Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Eurozone crisis live: German parliament votes on Greek package

Will Bundestag approve €130bn loan deal?
German interior minister: Greece should quit the euro
Today’s agenda

8.44am: Germany’s interior minister has become the first member of Angela Merkel’s cabinet to suggest Greece should leave the eurozone.

Hans-Peter Friedrich broke ranks in an interview with Der Spiegel, in which he says: “Greece’s chances of regenerating and becoming competitive are definitely greater outside the eurozone than in.”

Friedrich added:

I’m not talking about kicking Greece out, but to create incentives for a departure which the Greeks will find hard to pass up.

Our Berlin correspondent, Helen Pidd, reports that Germany’s foreign minister swiftly rebutted Friedrich’s comments:

Friedrich is one of the weaker ministers in the German government – he
belongs to the CSU, the Bavarian sister party to to Merkel’s Christian
Democratic Union (CDU) and isn’t taken desperately seriously in
Germany. Chances are, he was just flexing his muscles for the CSU’s
conservative supporters in Germany’s rich south, most of whom are
rabidly against the Greek bailouts.

Nonetheless, it cannot be comforting reading for the Greeks. As a Spanish colleague from El Pais put it to me, Friedrich’s phrasing has sinister tinges of Marlon Brando’s line in The Godfather: “I’m gonna make him an offer he can’t refuse.”

But Germany’s foreign minister today brushed off all speculation about a Greek exit. “I don’t understand the political speculation about a Greece outside the eurozone,” Guido Westerwelle told Die Welt.

8.24am: European stock market have fallen in early trading.

The FTSE 100 dropped 30 points to 5905, a fall of around 0.5%. Other markets fell by similar amounts, with the German DAX and French CAC both down around 0.7%. This follows a lacklustre performance in Asia.

The recent rally in oil is still causing concerns, with traders saying the high prices could hamper the global economy. As Michael Hewson of CMC Markets explained, Europe is particularly vulnerable to an oil shock.

This surge in prices has raised concerns that it could choke off the recent improvement in US economic data, as well as make economic conditions in Europe worse than they already are, especially in the periphery, where Greece, Spain and Italy remain particular vulnerable to the Iranian oil embargo.

8.21am: Angela Merkel should win this afternoon’s vote, but the big question is whether she suffers a significant rebellion.

Elements of Merkel’s coalition government are unhappy about extending a second financial package to Greece. Last September, 15 deputies voted against the expansion of the European Financial Stability Fund.

It would only take a few more rebels to leave Merkel dependent on opposition votes – not a comfortable position for the chancellor. Her coalition controls 330 seats in the Bundestag, and needs 311 votes for victory.

Members of Merkel’s Christian Democratic Union (CDU) party were vocal about their concerns over the weekend. As Reuters reported:

“Quite clearly the mood in Germany is turning against further rescues for Greece,” Klaus-Peter Willsch, a leading dissident on Greek aid in Merkel’s Christian Democrats (CDU), said in an interview with Reuters on Sunday.

“But that’s not surprising. This is all deja vu for the public. We’ve been promised all kinds of things that aren’t fulfilled and then a few months later there’s the need for another rescue package. The public’s faith is fading fast.”

An opinion poll published yesterday found that 62% of Germans oppose the new Greek deal.

8.04am: Here’s today’s agenda:

Today’s debate in the Bundestag over Greek loan deal begins at 2pm GMT (3pm CET). Angela Merkel will open the debate, with a vote taking place later this afternoon.

Eurozone M3 money supply data for January. 9am GMT / 10am CET
Italian business confidence for February – 9am GMT / 10am

Debt auctions due this morning:
Italy: €12.25bn of short-term bonds
Belgium: up to €2.9bn of long-term bonds.
Germany: €3bn of 12-month bills
France: Treasury bill sale

8.00am: Good morning, and welcome to our rolling coverage of the eurozone debt crisis.

Today, Germany will decide whether it supports the financial aid programme which was agreed by euro finance ministers a week ago. The vote takes place in the Bundestag (the lower house) this afternoon. The package is expected to be passed, but Angela Merkel may suffer a rebellion from her own side.

The vote is overshadowed by a warning from Germany’s interior minister that Greece should quit the euro (of which more shortly here).

Elsewhere, we’ll be looking at the ramifications of the G20 summit which ended in Mexico yesterday.

And in the bond markets Italy, Belgium, France and Germany are all holding debt auctions. With banks gearing up for another massive offer of cheap loans from the European Central Bank later this week, they are likely to go well. But we’ll see…. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds