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German lawmakers approve second bailout package for Greece

February 27, 2012 | 10:24 am

German lawmakers overwhelmingly approved a second bailout package for debt-ridden Greece on Monday. The victory for Chancellor Angela Merkel comes despite popular opposition in Germany to giving Greece another rescue package
REPORTING FROM BERLIN -- The German people may not be thrilled about it, but Germany is giving Greece another chance. 
 
Germany's lower house of parliament, the Bundestag, voted overwhelmingly Monday to approve a second Greek bailout. The rescue package, worth $175 billion, is seen as crucial to preventing a disorderly default in debt-ridden Greece that could have grim consequences for the global economy and the future of Europe's common currency.  
 
The 496-90 vote came despite substantial popular opposition to extending another lifeline to Athens. A poll released Sunday in the tabloid Bild found that 62% of respondents were against the new bailout, with just 33% in favor. The newspaper ran the word "STOP" in giant letters on its front page Monday and urged Bundestag members not to "continue down the wrong track."
 
As Europe's largest economy, Germany is responsible for the biggest share of the continent's rescue packages and bailout funds. Public opposition to continued bailouts has grown as the Greek crisis has dragged on. 
 
"I know there are some who ask whether Greece is a hopeless case, whether it wouldn't be better if Greece returned to the drachma,” Chancellor Angela Merkel told lawmakers before the vote. She said the risks of a Greek exit from the euro were "incalculable and therefore untenable." 
 
"Europe will fail if the euro fails; Europe will gain if the euro gains," Merkel said, adding that the bailout was "not just in the Greek interest. It's also in the European interest, and therefore in the German interest."

The controversial rescue package, which was agreed to last week by Eurozone finance ministers, was widely expected to pass the Bundestag, because it commanded support from opposition parties as well as from most members of Merkel's center-right ruling coalition. But in a small setback for the chancellor, she fell slightly short of securing approval of the bailout with an absolute majority from within her own coalition, requiring a handful of opposition votes for passage.

One of the dissenters, Frank Schaeffler of the junior governing partner Free Democrats, questioned the effectiveness of Europe's rescue actions over the last two years.

"Nothing's gotten better," he said. "Everything’s gotten worse."
 
The most passionate criticism of the Greek rescue package come from Left Party chief Gregor Gysi, who compared the harsh austerity measures being imposed on Greece to the punitive reparations Germany had to pay after World War I.  
 
"You're giving Greece Versailles when it needs a Marshall Plan," he said. His analogy drew sharp criticism from lawmakers of several other parties. 
 
Besides approving the bailout, Germany is under international pressure to allow Europe's permanent bailout fund to be increased substantially. Merkel's government has so far been staunchly opposed to such a move. But at a G-20 meeting in Mexico City over the weekend, German Finance Minister Wolfgang Schaeuble appeared to soften his position and expressed a willingness to discuss an expansion of the bailout fund next month.

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-- Aaron Wiener

Photo: Chancellor Angela Merkel is surrounded by lawmakers in Germany's lower house, the Bundestag, before a vote to approve a second bailout for debt-ridden Greece. Credit: Michele Tantussi / Bloomberg

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