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Saturday, 3 March 2012 - Merkel faces challenge at home on fiscal pact |
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      Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Legal Deals Earnings Social Pulse Business Video The Freeland File Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia India Insight World Video Reuters Investigates Decoder Politics Politics Home Election 2012 Issues 2012 Candidates 2012 Tales from the Trail Political Punchlines Supreme Court Politics Video Tech Technology Home MediaFile Science Tech Video Tech Tonic Social Pulse Opinion Opinion Home Chrystia Freeland John Lloyd Felix Salmon Jack Shafer David Rohde Bernd Debusmann Nader Mousavizadeh Lucy P. 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Credit: Reuters/Eric Vidal BERLIN | Sat Mar 3, 2012 9:39am EST BERLIN (Reuters) - German Chancellor Angela Merkel faces an unexpected challenge in getting new euro zone budget discipline rules approved at home, after the government confirmed on Saturday the new treaty will require a two-thirds majority in both houses of parliament. This will leave Merkel depending on major opposition parties, who, despite having backed her in the past on a second Greek bailout package or extended powers for the bailout fund, are likely to set conditions for their support such as new measures to stimulate European growth. The need for a two-thirds majority for the fiscal compact was reported in a newspaper on Saturday and confirmed by a government spokeswoman. It has caused surprise as the German constitution already includes a "debt-brake" law, under which the federal government has until 2016 to cut its structural deficit to no more than 0.35 percent. It was this law which inspired the European legislation on budget discipline. However, as the fiscal compact treaty allows a country to be sued by its European partners in the European Court of Justice if it does not uphold budget rules, it affects sovereignty and the constitution, and hence requires a greater majority. "The government has in fact come to the conclusion that the fiscal comapct will have to be ratified under Article 23 of the constitution," a government spokeswoman said in emailed comments. Article 23 covers the transfer of sovereign powers to European level. Last Monday the opposition Social Democrats (SPD) and Greens backed Merkel in a Bundestag lower house of parliament vote on the second bailout for Greece, which needed only a simple majority. The package was approved with a comfortable 496-90 victory with five abstentions, although Merkel faced growing revolt from within her own coalition. Frank-Walter Steinmeier, head of the Social Democrats (SPD) parliamentary group, said Merkel was now dependent on the opposition. "Chancellor Merkel must approach us immediately. She hasn't done this in the past... a two thirds majority in the Bundestag and Bundesrat cannot be assumed as a matter of course," he said in a statement. "I cannot imagine that the pact would be approved without accompanying measures to support growth," he added, urging Merkel to clarify as soon as possible how parliament would vote on the fiscal compact. Both the SPD and the Greens have called for a European financial transactions tax which could be used to finance a stimulus program for the bloc. EU finance ministers meet on March 13 in Brussels, offering an opportunity to discuss the European Commission's blueprint on such a tax which faces stiff opposition from London. (Reporting by Alexandra Hudson and Holger Hansen; editing by Keiron Henderson) World Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Advertise With Us Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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