German minister beats drums for EU bailout mechanism

17th May 2011, Comments 0 comments

German Finance Minister Wolfgang Schaeuble has promised members of parliament that strict conditions will be attached to any future bailout of euro zone members, as of 2013.

"There must be no financial help without binding promises" once the permanent European Stability Mechanism (ESM) comes into force in two years' time, Schaeuble said in a letter to conservative and liberal MPs of Angela Merkel's ruling coalition.

The letter sent Friday was obtained Tuesday by AFP.

Parliament is expected to vote on introducing the ESM in the autumn.

Public opinion in Germany has been increasingly critical of European Union measures to rescue heavily-indebted countries within the eurozone, including Greece, Ireland, and Portugal.

Germany is the largest financial contributor among European nations when it comes to bailing-out euro zone partners.

Some MPs, including from within the ruling majority, have threatened to abstain or even oppose the ESM if strict conditions are not applied, such as involving private investors in any bail-out plan.

"That's something demanded by all parliamentary groups, and if it's not included, the vote could be very close," liberal (FDP) MP Oliver Luksic told AFP.

"If (such a measure) isn't included in the bill, I'll have to seriously think" about opposing it, he added.

A majority of delegates at an FDP convention Saturday voted down a motion opposing the ESM, but debate of the matter was lively.

In his letter Schaeuble stressed that "a response to mistakes of the past cannot be to go back on European integration, but to ensure an adaptation and evolution of this integration".

The ESM, a permanent crisis mechanism, will be set up in the eurozone in mid-2013.

© 2011 AFP

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