Angela Merkel wants quick passage of EFSF changes and once in place wants to make bailouts without further parliamentary approval. This sounds much like the disastrous open-ended slush-fund bailout proposals we saw in the US at the height of the crisis. Merkel warns that parliamentary approval would slow things down. What's wrong with that? Indeed it might be better if things slowed to a halt, otherwise taxpayers are going to get screwed again. Der Spiegel does not see it that way. Please consider Parliamentary Influence over Euro Bailouts 'Naive
The German parliament is calling for increased authority in euro-zone bailout packages established by the EFSF backstop fund. But that could ultimately slow things down to a dangerous degree, economists warn. German commentators on Thursday make a plea for democracy. Germany's parliament feels ignored. Until now, the Bundestag has had very little influence on decisions made by Chancellor Angela Merkel and her government regarding bailout packages for heavily indebted euro-zone states. But with expanded powers having been granted to the euro backstop fund -- known as the European Financial Security Facility or EFSF -- at a European Union summit in July, German parliamentarians also want a greater say. On Wednesday, Merkel's cabinet agreed on the law necessary to expand the EFSF , a change which must be agreed to by all euro-zone governments. But the question as to how much influence the German Bundestag might ultimately have over EFSF bailouts was left unanswered, pending ongoing negotiations. Given the threat of a conservative revolt , Merkel has proven open to a compromise. Too many parliamentary defections from her Christian Democrats (CDU) and its Bavarian sister party, the Christian Social Union, in the late September vote could topple her government. But on Thursday, several struck a more cautionary note, including German Finance Minister Wolfgang Schäuble, a leading member of the CDU. The EFSF , he said, must be able to "act quickly." As such, he said that the parliament must act responsibly with any influence it is granted. Several economists went even further. "In a situation of market panic, the EFSF has to act quickly," Holger Schmieding, chief economist of Berenberg Bank, told the Financial Times Deutschland. "It could happen overnight or on a weekend."
German taxpayer liability in the new ESFS proposal is €211 billion, nearly the national budget. And Merkel wants that at her disposal with no interference from parliament.
Quite frankly it is nuts. Imagine Obama asking for a $1 trillion slush fund at his disposal to bail out other countries. The whole country would think he was mad.
