority in both houses even though the bailout has been controversial, partly as Germany will be the biggest contributor to the aid package.
Germany has tackled painful structural reforms of its own to deal with high deficits without outside help. The unpopular aid also comes ahead of crucial state elections Sunday. Recent opinion polls suggest Merkel's ruling center-right coalition parties may lose.
The government was seeking parliamentary approval for the aid to debt-ridden Greece, which is part of the EUR110 billion, three-year bailout plan set up by euro-zone countries and the International Monetary Fund, the biggest rescue fund in the short history of the euro zone.
"We have to make a difficult decision today," Finance Minister Wolfgang Schaeuble told the lower house. "A decision in a time which is cause for great concern to many people in Germany, in Europe, in Greece and beyond."
The euro, the euro-zone and the European internal market "are without a comparable alternative in the 21st century," Schaeuble said. "That's why we must defend our common European currency as a whole...This is the decision which we have to make today, at a time of great uncertainty for people, also markets and not just in Europe."
Germany's loans will be provided by state-owned KfW Banking Group with the government standing guarantee.
Lawmakers from opposition parties have demanded that creditor banks must be forced to contribute to the bailout package. But the government has favored voluntary contributions, which banks and insurers agreed to Tuesday, saying they would keep open credit lines to Greek bonds and Greek banks over the next three years.
But also within the ruling party, the bill wasn't backed by all. Peter Gauweiler, a lawmaker in the ruling Christian Social Union, said he voted against the bill "because it is counterproductive to reaching the main goals of stabilizing the euro and restoring Greece's solvency." The loans will increase Greece's debt burden and will "only help international big banks to hedge against speculative credit business."
Greece said it wants aid from the joint European Union-IMF loan mechanism to be made available within days of its formal request.
Euro-zone countries will provide up to EUR80 billion while the IMF will contribute up to EUR30 billion. Germany's contribution will be up to EUR8.4 billion this year, and up to a combined EUR14 billion in the second and third years.
Separately, a group of retired professors filed a lawsuit against the bill Friday at the constitutional court in Karlsruhe. The group says Greece won't be able to repay the aid and that the bailout infringes the European Monetary Union's constitution.
The court said it will rule on the case promptly, it may be Friday or next week. There's no public hearing on the case, said a spokeswoman for the constitutional court.
The government has repeatedly said the Greek bailout law isn't violating the constitution.
