Throughout the European debt crisis, Germany Chancellor Angela Merkel has tended to stay calm; she has taken action only when market jitters threatened to get out of hand. But now she’s canceled her upcoming trip to Russia, a decision made at a time when markets are mostly rising.
Could Ms. Merkel’s behavior be cause for alarm? She does seem worried that German lawmakers may thwart plans to give new powers to the European Financial Stability Facility, the euro-zone bailout fund.
A German government official played down the concern, saying the trip coincides with the beginning of parliamentary debate on the rescue fund reform and Ms. Merkel is aware of the “significance” of that.
The Russia trip was planned before the government knew when the Bundestag would begin its discussions on the EFSF. Still, the final vote isn’t until the end of the month, and Ms. Merkel called off her trip at a sensitive time for relations with Russia; the German leader doesn’t cancel trips to Russia lightly.
Euro-zone leaders agreed July 21 to allow the EFSF to buy sovereign bonds directly in the secondary market, having earlier decided to boost the fund’s effective lending capacity to €440 billion ($634.26 billion) from about €250 billion previously.
Some members of Ms. Merkel’s own Christian Democratic Union party have balked at giving the EFSF more power without efficient parliamentary control, and others fret about the boosted volume. The number of party rebels so far seems small, consisting only of backbenchers. But the dissent is getting louder, and a more senior member of Ms. Merkel’s CDU this week threatened to vote against the changes to the EFSF.
Ms. Merkel on Tuesday evening tried to bring CDU dissenters in line at a meeting with lawmakers. According to participants, the gathering was relatively calm. Ms. Merkel appealed to her party to keep in mind the big picture of the European project, not just current bailout measures.
Ms. Merkel is still likely to have sufficient support for the beefed-up EFSF, as the Green and Social Democratic opposition parties have indicated they will probably vote for the changes. But if a majority of lawmakers from her governing coalition fail to support the changes, it would send a dangerous signal of uncertainty.
By Bernd Radowitz
Source: http://blogs.wsj.com
Could Ms. Merkel’s behavior be cause for alarm? She does seem worried that German lawmakers may thwart plans to give new powers to the European Financial Stability Facility, the euro-zone bailout fund.
A German government official played down the concern, saying the trip coincides with the beginning of parliamentary debate on the rescue fund reform and Ms. Merkel is aware of the “significance” of that.
The Russia trip was planned before the government knew when the Bundestag would begin its discussions on the EFSF. Still, the final vote isn’t until the end of the month, and Ms. Merkel called off her trip at a sensitive time for relations with Russia; the German leader doesn’t cancel trips to Russia lightly.
Euro-zone leaders agreed July 21 to allow the EFSF to buy sovereign bonds directly in the secondary market, having earlier decided to boost the fund’s effective lending capacity to €440 billion ($634.26 billion) from about €250 billion previously.
Some members of Ms. Merkel’s own Christian Democratic Union party have balked at giving the EFSF more power without efficient parliamentary control, and others fret about the boosted volume. The number of party rebels so far seems small, consisting only of backbenchers. But the dissent is getting louder, and a more senior member of Ms. Merkel’s CDU this week threatened to vote against the changes to the EFSF.
Ms. Merkel on Tuesday evening tried to bring CDU dissenters in line at a meeting with lawmakers. According to participants, the gathering was relatively calm. Ms. Merkel appealed to her party to keep in mind the big picture of the European project, not just current bailout measures.
Ms. Merkel is still likely to have sufficient support for the beefed-up EFSF, as the Green and Social Democratic opposition parties have indicated they will probably vote for the changes. But if a majority of lawmakers from her governing coalition fail to support the changes, it would send a dangerous signal of uncertainty.
By Bernd Radowitz
Source: http://blogs.wsj.com
No comments:
Post a Comment