Dec. 2 (Bloomberg) -- Lawmakers in Berlin backed Germany’s contribution to the 85 billion-euro ($112 billion) bailout for Ireland as Finance Minister Wolfgang Schaeuble said additional measures to calm financial markets aren’t needed.
The lower house of parliament’s Budget Committee approved the emergency-aid package at a meeting late yesterday, Otto Fricke, a committee member for Chancellor Angela Merkel’s Free Democratic Party coalition partner, said by phone today. Germany’s share of the aid package is about 6.25 billion euros, the lower house said in its HIB newsletter.
Europe is in the throes of a sovereign-debt crisis that spread from Greece to Ireland and threatens to engulf the entire euro area. The market decline since the European Union bailout of Ireland was announced on Nov. 28 is exaggerated and doesn’t necessitate a reaction by policy makers, Schaeuble said in Paris late yesterday.
“The market’s nervousness over some countries is excessive,” he said. “Governments shouldn’t always respond to market nervousness.”
Bonds, stocks and the euro rallied yesterday as markets interpreted a comment from European Central Bank President Jean-Claude Trichet as a signal policy makers may step up their response. Observers “are tending to underestimate the determination of governments” to shore up the euro region’s stability, Trichet told lawmakers in Brussels yesterday.
‘No Economic Foundation’
The German aid was passed with the support of the opposition Social Democrats and Greens, Fricke said. Only the post-Communist Left Party failed to back aid.
“The current yield spreads for Irish bonds have no economic foundation,” Norbert Barthle, Budget Committee spokesman for Merkel’s bloc of Christian Democrats and the Christian Social Union, said in an e-mailed statement. “We must counter speculation against the euro and refute the speculation against the euro in an economically reasonable way.”
Barthle said Merkel’s bloc has “no doubt” that Ireland will meet its obligations under the rescue package.
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