Merkel faces tough vote on Greece in German House

Written by Reuters | Berlin/Oslo/Beijing | Updated: Feb 28 2012, 06:34am hrs
German parliament will almost certainly endorse a Greek bailout on Monday despite growing pressure on chancellor Angela Merkel to meet domestic calls to stop throwing money down this crazy path.

The worlds 20 leading economies, the G20, piled pressure on Germany at the weekend to drop its opposition to a bigger European bailout fund, telling Europe it must put up extra money if it wanted more help from other countries.

But Merkel, leader of Europes paymaster, first faces a difficult vote in parliament, which may force her to rely on opposition votes to approve the 130-billion-euro ($175 billion) rescue programme for Greece, its second since 2010.

Billions for Greece Stop! Germanys top-selling newspaper Bild splashed across its front page.

Dont go any further along this crazy path, the newspaper appealed, printing comments by leading economists as to why a default and temporary exit from the euro zone would be the better option for Greece.

In Mondays vote, Merkel may be forced to rely on opposition support to overcome a determined band of rebels in her own coalition.

At least a dozen members of parliament in her centre-right coalition said they would vote against the rescue package. If the number of rebels rises to at least 20, the measure will pass only with opposition support.

That would be a humiliating defeat for Merkel, which analysts and opposition leaders said would raise doubts about whether her coalition could survive as well as her ability to cope with demands for an enlarged permanent bailout fund.

Merkels allies are confident they have enough votes for a majority. The opposition Social Democrats and Greens have said they will vote for it.

Merkel needs 311 votes to reach a majority in the 620-member parliament. Her government commands 330 seats.

However, in a September 27 vote, 15 deputies in her coalition broke ranks, leaving the governing coalition with the narrow majority of 315 seats on that occasion.

An opinion poll published in a Sunday newspaper found 62% of Germans against the rescue package while 33% were in favour. In a similar poll in September, 53% were opposed and 43% in favour.

Interior minister Hans-Peter Friedrich openly called on Greece to leave the euro zone, saying its chances of recovery would be greater outside.

Quite clearly the mood in Germany is turning against further rescue for Greece, Klaus-Peter Willsch, a leading dissident on Greek aid in Merkels Christian Democrats (CDU), said in an interview with Reuters on Sunday.

But thats not surprising. This is all deja vu for the public. Weve been promised all kinds of things that arent fulfilled and then a few months later theres the need for another rescue package. The publics faith is fading fast.

Germans, who are making the largest financial contribution to the euro zone bailout to Athens, are growing impatient with what finance minister Wolfgang Schaeuble described as a bottomless pit in Greece.

At the same time, there is a growing awareness in Germany that its own prosperity is at risk as the debt crisis sucks in more countries and stifles demand within the currency bloc for German exports.

German criticism of Greece has reopened wounds dating from World War II. Protesters in Athens burned a German flag earlier this month while Greek newspapers have portrayed Merkel and Schaeuble in Nazi uniform.

Chinese firm to buy AES wind business in US

State Grid Corp of China held talks with US power firm AES Corp over taking a controlling stake in its US wind power business, three sources said, as Chinas cash-flush state-owned power companies go on an overseas buying spree.

It wasnt clear how much State Grid would pay for the assets or how the business would be structured after the sale. Based on analysts estimates, the assets could be worth around $1.65 billion.

The deal involves wind power assets with capacity of around 1,100 megawatts (MW) and would give State Grid roughly 80% stake in AESs US wind power business, sources with direct knowledge of the matter told Reuters. It would be State Grids first foray into the United States.

The sources declined to be named as they were not authorised to speak with the media.

Chinas cashed up state power groups have been scooping up bargains, with dominant power distributor State Grid establishing a presence in the Philippines, Brazil and Portugal.

The companys president Liu Zhenya had visited the United States earlier this month as part of a delegation accompanying Chinese vice-president Xi Jinping. Two of the sources said the companies signed an agreement during that trip, but the third source said a deal is still at the negotiation stage.

The specific details of the American wind power project are still under negotiation, said that source, who is familiar with the talks.

AES Wind Generation, a wholly-owned part of AES Corp, operates more than 1,800 MW of wind power generation capacity in the United States, China and Europe. Of that, nearly 1,346 MW is in the United States, according to the companys website.

Repsol, Sinopec strike big oil find offshore Brazil

Spains Repsol and Chinas Sinopec have made an oil discovery offshore Brazil that could be one of the biggest so far in the area and that boosted confidence that Angolas deepwater reserves may be abundant too.

The firms Brazilian joint venture has struck oil in the Campos Basin off the coast of the Latin American country, it said on Monday.

The well ... drilled into a hydrocarbons column of 500 metres, one of the thickest discovered in Brazil to date, Repsol said in a statement.

Brazil is at the centre of an oil boom, with majors flocking to Latin Americas largest economy and its hydrocarbon reserves, considered among the biggest in the world.

Repsol did not provide an estimate for the size of the find, but one of its partners, Norways Statoil, said it was a high-impact one: it could hold more than 250 million barrels of oil equivalent (boe) or provide 100 million boe net to Statoil.

An analyst said the discovery could be even bigger and had the potential to be an elephant compared with a recent discovery made by Petrobras in the same area. Using the same ratio between the oil column size and the recoverable recourses, the estimated size of (the find) is in excess of 500 million boe, Teodor Sveen Nilsen, an analyst at Oslo-based firm Swedbank First Securities, wrote in a note to clients.