German Parties to Set Out Terms for Cyprus Bailout ApprovalBrian Parkin
Germany’s ruling parties will set out their conditions this week for approving aid for Cyprus based on the “cornerstone” agreement drawn up by European finance chiefs, the German Finance Ministry said.
Lawmakers from the three coalition parties will draw up a formal resolution outlining their stance on Cyprus that will be introduced to the lower house of parliament this week, Finance Minister Wolfgang Schaeuble’s department said in an article posted on the ministry website today. The ruling parties have produced their own resolutions on crisis measures before to try and influence Merkel’s government and minimize the exposure of German taxpayers.
The blueprint, which may be modified by Cyprus’s government following a vote scheduled for today in the island’s parliament, will be augmented by the so-called memorandum of understanding produced by the troika of the International Monetary Fund, the European Central Bank and the European Commission, the ministry said. A final vote by the German lower house, the Bundestag, might take place in the second half of April, it said.
The ministry’s decision to explain its actions detailing “questions and answers on financial help for Cyprus” follows German government reassurances yesterday that bank deposits are safe in Germany and elsewhere in Europe since Cyprus is a “special case.”
The euro weakened 0.1 percent to $1.2945 as of 2:44 p.m. in Berlin after dropping to $1.2882 yesterday, the weakest since Dec. 10. The 17-nation currency plunged amid investor concern that the weekend decision by euro-area governments to levy a one-time tax on Cyprus bank deposits as part of a 17 billion-euro ($22 billion) bailout sets a precedent that might be copied elsewhere in Europe.
Schaeuble, who canceled his appearance at an event in Frankfurt today, will brief German coalition lawmakers on Cyprus and again tomorrow in a special meeting, Michael Grosse-Broemer, the chief whip for Merkel’s Christian Democratic Union, told reporters in Berlin.
A “positive” outcome to the Cypriot parliament’s deliberations would probably lead the CDU to give a “green light” for aid for Cyprus from the European Stability Mechanism, Michael Meister, the party’s deputy parliamentary chairman, said in a Bloomberg Television interview.