New Delhi: The lower house of Germany's Parliament resoundingly approved Berlin's contribution to a euro zone-wide aid package for Spain's banking sector on Thursday.
The Bundestag backed the bailout by 473 votes, with 97 votes against and 13 abstentions - far more than the simple majority of the 583 members present that Chancellor Angela Merkel needed.
But Merkel fell short of a symbolically-important ‘chancellor majority’ after 22 lawmakers from her own coalition voted against and one abstained. This was slightly fewer than the 26 coalition lawmakers who opposed the permanent bailout scheme and fiscal pact compact in parliament on June 29.
The outcome of the vote had been largely a foregone conclusion after the main opposition parties had signalled they would back the package.
Spain applied for a euro zone bailout late last month as the state of its banking sector, laden with bad debts, deteriorated rapidly. On Thursday, Bankinter posted first half net profit down more than 77 percent and said it had written down 275.2 million euros against deteriorating real estate assets.
The Spanish government had to offer a euro lifetime record interest rate on Thursday to sell five-year bonds, highlighting Madrid’s precarious position and pushing 10-year bond yields back above the 7 per cent level seen as unsustainable in the long term.
Germany, Europe’s largest economy, will guarantee almost 30 per cent of the new euro zone aid package, whose total value may reach up to 100 billion euros.
Copyright @ Thomson Reuters 2012
The Bundestag backed the bailout by 473 votes, with 97 votes against and 13 abstentions - far more than the simple majority of the 583 members present that Chancellor Angela Merkel needed.
But Merkel fell short of a symbolically-important ‘chancellor majority’ after 22 lawmakers from her own coalition voted against and one abstained. This was slightly fewer than the 26 coalition lawmakers who opposed the permanent bailout scheme and fiscal pact compact in parliament on June 29.
The outcome of the vote had been largely a foregone conclusion after the main opposition parties had signalled they would back the package.
Spain applied for a euro zone bailout late last month as the state of its banking sector, laden with bad debts, deteriorated rapidly. On Thursday, Bankinter posted first half net profit down more than 77 percent and said it had written down 275.2 million euros against deteriorating real estate assets.
The Spanish government had to offer a euro lifetime record interest rate on Thursday to sell five-year bonds, highlighting Madrid’s precarious position and pushing 10-year bond yields back above the 7 per cent level seen as unsustainable in the long term.
Germany, Europe’s largest economy, will guarantee almost 30 per cent of the new euro zone aid package, whose total value may reach up to 100 billion euros.
Copyright @ Thomson Reuters 2012
