German lawmakers are set to back a planned increase in the European rescue fund’s capacity, removing one hurdle in the path of Chancellor Angela Merkel as she prepares for a summit on tackling the euro-area debt crisis.
Merkel is due to address lower-house lawmakers on the crisis at about noon in Berlin today before the government puts plans to bulk up the 440 billion-euro ($612 billion) backstop to a vote. The coalition ensured cross-party support after persuading the main opposition Social Democrats and Greens to sign up to a motion that includes a cap on German guarantees.
“This greatly strengthens the negotiating positions of the government and the chancellor” as she heads to the summit in Brussels from the lower house, or Bundestag, Volker Kauder, the floor leader of Merkel’s Christian Democratic bloc, told reporters in Berlin yesterday after the CDU caucus met.
German backing to increase the effectiveness of the European Financial Stability Facility is one piece in the crisis-fighting jigsaw puzzle being assembled in Europe’s capitals. Agreement is still missing on how to bolster the EFSF, reductions in Greece’s debt load and recapitalizing banks.
It's a start, and I still think it's more or less too late to save the eurozone at this point, but Europe is going to give one last try to stopping the ever-burning Greek Fire before it immolates the continent and the global financial community...oh and the US as well.
Still, it's necessary for Germany to lead the way here. Nobody else in the EU is going to at this point. But I have to wonder how large the German appetite for schisse truly is.
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