MercoPress. South Atlantic News Agency

German opposition wants growth targets before supporting EU new fiscal pact

SPD chairman Sigmar Gabriel, further talks planned for June 13

A top ally of Chancellor Angela Merkel's conservatives appealed to the opposition Social Democrats and Greens to refrain from “playing political games” and back the government to endorse Europe's new fiscal pact and permanent bailout fund.

The SPD and their allies the Greens - making common cause with France's new Socialist President Francois Hollande and some other EU leaders - say the pact must be accompanied by new measures to promote growth and investment in Europe.

Hermann Groehe, Merkel's top deputy in the Christian Democrats party (CDU), said in a radio interview it was important for Germany to send a signal across Europe that it is fully committed to the European Stability Mechanism (ESM).

Merkel needs SPD support in the two houses of parliament to secure ratification of the fiscal pact agreed among EU leaders that will impose tougher budgetary rules.

A two-thirds majority is needed because the fiscal pact, seen as the centrepiece of Europe's drive to overcome its debt crisis and recover market confidence, affects the constitution and national sovereignty.

“There is no room in this question for playing political games,” Groehe told Deutschlandfunk radio. “It would be good if we in Germany, as the anchor of stability in Europe, send out a signal that stability and solidarity belong together.”

The government and opposition parties have been edging nearer a compromise to pave the way for parliamentary approval of the new fiscal pact and permanent bailout fund.

SPD chairman Sigmar Gabriel has said securing parliamentary approval before the summer recess - as Merkel wants - is possible but hinged on the growth proposals to be put forward by the government. Further talks are planned for June 13.

“We have clear-cut conditions in the interest of a stable Euro zone and the coalition has to accept them - otherwise there won't be backing from the SPD,” SPD deputy party leader Andrea Nahles said.

Greens parliamentary floor leader Renate Kuenast added: “The Greens aren't going to be fooled by a growth package unworthy of that name.”

The ESM is scheduled to start work on July 1 but Merkel's government insists that the bailout fund must be approved at the same time as the fiscal pact.

Despite the SPD demands, the party - which has until now backed Merkel on Euro zone policies - has made clear it will not torpedo the fiscal pact, seen as the centrepiece of Europe's drive to overcome its debt crisis and recover market confidence.