German opposition warns Merkel on fiscal pact, ESM

BERLIN (Reuters) - Germany's opposition Social Democrats warned Chancellor Angela Merkel's government on Thursday not to take their support for new euro zone crisis-fighting measures for granted, saying more work was needed to convince lawmakers.

Speaking in the Bundestag lower house of parliament at the start of a debate on the bloc's new budget discipline pact and bailout facility, Social Democrat (SPD) parliamentary leader Frank-Walter Steinmeier accused the government of misleading the German people by reversing its position on the bloc's firewall.

Earlier, Finance Minister Wolfgang Schaeuble told the chamber that he would head to a meeting in Copenhagen with a proposal to bolster the firepower of Europe's bailout mechanisms by adding the 500 billion euros in its permanent facility to the 200 billion already disbursed to Greece, Ireland and Portugal.

"There is work to do to convince us," said Steinmeier, who could take on Merkel in next year's federal election despite having lost to her in 2009.

"Herr Kauder, do not presume that approval for the fiscal pact and ESM (European Stability Mechanism) will simply fall into your lap," he added, speaking directly to his counterpart in Merkel's Christian Democrats (CDU), Volker Kauder.

Although the ESM can be approved with a simple parliamentary majority, the fiscal pact requires the support of two-thirds of German lawmakers, leaving Merkel dependent on the opposition to pass it.

Both the SPD and Greens have consistently supported the government's crisis-fighting policies over the past years, but they are adopting a more confrontational approach with two important regional elections looming in May and the federal vote due in 2013.

While they are not expected to torpedo the legislation, they are pushing to delay a vote on the fiscal pact, a German-led initiative that would enshrine strict fiscal rules across 25 EU states.

Merkel's government wants to send a signal to other European states by wrapping up approval of both the ESM and fiscal pact by June. The SPD and Greens was to complement the pact with growth-boosting measures and are talking about delaying the vote until the autumn, when French lawmakers are due to rule on it.

By then, they hope they will have an ally in the Elysee Palace in Paris. Socialist Francois Hollande, favoured to defeat conservative President Nicolas Sarkozy in a two-round French election in April and May, also wants changes to the pact to promote growth in recession-hit euro states like Greece and Portugal.

Steinmeier said Germany had become an "island" of prosperity in Europe and demanded more measures for growth and job-creation to balance out austerity.

"I would love to share your optimism but look at the growth figures," he said, addressing Schaeuble. "The red numbers of other states today are our problem of tomorrow. It cannot be that everyone around us is in difficulty but we keep doing well."

(Writing by Stephen Brown and Noah Barkin)