German MPs urged to back Greek aid ahead of vote

Germany's finance minister on Friday hailed the efforts of Greece to turn around its embattled economy, as he urged deputies to approve billions of euros in international aid for the debt-wrecked country. Speaking ahead of a vote in the Bundestag lower house of parliament, Wolfgang Schaeuble said: "There have been initial successes but there is still a long road ahead." "All international observers agree the new Greek government has shown great commitment to implementing the agreed reforms in a consistent way and that a lot of progress has been made," said Schaeuble. The parliament was expected to approve the release of 43.7 billion euros ($56.9 billion) in emergency aid for Greece agreed by eurozone finance ministers earlier in the week, after opposition parties pledged their support. The vote was expected to take place around 11:00am local time (10000 GMT). Schaeuble compared the situation Greece now finds itself in to the challenge faced by the then West Germany to integrate the weaker economy of East Germany after reunification in 1990. He acknowledged that propping up Greece would be expensive but stressed that much depended on deputies' accord. "Without our support, it would not only be the future of Greece at stake, but also the future of the eurozone as a whole," he said. "The potential impact of a Greek default on other eurozone countries and the eurozone would be serious. The consequences are not foreseeable. We cannot start a process that could end in the break-up of the entire eurozone." Political debate in Germany has raged since finance ministers struck the deal on Tuesday over whether taxpayers will eventually have to accept losses on Berlin's holdings of Greek debt. Many in Germany consider that a so-called haircut -- or writedown of Greek debt holdings -- by public institutions like other eurozone governments and the European Central Bank is inevitable. Opposition politicians have accused Merkel of playing down the need for a haircut on Greece, fearful of the impact on her chances in federal elections expected to take place on September 22, 2013. But Schaeuble insisted that talk of a haircut would reduce the pressure on Greece to reform. Merkel's challenger next year, former finance minister Peer Steinbrueck said ahead of the vote that his opposition Social Democrats would vote in favour "not to support the government but out of political responsibility for Europe."