The German parliament passed an initiative for a more powerful bail-out fund for the struggling Eurozone nations, despite much talk of dissension from Angela Merkel’s own ranks.
Coalition comes through
Many German voters are against pumping more money into floundering eurozone economies such as Greece, but the measure is expected to also pass in the German parliament’s upper house.
The vote will be held on Friday.
In the Bundestag, the house which already passed the bill, 523 deputies approved the European Financial Stability Facility (EFSF) measure while 85 voted against. Three abstained, and nine members were not present.
In the weeks running up to the vote, members of Merkel’s centre-right coalition vowed to stand against expansion of the bailout fund, but it was predicted to pass because of the opposition votes.
However on the day of the vote, Merkel was able to get 315 of her coalition’s votes and did not have to rely on opposition support.
‘Committed to the euro’
The outcome poses good omens for Merkel, as dissidence from her own party was spurring doubts about her leadership abilities and the likelihood of getting further measures passed in the future.
“The broad majority in parliament clearly shows Germany is committed to the euro and to protecting our currency,” said Hermann Groehe of Merkel’s Christian Democrats (CDU) party.
But arguments from the minority in parliament say that bailout measures are not helping Greece, and that another bailout is pumping money away from taxpayers rather than into a stronger euro.
“Despite all arguments, the first bailout did not make the situation for Greece better, but worse,” said Frank Schaeffler of the Free Democrats party.
“Expanding the fund will make the situation even worse.”
The German vote was of great importance to the EFSF, as Europe’s largest economy will be almost doubling it commitment to the fund, from 123bn euros to 211bn euros.
Still, all 17 countries that have adopted the euro was their currency must pass the measure to expand powers of the EFSF.
The measure will boost its bailout guarantees from 440bn euros to 780bn euros.