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German parliament approves 500B euro financial bailout
(Xinhua)
Updated: 2008-10-17 21:13 Merkel has stressed that there will be "no payment without a trade-off." Banks seeking capital help will have to comply with government-set conditions that could include limits on managers' pay and directions on lending policy. Before the lower house vote, leaders of the opposition Greens and Left Party said their members would cast their ballots against the package, while the pro-business Free Democrats said they would join Merkel's governing coalition of Christian Democrats and Social Democrats in approving it. President Horst Koehler was to formally sign it into law by the end of the day, and Merkel's Cabinet has already arranged a special meeting for Monday to discuss implementing the plan. The package comes a day after Germany, Europe's biggest economy, lowered its GDP growth estimate for 2009 by a full percentage point to 0.2 percent because of uncertainty in the world financial systems. In the past week, Germany's DAX index of the country's 30 biggest companies has pitched through positive and negative closings, largely following Wall Street's lead. It closed down nearly 5 percent on Thursday, though was up more than 2 percent early Friday afternoon. The swings were primarily caused by financial stocks, as investors tried to assess what impact the rescue package might have and how large the economic fallout from the credit crisis would be. Speaking on the floor of the Frankfurt stock exchange Friday, Robert Halver, the head of market research for Baader Wertpapierhandelsbank AG, was skeptical about the rescue package. He said most private banks in Germany will probably carefully consider taking on the government's funds because it will mean more oversight. "Every bank will consider three or four times before accepting this involvement," he said.
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