Europe’s rescue fund cleared a major hurdle yesterday, when German lawmakers voted overwhelmingly to beef it up, relieving markets as attention turned to a key international audit of debt-mired Greece.
German deputies voted by 523 to 85 with three abstentions to expand the size and scope of the European Financial Stability Facility (EFSF), with German Chancellor Angela Merkel surviving a test of her authority amid a backbench rebellion.
Volatile markets largely took the news in their stride, as a positive result was widely anticipated, but the euro spiked up slightly on the news that Merkel had won her own majority, with only 15 MPs from her coalition defying her.
Germany thus became the 11th of 17 eurozone states to agree to boost the 440 billion euro (US$590 billion) EFSF and hand it new powers, for example to buy bonds of struggling nations.
The expansion also boosts the contribution of Germany, Europe’s paymaster, to 211 billion euros, though German Finance Minister Wolfgang Schaeuble insisted there would be no more cash flowing from Berlin.
“We have agreed German guarantees of 211 billion euros for the EFSF. More is not necessary,” he said.
Despite fevered speculation in the run-up to the vote, Merkel did not have to rely on the opposition to pass the bill, averting a political crisis that some feared could spark new elections in Europe’s top economy.
“This is a clear show of support for the common currency,” Holger Schmieding of Berenberg Bank said.
“It is good that the Bundestag voted for an expanded EFSF rescue fund with such a large majority. Europe and half the world were looking to Germany,” Merkel’s spokesman Steffen Seibert said on microblogging site Twitter.
German dailies had dubbed yesterday “decision day for the euro” and “a fateful day” for Merkel, amid hopes Berlin would help defuse a eurozone crisis that US President Barack Obama has said is “scaring the world.”
German Foreign Minister Guido Westerwelle said that with the vote, “the signal to our European partners is that you can rely on Germany.”
“Today’s decision is an important contribution to solving the debt crisis and to stabilizing the euro,” Westerwelle said.
The European Commission also hailed the result with a spokesman for Economic and Monetary Affairs Commissioner Olli Rehn saying: “We welcome this new approval of the EFSF.”
Meanwhile in Athens, auditors from the EU, the European Central Bank and the IMF were meeting officials to decide whether to disburse 8 billion euros of crucial aid for Greece.
Eurozone finance ministers will likely decide on Oct. 13 “whether the conditions are met for the next tranche to be disbursed,” Schaeuble said in the parliamentary debate.
“I cannot say what this decision will be, I cannot anticipate the conclusions of the troika,” he added, referring to the international auditors.
As staff associations occupied nearly a dozen ministry buildings in protest at the crippling austerity measures needed to tackle the country’s debt pile, Athens says it has enough cash to pay the bills until the end of next month.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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