9/29/11

German parliament approves expanded EU bailout fund


A large majority in the German parliament has approved expanded powers for the EU's main bailout fund.

The vote was seen as a test of Chancellor Angela Merkel's authority, as some in her coalition vowed to oppose the bill.

Many Germans are against committing more money to prop up struggling eurozone members such as Greece.

There are protests in Athens where international inspectors are due for talks on further bailout funds.

The measure is expected to pass in Germany's upper house of parliament, where it will be put to a vote on Friday.

Five-hundred and twenty-three deputies in the Bundestag approved the bill, 85 voted against and three abstained in the 620-seat chamber. Nine members were not present.
Dissidents

The outcome of the vote was not in question, as the main opposition parties, the SPD and the Greens, indicated they would support the expansion of the fund.

Before the vote, there was intense lobbying by Mrs Merkel's Christian Democrats (CDU) and their coalition allies to pressure the handful of dissidents to get in line.

Reuters news agencies reports that 315 coalition deputies voted in favour, meaning Mrs Merkel did not need to rely on the opposition support.

A reliance on this support would have cast into doubt her ability to get forthcoming votes on a further bailout for Greece and a permanent successor to the main EU bailout fund, the European Financial Stability Facility (EFSF), through the Bundestag.

All 17 countries that use the euro must ratify the commitment to expand the powers of the EFSF and boost its bailout guarantees to 440bn euros (£383bn).

So far, 10 have approved the measure.

As Europe's largest economy, Germany's commitment to the fund would rise from 123bn euros to 211bn.



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