29 Sep 2011

Germans back Merkel euro bailout fund

Germany’s parliament backs Chancellor Angela Merkel’s bill to extend the euro bailout scheme in one of the toughest challenges yet to her authority.

The Bundestag overwhelmingly approved new powers and additional money for the euro zone’s crisis fund, the European Financial Stability Facility (EFSF).

After some intensive arm-twisting among the ranks of Merkel’s centre-right coalition, 315 coalition MPs voted in favour, just over the 311 Merkel needed to show she can pass crucial euro zone policy without opposition help.

“For Merkel this is without doubt a great success and it will be a great relief for her party,” political scientist and Merkel biographer Gerd Langguth said.

Relying on the pro-euro Social Democrats (SPD) and Greens would have seriously undermined Merkel’s authority and ability to pilot fresh measures to combat the euro crisis.

In total 523 lawmakers voted for the bill, 85 against and there were only three abstentions.


As Channel 4 News Economics Editor Faisal Islam reported, the vote prompted some members of the ruling coalition to adopt an increasingly strident position on the EFSF.

Meanwhile, financial experts with Greece’s economic fate in their hands are back in Athens to decide whether the country qualifies for another slice of bailout money to avert bankruptcy.

The team, known as the “troika”, wants hard evidence that Greek austerity measures designed to revive the economy are in place before handing over the latest £7bn instalment of a £95bn bailout package approved for Greece by the 17 eurozone countries.

Agreement on the latest sum is almost certain in the face of jittery markets, which would react badly if Greece was allowed to default on its debts.