Schaeuble warns coalition MPs to back EFSF reforms

BERLIN: German Finance Minister Wolfgang Schaeuble warned members of parliament in his ruling coalition that financial markets may doubt Europe's ability to act if they fail to back measures bolstering the powers of the euro zone bailout fund.

Schaeuble was quoted telling the Tagesspiegel am Sonntag newspaper he was confident deputies in Chancellor Angela Merkel's centre-right coalition would pass the measures on the European Financial Stability Facility (EFSF) on Sept. 23 without having to rely on opposition votes.

"We've got to find a reasonable balance between the EFSF and the understandable needs of parliament to have a say in the concrete work on the EFSF so that the markets don't have any doubts about Europe's ability to act," Schaeuble said.

Germany faces the crucial vote in parliament on bolstering the powers of the EFSF. Grumbling within Merkel's conservative party has spread, with one senior ally of hers vowing this week to vote against the measure.

The measure seems sure to pass with support from leading opposition parties. But political analysts warn if Merkel fails to pass the measure with MPs from her own coalition it could trigger a crisis of confidence and political turmoil.

Last month, euro zone leaders agreed in principle on a second bailout of Greece that would include a further 109 billion euros ($157 billion) from the EFSF and the International Monetary Fund through mid-2014.

Schaeuble told Der Tagesspiegel newspaper it was nonsense, as some opponents have suggested, that he and Merkel were trying to undermine parliament's authority with the EFSF reform measures.

"I emphatically reject that," Schaeuble said. "I'm a parliamentarian with all my heart and soul."

Schaeuble also said he was optimistic that the coalition would get its own majority for the EFSF measures and not have to rely on backing from the centre-left opposition of Social Democrats (SPD) and Greens.

"I'm confident that we'll get a broad majority not only in parliament but also in the coalition," he said.

Schaeuble also acknowledged that it was sometimes hard to keep pace with the developments in the sovereign debt crisis and that the conditions made it difficult at times to always come up with the right remedies at the right time.

"It's true that we are running a bit behind the developments at the moment," he said, adding the national governments have a somewhat limited influence on events in the age of globalisation. There is no comprehensive maker of global rules, he said.

That is why the various national interests have to be brought together and that is "an incredibly laborious process."

Separately, a leader of the Greens opposition party rejected the idea of postponing the vote from Sept. 23 to Sept. 29 because the Pope will be visiting Germany. A coalition source said on Thursday parliament might postpone the vote.

"Anyone who thinks they have to postpone the vote on the urgently needed measure to be part of the Pope's fan community has failed to understand how dire the situation is," said Juergen Trittin, the Greens' parliamentary floor leader.

Copyright Reuters, 2011