German parliament approves expanded rescue fund
Updated: 2011-09-29 19:48
BERLIN - Germany's lower house of parliament ratified an expansion of the eurozone's multi-billion bailout fund on Thursday, as the deepening eurozone debt crisis increasingly raised worries in global markets.
The Bundestag, or the lower house of parliament, voted 523-85 with 3 abstentions, giving the green light on boosting the 440-billion-euro (599-billion-dollar) rescue package, or the European Financial Stability Facility (EFSF).
With more flexibility on operation, the new version of EFSF is allowed to buy sovereign bonds of heavily indebted eurozone nations on the secondary market and loan money to countries facing risks of debt crisis as a precautionary measure.
As Europe's biggest economy, Germany has to increase its guarantees from 123 billion euros to 211 billion under the bill, the largest among eurozone states, which accounted for nearly half of the total fund.
The vote in parliament, although the outcome of approval is widely expected, is viewed as "a crucial test" for Chancellor Angela Merkel by German media, as some lawmakers with Merkel's central-right coalition parties vowed to vote against or abstain.
If Merkel fails to get enough votes from the coalition camp, which means that 19 or more of 330 coalition lawmakers did not back the bill, the chancellor would face a crisis of her own -- a crisis of confidence, as more German people and media would question her competence of leading the country to coup with the current eurozone debt troubles. The Bundestag has 620 seats in total.
The details about Thursday's vote are to be known in hours.
Germany is the 11th of the 17 eurozone nations who approved the boosted rescue fund. Finland's parliament endorsed similar bill on Wednesday.