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Strong support for Merkel ahead of the Euro bail out summit

Wednesday, October 26th 2011 - 15:22 UTC
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Banks will have to accept write-down of over 50% in Greek bonds, anticipates Merkel Banks will have to accept write-down of over 50% in Greek bonds, anticipates Merkel

Germany's Bundestag lower house of parliament approved on Wednesday a motion to strengthen the Euro zone rescue fund via leveraging, providing Chancellor Angela Merkel with the mandate she needs to negotiate at a key Euro summit in Brussels.

The vice president of the lower house said 503 lawmakers had voted in favour of the motion, 89 had voted against and there were 4 abstentions.

The motion states that the European Central Bank (ECB) will no longer need to buy bonds on the secondary markets, and that the rescue fund cannot be financed through the ECB.

Merkel needed to win the vote in the Bundestag to have a mandate to negotiate a deal with other EU leaders aimed at delivering a range of measures to stop the Euro zone debt crisis spiralling.

The chancellor's hands have been tied in her negotiations on the Euro zone crisis since a Constitutional Court ruling last month demanded a greater say for German lawmakers on bailout issues.

Addressing the Bundestag Chancellor Merkel said European leaders should agree on what would amount to a 50% write-down of Greek debt from the private sector at a summit to tackle the Euro zone debt crisis later.

“I will work towards reaching sustainable decisions this evening,” she said, warning that Greece would need the support of the European Union for some time to come and that no overnight fixes were in sight.

“We will do all we can to get Greece back on its feet as soon as possible,” she said, adding: “A debt write-down alone will not solve Greece's problems ... structural reforms must still be implemented”.

”The goal of the meeting (Wednesday) tonight must be to get a result under which Greece will by 2020 have a debt to GDP ratio of 120%” said Merkel.


Categories: Economy, International.

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  • fantazum2011

    They are making a big error that will hang germany in chains of debt and accomplish nothing.
    The ten member states like Britain, that do not have monetary union could decide their own fiscal policy via a union within the union.
    If Greece leaves the union it will cause an exodus of capital not just from Greece but also Portugal,Spain,Italy and even Ireland - which will make matters a lot worse.
    Whatever choice - within the present parameters - the directors of the Union decide - they cannot win unless they actually abandon the banking system and its debts which is unthinkable.
    If they keep the Union together, they drag the people of Europe into generations of debt for perhaps no result.
    If they abandon Greece and perhaps Portugal and Italy and Spain, then a catastophic collapse of the banking system might occur.
    A terrible predicament.

    Oct 26th, 2011 - 09:59 pm 0
  • Fido Dido

    Europe is finished, spiritual, culturally and financially. Those intelligent psychopaths know what they are doing but destroy the nation pure for money, though they tell in front of the camera it's bad but necessary and that its normal, that to save a money problem with more money created of nothing.

    Oct 27th, 2011 - 03:37 pm 0
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