German politicians set to OK Merkel's euro summit remit

25th October 2011, Comments 0 comments

Germany's four main political parties backed a plan Tuesday for boosting the eurozone rescue fund's firepower, a day before parliament votes on it and Chancellor Angela Merkel attends a crunch EU summit.

Germany's coalition government parliamentary groupings, the conservative CDU/CSU, and its junior coalition partners, the Free Democrats (FDP), as well as the oppposition Social Democrats and the Green Party have signed the text, obtained by AFP.

The plan aims to increase the firepower of the 440-billion-euro European Financial Stability Facility (EFSF) without pouring any more fresh money into it, one of the main topics for European Union leaders at Wednesday's summit in Brussels.

Set up last year to help struggling eurozone countries, the fund currently has 440 billion euros which is now believed insufficient to face contagion from the eurozone debt crisis now threatening Italy.

Approval by the 620-strong Bundestag, or lower house of the German parliament, should give Merkel "guidelines for conducting the negotiations", Rainer Bruederle, the FDP's parliamentary head said.

These include the need to remain within the framework of rules already decided for the EFSF, a need to preserve the independence of the European Central Bank and the swift presentation of a European tax plan for financial transactions after the G20 summit on November 3-4.

The brief text refers to two models being examined for bolstering the EFSF -- an insurance model for the debt of struggling countries, and an option calling for the co-financing of aid by public or private investors.

"The two models are not mutually exclusive," the text says.

The wording has been deliberately kept quite vague "so that the Europeans have room for manoeuvre", Volker Kauder, who heads Merkel's parliamentary group of conservatives, said.

Parliamentarians are due to debate the text from around midday Wednesday before adopting it ahead of Merkel's departure for Brussels.

© 2011 AFP

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