BERLIN (BLOOMBERG) - German Chancellor Angela Merkel is facing a potential revolt in parliament by lawmakers seeking to override her China policy and effectively ban equipment supplier Huawei Technologies from the country's fifth-generation wireless network.
A Bill drafted by lawmakers in Merkel's ruling coalition stipulates that German authorities should be able to exclude "untrustworthy" 5G equipment vendors from "core as well as peripheral networks".
That goes beyond previous calls that sought to ban the Chinese firm from the more sensitive core network alone.
The effort in the Bundestag, Germany's lower house of parliament, is a major challenge to Merkel's attempts at balancing security considerations over 5G with Germany's delicate economic ties with China.
Hawks in her government, including German intelligence agencies and the Interior Ministry, have warned that Huawei's ties to the government in Beijing pose a security risk.
While the draft does not explicitly name Huawei, it is tailored to the Chinese company and comes after months of debate about 5G security. Huawei has repeatedly denied allegations over potential espionage and sabotage.
The draft legislation obtained by Bloomberg News says that security guidelines set out by Merkel's government, which include a certification process and a declaration of trustworthiness, don't go far enough.
The political and legal systems in a vendor's country of origin must also be taken into account, the draft says in a direct allusion to China.
While negotiators haggle over a final draft, the stringent security standards set by lawmakers in Merkel's Christian Democratic Union-led bloc and in the Social Democratic party illustrate the momentum building against the Shenzhen-based technology giant. CDU lawmakers approved a motion at a party convention last month calling for further restrictions.
European Solutions Calling 5G technology Germany's "digital nervous system," lawmakers said that Europe already possessed two companies that represent an alternative to "state subsidised" competitors posing a threat - a reference to Finland's Nokia Oyj and Sweden's Ericsson AB.
"It is thus in Germany's own interest to rely on European solutions with respect to the 5G network expansion and to cultivate European champions," the draft said.
Excluding Huawei from the peripheral network - and not just the more sensitive core - would create headaches for Germany's telecom companies, who have warned that banning the vendor would delay the county's 5G build-out and make it more expensive.
Telefonica SA's German unit, which operates the country's second-largest wireless network, earlier this week said Wednesday it picked Huawei and Nokia to take an equal role in supplying its 5G network upgrade.
The Merkel government had proposed a compromise that imposes partial restrictions that Telecom executives were prepared to accept as long as the Chinese vendor had access to less sensitive parts.
But the lawmakers' proposal would even go beyond a recommendation by Merkel's spy chief, Bruno Kahl, the head of the Federal Intelligence Service. While Huawei is too dependent on the Chinese Communist Party and "can't be fully trusted," Kahl said in October, "there may be areas where a participation doesn't have to be excluded."