Merkel fails to get support from SPD or Greens

GERMANY’S FISCAL treaty ratification remained in limbo yesterday after Chancellor Angela Merkel failed to win over the necessary opposition party support.

The Social Democrats (SPD) and Green Party said yesterday they would withhold their backing for the treaty until the German leader agreed to euro zone growth measures – financed by a tax on financial transactions.

“It’s the government’s job now to agree to a growth package that attracts majorities around Europe,” said SPD leader Sigmar Gabriel.

After dismissing government plans for a Bundestag vote today, SPD and Green leaders held inconclusive talks yesterday with Dr Merkel and agreed to meet again on June 13th.

Ratifying the treaty in parliament involves a change to Germany’s post-war Basic Law and thus the support of a two-thirds majority of MPs.

Mr Gabriel, relishing his leverage over the German leader, called yesterday’s inconclusive talks a “lap victory en route for more growth and jobs in Europe”.

French Socialist president François Hollande’s election-winning growth strategy prompted his German SPD allies to lean on the German leader.

They knew Dr Merkel had hoped to link the fiscal treaty vote, which enjoys wide cross-party support, to the ballot on the less popular ESM bailout fund. Alone, an ESM vote would be likely to see a backbench revolt by government MPs.

As the ESM has to be ratified before it goes to work in July, opposition parties have made their support conditional on Berlin backing growth spending.

“This spending has to be financed by a tax on financial transactions,” said Jürgen Trittin, parliamentary co-leader of the Green Party.

Government officials said progress had been made in talks yesterday and they were confident differences could be clarified soon, allowing a joint fiscal treaty-ESM vote before the parliamentary summer break.

For all their support for Mr Hollande, Germany’s opposition parties do not agree with the French leader on all policies, in particular his call for jointly issued eurobonds.

“They are nothing more than mutually guaranteed debts, that won’t win through on a universal level,” said Mr Gabriel yesterday.

The Green Party is not strictly opposed to eurobonds, but says it would require treaty change, which they view as an impossible task in the fast-moving euro zone crisis.

Complicating Germany’s fiscal treaty ratification still further is a ruling due from the constitutional court on June 19th.

This follows a complaint by the Green Party that the government is withholding from parliament information on reform in the euro zone.