Merkel wins Parliament battle; pushes through bailout funds
Germany's approval of the beefed-up bailout fund with much stronger support than expected in the Bundestag (lower house of parliament) provoked a sigh of relief in markets worried about Berlin's commitment to resolving the debt crisis.
"This is a strong statement of support for Angela Merkel. It is an excellent day," said her parliamentary leader Peter Altmaier. He had been in charge of persuading rebels MPs who worried about throwing good money after bad with successive bailouts of Greece and other highly-indebted states.
Support from the opposition meant there had been no doubt that Germany would okay new powers for the European Financial Stability Facility (EFSF), which some countries like Finland have ratified but others, including Slovakia, are dragging their feet on.
After some intensive arm-twisting among the ranks of Merkel's center-right coalition, 315 coalition lawmakers voted in favor – m 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.
Merkel was successful in persuading MPs that taxpayers' money would not be wasted by supporting bailout measures – but she could not rule out that the money might be written off if, as financial markets increasingly fear, Greece defaults.
Germany will shoulder up to 211 billion euros of the fund's 440 billion euros worth of guarantees, but the critics in the Bundestag fear it is already clear this will not be enough and taxpayers will be asked for more.
That impression was reinforced by talk at the International Monetary Fund last weekend of the need to beef up the EFSF even more – on top of the extra powers decided by European leaders in July – by leveraging its capital and bring forward the permanent scheme supposed to replace it in mid-2013.
Finance Minister Wolfgang Schaeuble told the Bundestag in a fiery debate before the vote it was "indecent" to speculate at this point about Germany being asked to contribute more to the EFSF.
"We're borrowing money from our children ... and it is money that we don't have," said one rebel in Merkel's Christian Democratic Union (CDU), Klaus-Peter Willsch.
Merkel has often been accused in Europe and at home of dithering on the euro crisis, but today's outcome may improve the view of her crisis management and even improve her hopes of taking the conservative bloc she has led for 11 years into the next elections in 2013.
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