Has German Opposition Joined the Pro-Growth Chorus?
German lawmakers likely will delay a vote on the euro zone's fiscal compact on budget discipline because the country's main opposition party wants to insert growth-focused measures into the pact, a coalition source told CNBC.
German lawmakers likely will not vote until at least the middle of June on the fiscal compact on budget discipline, as well as on the euro zone's permanent bailout fund, known as the European Stability Mechanism \(ESM\), the source confirmed to CNBC.
The delay has come about Germany's Social Democratic Party wants some kind of agreement on growth-related measures put into the fiscal compact, the source said. A vote was originally due to take place on May 25.
Although the ESM can be approved with a simple parliamentary majority, the fiscal pact requires the support of two-thirds of German lawmakers, leaving German Chancellor Angela Merkel dependent on the opposition to pass it.
The fiscal compact on budget discipline is an agreement signed by European Union member states in March that requires members to bring their government budgets into balance or in surplus.
Merkel has steadfastly insisted that any euro zone recovery from its lingering debt crisis would come as a result of austerity measures rather than government spending measures. However, others throughout Europe have become increasingly insistent on the need to balance austerity with policy steps focused on growth.
Last weekend, results of national elections in Greece and France reflected widespread public discontent with austerity.
Merkel said on Monday the pact would not be up for renegotiation, but French president-elect Francois Hollande has said he wants a renegotiation of the deal agreed by European leaders in March.