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Merkel warns Greek aid plan vital for Europe's future

Merkel warns Greek aid plan vital for Europe's future
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Trying to get the German parliament to back an international rescue plan for debt-stricken Greece, Chancellor Angela Merkel has warned Europe’s future is at stake.

She said the aid package must succeed or the problem would spill over on to other euro zone countries.

“We’re at a fork in the road,” Merkel said in the debate on approving Berlin’s 22 billion euro contribution to the emergency loans for Athens despite hostility among the German public.

She also suggested there should be a kind of bankruptcy protection procedure set up so that in an emergency a country could freeze repayment of it debts while restructuring.

German lawmakers are due to vote on whether to support the Greek rescue package on Friday.

Some have criticised Merkel for delaying the vote for domestic political reasons.

Claudia Roth of the Greens said: “I’m don’t support those who are being anti-Greece in this, because they have not understood that Germany is one of those countries who benefited most from the EU.”

After the vote in parliament, a group of economists plan a legal challenge to Germany’s participation in the Greek bailout.

One of them, Wilhelm Hankel, said it sets a terrible precedent: “It is not just about one country. After Greece there’s Portugal, then there’s Spain, then there’s Ireland. I added up the amount of debts that just this group of countries might need. It is more than two trillion euros. Europe cannot afford this and our taxpayers are not able to pay this.”

On Tuesday Spain had to deny a rumour that it was looking to borrow billions from the EU.

Deputy Prime Minister María Teresa Fernádez de la Vega went on television on Wednesday to stress the country’s stability: “Spain’s public sector debt is 20 percent less than the European average. In Spain we have no fear of this type of contagion. Spain has always met its commitments.”

But the financial markets in Spain and Portugal continued to slump. They are seen as the next two targets for investors testing the European Union’s will and ability to defend weak euro zone economies.