Under the terms of the agreement Greece will get €44bn in critical rescue loans to avert bankruptcy and exit from eurozone
German lawmakers approved latest aid package for Greece by a large majority on Friday , but the voting also showed growing displeasure with the impact on German taxpayers in the run-up to elections next year.
Chancellor Angela Merkel failed to secure an absolute majority from her centre-right coalition after 23 MPs rebelled, leaving her relying on the votes of the main opposition Social Democrats (SPD) and Greens. Of 584 deputies present in the chamber, 473 voted for the bailout with 100 against.
Under the agreement, reached by European finance ministers this week, Greece will be given two more years to reach its budget goals. It paves the way for Greece to receive €44bn (£35.6bn) in critical rescue loans, without which the country would face bankruptcy and a possible exit from the single currency zone.
The package, which aims to cut the Greek debt load to 124% of national output by 2020, has fuelled speculation among German lawmakers and media that eurozone governments will eventually have to write off much of the Greek debt they hold. German government, as the biggest contributor, acknowledged for the first time this week that the bailout will mean lost federal revenues, starting with a €730m shortfall next year.
During the debate, finance minister Wolfgang Schäuble defended the aid package and said that speculation about a possible writedown could undermine the Greek government's reform drive. "If we say the debts will be written off (Greece's) willingness to make savings is correspondingly weakened. Such false speculation does not solve the problems," he said. "A Greek bankruptcy could lead to the break-up of the eurozone."
Frank-Walter Steinmeier, SPD parliamentary leader and their candidate for chancellor, said the deal on the table "is not a sustainable solution for Greece" and argued that the government had merely "bought time" above all to avoid addressing "unpleasant truths." However, he said his party would back the deal because "we cannot leave the Greeks in the lurch."
Finland and the Netherlands are two other eurozone countries which must give parliamentary consent before the funds for Greece are released. According to think tank Open Europe the French parliament will also need to approve the deal but this is likely to be done along with the 2013 budget vote, this means it is very likely to pass. There are also reports that Slovenia will need to accept the deal by 13 December.
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