26 Feb 2012

Bundestag to vote on Greek deal on Monday

10:19 am on 26 February 2012

Members of Parliament in Germany are the next hurdle for the Greek bailout.

The Bundestag (Lower House) is to vote on Monday on a resolution stating intention to agree to a loan deal worth 130 billion euros ($US173 billion) which was agreed last week.

Deutsche Welle Radio reports they will vote on a resolution stating its intention to agree to the bailout deal. This is because technically, the deal has not been clinched.

The European Financial Stability Facility is to lend 117 billion euros to Greece over the next three years. Germany will contribute 29% (34 billion euros) of this.

The Bundestag agreed to these guarantees in principle when it voted to extend the European bailout fund last September.

Now, parliament has to assign the debt guarantees to a specific country.

Many Bundestag members are sceptical that Greece can meet the fiscal conditions required to bring its public debt down to 120% of GDP by 2020.

Germany also wants to see whether enough investors accept a debt swap, which Athens wants to complete by 12 March.

Greece is due to repay 14 billion euros in bonds on 20 March. However, Deutsche Welle Radio reports this amount can be paid with funds from the first bailout package, which still has 37 billion euros available.

The French National Assembly has already approved the EFSF bailout deal. So has Estonia.

No date has been set yet for a vote by parliament in the Netherlands. Finance Minister Jan Kees de Jager intends to inform parliament by the end of the week.

Slovakia, Cyprus, Malta and Portugal will also vote on the deal. However, Parliamentary decisions are not needed in any other eurozone member countries.