* MPs insist on full debate before 2nd summit mid-week
* Conservative MP: vote to give Merkel stronger backing
* Merkel tells lawmakers: Greek haircut of 50-60 pct, EFSF
leveraged to 1 trillion euros
(Recasts, adds details, opposition response)
By Stephen Brown and Sarah Marsh
BERLIN, Oct 24 German lawmakers flexed their
muscles to secure a full parliamentary vote on Wednesday on euro
zone crisis measures negotiated by Chancellor Angela Merkel and
her euro zone peers, a move senior politicians said would give
Merkel a stronger mandate.
The new vote comes just one month after Germany's Bundestag
(lower of house of parliament) approved greater powers for the
euro zone rescue fund, and should pass without problems, but it
risks delaying Europe's response to the debt crisis at a crucial
Merkel cannot agree to changes to the 440 billion euro
European Financial Stability Facility (EFSF) without approval at
least from the Bundestag's budget committee, as a result of a
constitutional court decision last month.
However, Merkel's Christian Democrats' (CDU) floor leader
Volker Kauder demanded a full debate and vote by the German
Bundestag (lower house of parliament) rather than just a vote by
the 41-member budget committee, which might have been quicker
and less risky while still meeting new rules on consulting MPs.
"On such important questions it's good if parliament gives
the chancellor broad backing for her negotiations," said Kauder
regarding the vote due early on Wednesday, before Merkel returns
to Brussels for a second, decisive euro summit.
Major opposition parties the Social Democrats (SPD) and the
Greens welcomed the vote, and indicated they would back
proposals aimed at countering the debt crisis. But they stopped
short of confirming they would vote "yes", saying they needed to
see documents detailing the proposals first.
With criticism ringing in Germany's ears from the head of
the Eurogroup of single currency members, Jean-Claude Juncker,
about it being slow to make decisions, Merkel met the heads of
the main parties to seek consensus.
Juergen Trittin, parliamentary co-leader of the opposition
Greens, said Merkel had told them the haircut for Greece would
be "above 50 and below 60" percent and that leveraging of the
European Financial Stability Facility (EFSF) could be above 1
Merkel will address parliament before the vote and before
returning to Brussels for what should be a more decisive summit
on boosting the firepower of the EFSF, raising the contribution
of private banks to Greece's rescue, and getting European banks
to increase their own capital to prevent contagion.
Frank-Walter Steinmeier, head of the SPD parliamentary group
criticised the fact that lawmakers were still waiting to see
"We are still not able to talk of concrete texts...
Therefore I am not in a position to talk conclusively or to tell
you how the SPD will vote this week in parliament," he told
The Chancellor's supporters praised her for getting France
to drop demands to use the European Central Bank to leverage
euro crisis funds, and there was broader support also for a
leader often accused of dithering.
"Merkel's Battle for our Euro," was Monday's headline in the
mass-circulation conservative paper Bild, saying she taught
France's Nicolas Sarkozy "that the EFSF rescue fund cannot be
used to print money" to solve the debt crisis.
"The chancellor must stick to her guns -- in the interests
of Germany and of Europe," said the newspaper.
Her conservative bloc's chief whip, Peter Altmaier, said
Sunday's summit "made headway" on all three issues, including
"using the EFSF to avoid having to print money," and it should
now be possible to produce the "comprehensive" crisis response
that Merkel and Sarkozy have promised by the end of this month.
"The chancellor negotiated well in Brussels. She showed
strong leadership," Altmaier told reporters.
"The French president says he sees things just like Angela
and I see that as progress," said the conservative premier of
Hesse state, Volker Bouffier. "Germany and France must take the
same line as the most important two countries."
Sarkozy ceded to German insistence at Sunday's summit that
the ECB should not be used to fight the crisis, which poses an
especially big threat to French banks and France's triple-A
sovereign debt rating.
Instead, an EU paper obtained by Reuters suggested the euro
zone would take up Germany's proposal of boosting the EFSF's
firepower by using it as a form of debt insurance, combined with
seeking help from emerging market economies like China and
Brazil via a special purpose investment vehicle (SPIV) to prop
up the euro zone's secondary bond market.
Merkel's spokesman Steffen Seibert said these two options,
which had no ECB involvement, were the only two left on the
table for leveraging the EFSF and would be discussed by the
summit on Wednesday. He said they were not mutually exclusive.
(Additional reporting by Annika Breidthardt, Gernot Heller and
Oliver Denzel; Writing by Stephen Brown and Alexandra Hudson;
Editing by Catherine Evans)