Germany's ruling coalition clashed with opposition parties on Tuesday over the government pledge to guarantee more than 1 trillion euros ($1,359 billion) in private savings as it struggles to tackle the global financial crisis.
A number of opposition lawmakers, including Otto Fricke - a member of the Free Democrats (FDP) and chairman of the lower house budget committee - said German law says the government can only make such guarantees with parliamentary approval.
The government is calling the pledge "a political declaration" which strengthens existing protection without the need to be enshrined in law and approved by parliament. "If the government is serious then it must also give the so-called guarantee a serious framework," Fricke said, adding that this could include a supplementary budget.
The criticism of the government's approach partly reflects the ambiguity of the savings pledge, which was made at a hastily arranged news conference with Chancellor Angela Merkel and Finance Minister Peer Steinbrueck on Sunday in Berlin. The pledge spurred similar action by Austria and Denmark.
The German Finance Ministry initially estimated the guarantee covered around 563 billion euros ($764.8 billion) in private savings accounts, but has since said that additional private money in checking and time deposit accounts would bring the total to over 1 trillion euros. Figures from the German banks association (BDB) suggest it could be even higher, around 1.6 trillion.
"The Bundestag (lower house) must really give its support," Christine Scheel, deputy head of the Greens parliamentary group, said of the savings guarantee. If the government ever had to follow through on its pledge, a supplementary budget would be necessary, she said. Dirk Schumacher, an economist at Goldman Sachs in Frankfurt, agreed that the government would have to pass legislation if it ever needed to fulfil the guarantee.
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