18 August 2015

When it comes to issues around the bailouts we often hear the term “national procedures” but it’s not always entirely clear who or what this involves. It refers to the approval of member states of what is agreed at the Eurogroup with regards to the bailouts, however, different countries have different procedures. The large majority just need the government to sign off and so with the finance minister already having agreed to the deal at the Eurogroup, this is just a formality. However, at least five states need some level of parliamentary approval/involvement – Austria, Germany, Finland, Estonia and Portugal.

Spain will hold a parliamentary vote and debate on the bailout today, though it is not technically required to do so. Similarly, Latvia, though not required, had the EU affairs committee of its Parliament approve the bailout yesterday. Slovakia may decide to hold a vote but is again not required to.

Germany

The Bundestag will hold a debate and vote on the Greek bailout from 8am UK time on Wednesday. Given the support from the junior coalition partner, the SPD, the package will undoubtedly pass. However, there are rumours of a significant rebellion within German Chancellor Angela Merkel’s CDU/CSU party. German daily Bild quotes members of the CDU/CSU faction as saying, “70 No votes are annoying, over 80 are bad – more than 100 a catastrophe …”

As the tweet above shows, the rebellions have been steadily increasing. It is entirely possible it could rise again this time around. Somewhere between 60 and 100 MPs rebelling seems possible. That said, the party whips have been trying to get people in line, although not always with much success. There have been reports that the tactics, especially from Chief Whip Volker Kauder, have been heavy handed and may have backfired. However, the fact that German Finance Minister Wolfgang Schäuble has fallen into line and backed the deal will help – if the terms are seen as good enough for him then many of the harder line MPs may be satisfied.

The level of ambiguity in this deal may also be a problem. Despite Merkel’s protestation that she has “no doubt” that the IMF will be involved, it is not as of yet and it has set quite a high bar to involvement in terms of debt relief. Many German MPs will have to consider whether they are willing to back this bailout without the IMF or if they are willing to give the necessary debt relief to get the IMF on board.

Austria

According to DPA, which has a useful rundown of all this, the Austrian parliament only needs to provide approval via a subcommittee which is scheduled to meet today. However, it remains possible that the entire parliament is called in, though as of yet, there is nothing scheduled in the calendar. Despite some opposition, approval should be relatively painless here.

Finland

The Finnish parliament already gave its approval when a special parliamentary committee gave Finnish Finance Minister Alex Stubb a mandate to approve the bailout ahead of the meeting of Eurozone finance ministers on Friday.

Portugal

The Portuguese parliament is due to vote on the package though no date has yet been set. It will have to be before Thursday. Approval looks likely, the government is keen to get this saga over with and refocus the Eurozone as a bloc on getting back to growth. Furthermore, unlike their Spanish counterparts they don’t have a rising populist party to deal with.

Estonia

An extraordinary parliamentary session has been called for today starting at noon. As with the other Baltic countries which underwent their own significant austerity and internal devaluation programme, sympathy for Greece in Estonia has been limited. However, the reform programme is likely to be seen as sufficient for approval.

The Netherlands

Is not legally required to hold a vote but may well do so due to the level of opposition to the bailouts. The exact format of the vote remains unclear but it will likely take place on Wednesday around noon. The government will likely submit a motion to support the bailout, which would likely be approved. It is also possible that the opposition PVV, led by Geert Wilders, will submit a motion to reject the bailout and/or a no-confidence motion in the government, both of which would likely be rejected. If the parliament did decide not to back the bailout it would be politically toxic for the government to push ahead anyway, so the vote takes on more importance than one might think.