Merkel: German Cabinet to OK rescue deal

German PM calls unpopular €123 billion package necessary to protect compatriots' money.

May 10, 2010 13:45
1 minute read.

Merkel At Meeting. (photo credit: AP)


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BERLIN — The German government will move swiftly to approve its share of the new rescue package for the eurozone, Chancellor Angela Merkel said Monday, calling the plan a necessary measure to protect her compatriots' money.

Merkel said her Cabinet will pass the package of loan guarantees in a special meeting Tuesday and it will then go to parliament for "quick but thorough" consideration.

Under the three-year plan, the European Commission — the EU's governing body — will make €60 billion ($75 billion) available while countries from the 16-nation eurozone would promise backing for €440 billion ($570 billion).

The IMF would contribute an additional sum; and the European Central Bank said it is ready to buy debt from the eurozone.

"We are convinced that everything was done to be able to secure the stability of our currency," Merkel said at a brief early morning news conference.

"I can say this to our citizens: we are protecting the money of people in Germany," she said. "This package is necessary and serves to guarantee and secure the future of the euro."

Germany's share of the loan guarantees is expected to be some €123 billion.

Merkel stressed that budget consolidation in the 16 eurozone countries will have "extraordinary importance."

"Access to the guarantees we are setting up will be linked to consolidation programs being provided to the IMF and the European Union, which will then be regularly reviewed," Merkel stressed.

Rescuing Greece from its own financial irresponsibility is unpopular in Germany. The government on Friday pushed through parliament Germany's share of a separate rescue package for Greece.

Merkel said that "we don't need to approve this bill within two or three days but can complete deliberations with a little more time" because the European Commission's initial €60 billion contribution doesn't require national approval.

"The eurozone's member states showed yesterday that we have a common political will to do everything for the stability of our common currency," she said. "This is a determined and united message to those who think that they can weaken Europe."

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