Brussels, 18/04/2013 (Agence Europe) - The German parliament voted on Thursday 18 April by a wide majority in favour of the Cypriot financial bailout from the European stability mechanism (ESM).
On the day of the vote, German Finance Minister Wolfgang Schäuble said that the troika (European Commission, ECB and IMF) “consider the fate of Nicosia relevant to the Eurozone”. Some German parliamentarians had wondered whether the Cypriot economy, which is only 0.2% of the eurozone in terms of wealth, would have much on an impact on the rest of the eurozone and whether, therefore, it was worth bailing it out.
Germany's refusal to take rapid action led European leaders, like the head of the ECB, Mario Draghi, and Euro Commissioner Olli Rehn, to warn of the danger of underestimating the problems facing the island. On Wednesday, Schäuble talked of the danger of the Cypriot problems spreading to Italy and Spain and admitted that Cyprus was in a desperate situation.
On Thursday, 486 of the 601 German MPs voted in favour, 102 against and 13 abstained in a vote on whether to endorse the Cypriot aid package of €9 billion from the eurozone, just under a third of it from Germany. He said after the vote that Germany had assumed its responsibilities for the euro and the eurozone, adding that for an exporting nation like Germany, the single currency was a crucial basis for growth, jobs and prosperity. The Bundestag also voted in favour of extending the repayment deadlines for loans to Ireland and Portugal (see EUROPE 10827).
The parliaments of other member states, the Netherlands for example, are due to endorse the Cypriot aid programme later this month so that the first ESM payment to Cyprus can be made early next month. Finland will vote on Friday.
The Cypriot parliament also needs to endorse the troika deal. It will be a tight vote because opposition parties are hostile to the deal and they hold 27 of the 56 seats in parliament. The vote needs to be taken before 26 April, when the Memorandum of Understanding with the European Commission is due to be signed. (EL/transl.fl)