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German State PM Assures 'Yes' to Greek Bailout

Monday, 3 May 2010 | 8:00 AM ET

Hesse Prime Minister Roland Koch said Monday he sees no danger that the Greek bailout could be stopped by constitutional challenge.

Greek Labor Unions Strike
AP
Greek Labor Unions Strike

"Looking to the guidelines our constitutional court gave us we can be very confident that that legislation we are talking about in these days is under the rules of the constitutional court," Koch told CNBC.

"It is no bailout in the basic and fundamental sense", he said. "It is assistance to a country in trouble."

And such "assistance" was covered and called for by the European treaties, he noted.

Koch's evaluation of the Greek rescue package was sobering.

"My assumption is that there is a fair chance for Greece to survive in this crisis", he said. "It is not more than a chance, but it is a chance and that's better than all the alternatives we have."

Koch, who as PM of one of the German states (Länder), will be asked to vote on Friday on the Greek rescue package hammered out over the weekend by the Eurogroup in Brussels, stressed that Europe would have to learn "never to be in such a situation again."

And for that, Europe would have to look to amending its treaties.

Koch said that both houses of Germany's federal parliament (the Bundestag and the Bundesrat) will have voted in favor of the legislation for the Greek bailout plan by Friday noon "with a broad majority."

Asked what needed to be done to prevent future crises of this kind, he said, "(w)e have to have stricter regulation for events like that and chances to react earlier .... because a currency that is always discussed under the scheme 'how many nations are in and who is going to speculated out?' is by definition a weak currency."

But he denied there was any existential danger for the euro.

"There is no danger, no risk for the euro at all," Koch insisted. "But how strong it is going to be, how well accepted and one of the leading currencies of the world and one of the pillars of the world economic system that is not sure for the future."

Germany Will Say 'Yes' to Bailout: Koch
Roland Koch, prime minister of Hesse for the Government of State of Hesse, assured CNBC that Germany would approve funding for the Greek bailout package, but also said the EU needs stricter regulation to avoid such situations.

He also fired a warning shot across the bow to financial market speculators who were tempted to try and shoot down other euro zone countries such as Portugal or Spain.

"They should understand that we will deal with this problem (Greece) now ... and that speculating too high is a big risk in these nations."

Koch, who is also one of the leaders of Angela Merkel’s Christian Democtraic Party and often touted as one of her possible successors both as head of the party and as chancellor, stressed once again, "(w)e don’t want to destabilize the euro ... But the euro has to be the responsibility of independent nations and none of the these nations has the right to destabilise other nations by asking for assistance and help in a situation where first of all they themselves are asked they themselves should handle the situation."

He also warned, "(w)e don’t want to have at the end the responsibility as Germans with our economic strength for economic trouble in any countries that are affiliated with the euro zone and the euro. Our share is always 30 percent of all. That makes us careful."

Contact Europe: Economy

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