After an accelerated legislative process, 390 deputies in Germany’s lower house of parliament, the Bundestag, voted in favor of a bill that could see the country lend Greece 22.4 billion euros over three years. A total of 72 lawmakers voted against and 139 abstained.
In a separate sitting, the Bundesrat upper house also approved Germany’s contribution to a 110 billion euro rescue plan that was agreed by the International Monetary Fund (IMF) and euro zone members last weekend.
Politicians in Spain and Portugal–two of the countries the market views as most at risk of contagion from Greece’s spiraling debt crisis–approved their governments’ smaller contributions.
In Den Haag, the Dutch parliament effectively granted approval for the country’s 4.7 billion euro ($6.3 billion) contribution, by rejecting a motion against it.
Up against debt servicing costs that are rising almost daily, Greece faces a race against time to start tapping the rescue package ahead of a 19 May deadline for refinancing an 8.5 bln euro bond.
A potential delay to payments from the package’s biggest contributor Germany came via a lawsuit filed in the country’s highest court by a group of academics. The suit, which had been expected, is thought to have little chance of success.
Martin Ibler, an expert on constitutional law from the University of Konstanz, said he did not believe the academics’ complaint, nor their attempt to seek a court injunction to prevent President Horst Koehler signing off the aid bill, would succeed.
However, the constitutional court could set out arguments in a justification for its ruling that would “state more precisely and limit the scope” of the government and parliament’s ability to act on future cases like Greece, Ibler said.
One former judge of the court, who declined to be named, told Reuters this week he was skeptical the court action would succeed and that he did not expect the Greek loans to be held up by it.
Earlier Finance Minister Wolfgang Schaeuble told the Bundestag the aid would uphold Germany’s postwar legacy of serving peace in Europe.
“The joint European currency, the joint European economic area were right,” he said. “There is no comparable alternative to them in the 21st Century in the age of globalization. That is why we must defend the joint European currency.”
Despite initial resistance to agreeing Greek aid due to massive popular opposition to a bailout, Merkel said this week the future of Europe depended on approving the package.
Schaeuble said that, given the options available to legislators, policymakers agreed there was no alternative.
“The President of the Bundesbank, the President of the European Central Bank, the director of the IMF, and many others say it would be devastating to risk allowing a member of the euro zone, Greece, to become insolvent,” he said.
Debt restructuring was not the answer either, he added.
The voting coincided with increasing political scrutiny of the bailout in the run-up to an election on Sunday in North Rhine-Westphalia (NRW), Germany’s most populous state.
If Merkel’s center-right coalition of conservatives and pro-business Free Democrats (FDP) lose, they will forfeit their majority in the Bundesrat, making them reliant on the opposition to pass many laws.
The aid bill got backing from Germany’s opposition Greens, though the opposition Social Democrats said they would abstain.
In Lisbon, both the ruling Socialists and the opposition center-right Social Democrats backed Portugal’s 2.06 billion euro (US$2.76 billion) share of the package, which was approved by the country’s parliament.
In Madrid, the Spanish cabinet in turn approved a 9.8 billion euro (US$13.15 billion) payment.
