House may meet early to ratify Greek bailout
Member states urged to move
Parliament may have to reconvene earlier than expected as pressure mounts on EU member states to ratify July’s agreement on a second Greek bailout and the European Financial Stability Fund injection aimed at helping ailing eurozone economies.
The House of Representatives, which has been in summer recess since July 25, is scheduled to hold the first sitting on October 3.
In an informal meeting of EU finance ministers last weekend in Poland, it was agreed that the ratification process in all 17 eurozone countries has to be wrapped up by mid-October at the latest.
However, some countries, particularly Germany and France, are now insisting on an earlier settlement – by the end of this month – of this crucial move aimed at stemming the turmoil battering the major financial markets. Despite various recent appeals by top EU players, including European Commission president José Manuel Barroso and European Central Bank chief Jean Claude Trichet, to ratify the July agreement as soon as possible, only five countries have so far done so.
France, Italy, Spain, Luxembourg and Belgium have all reconvened special sessions of their parliaments during the summer to get the job done, while German MPs are expected to vote on September 29.
The strict timeline being requested by Germany and France may be impossible to achieve as many eurozone countries are caught in a parliamentary lull, with MPs still on vacation.
A government spokesman told The Times the ratification of the July eurozone agreement was “a top priority” for the government, although he admitted no decision had yet been taken to recall MPs from their recess.
However, on Sunday, Prime Minister Lawrence Gonzi hinted at the possibility of reconvening Parliament earlier than scheduled.
During a special summit meeting in Brussels last July, all 17 eurozone members had agreed on a second bailout for Greece worth €110 billion and on boosting the European Financial Stability Mechanism (EFSF). EFSF director general Klaus Regling said this weekend the fund would be able to lend up to €440 billion and take a range of actions like buying bonds on the secondary markets and bailing out banks in countries not receiving financial aid as soon as the eurozone countries endorsed July’s decisions.
He also urged member states to get a move on with the ratification.
However, trouble looms as members of the Slovak coalition government disagreed with the fund and are threatening to block it, while Finland has asked for collateral from the Greek government before signing the deal.
Meanwhile, Greece will today meet IMF and EU officials, it was announced last night.
Malta will not fork out any money towards the second Greek bailout as this will come out of the EFSF. However, the island is guaranteeing €400 million as part of the €440 billion EFSF agreement and it forked out €75 million in bilateral loans for the first Greek bailout in 2010.