Merkel will need opposition votes for euro fund deal

By @ibtimes on

The German government may need a two-thirds majority in parliament to approve any deal on the new permanent rescue mechanism for the euro zone, meaning it will need opposition support for any compromise, Der Spiegel magazine reported on Saturday.

The report by the Bundestag's legal department underlines the challenge facing Chancellor Angela Merkel to convince the public and allies at home of a deal which will commit Germany to bankrolling future bailouts of euro zone member states.

At a summit in December European leaders agreed to set up a permanent mechanism from mid-2013 to solve sovereign debt problems. It will replace the temporary system -- a 750 billion euro emergency loan facility created by the EU and IMF in May.

As a quid pro quo for her support for the scheme, Merkel and French President Nicolas Sarkozy have put forward proposals for a competitiveness pact which is to be hammered out by March and has provoked strong opposition from other EU leaders.

Berlin's ability to compromise on the steps -- which seek to end wage indexation, raise retirement ages and lock debt limits into national constitutions -- may be influenced by what the government can sell to a domestic audience.

Der Spiegel said the legal opinion on the issue -- pointed to by an MP from Merkel's junior coalition partners -- found that a two-thirds majority would be required because the European Stabilisation Mechanism (ESM) would involve an extensive intrusion into the Bundestag's administrative sovereignty.

Merkel's center-right coalition would need backing from the opposition Social Democrats to obtain a two-thirds majority.

(Reporting by Erik Kirschbaum; editing by Patrick Graham)

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