Bundestag Approves Euro Zone Assistance for Spain with Broad Majority
Enlarge image Finance Minister Wolfgang Schäuble in the Bundestag (© Bundesregierung/Imo)
With a broad majority the German Bundestag approved the euro zone assistance package for Spain’s banking sector today. "We are contributing to the financial stability of the euro zone as a whole,” Finance Minister Wolfgang Schäuble said in a policy statement calling for approval of the package.
While the economic situation in Europe remains burdened, not least by uncertainties in the financial markets, the measures and the control mechanisms to help the affected countries are making significant progress, Schäuble said. But winning back trust will take time. “That can only happen step by step.”
Spain needs the help of its European partners to deal with the extreme uncertainties in the financial markets, which are a result of the upheaval following the collapse of the real estate bubble. Schäuble warned that the current problems could lead to grave contagion effects in the euro zone. But the Federal Government finds the prerequisites for Spain seeking assistance from the European Financial Stability Facility (EFSF) as fulfilled.
Enlarge image Chancellor Merkel and other parliamentarians cast their votes on July 19. (© picture alliance / dpa) “We have a strong interest in making it possible for Spain to continue to pursue its promising path of fundamental economic and financial policy reforms under its own power,” he said.
The Spanish government formally asked for the euro group’s financial assistance for the recapitalization of specific banks on June 24. The approval of the Bundestag was necessary before the assistance could be enacted by the euro group.
As for the question of liability, Finance Minister Schäuble was clear: Spain is making the request, Spain will receive the money for the recapitalization of banks and Spain as a state will be liable. This will also be the case when the aid program is transferred to the new ESM rescue measure.