German lawmakers agreed to boost the powers of the eurozone bailout fund on Thursday, following an intensive lobbying effort to get members of the ruling coalition government onside.
By a vote of 523 to 85, with three lawmakers abstaining, the German parliament's lower house agreed Thursday to guarantee up to 211 million euros in future loans to the European Financial Stability Facility (EFSF).
That increased Germany's contribution to the bailout fund from a previous commitment to provide up to 123 million euros in loans.
The vote was necessary after European leaders agreed in July to increase the total lending capacity of the bailout fund to 440 billion euros, as well as to expand its ability to buy bonds and offer loans to troubled eurozone governments. Germany became the tenth European nation to approve the new bailout measures.
But despite Berlin's decision to increase its financial commitment to the bailout fund, CTV's Tom Kennedy said many observers are concerned that the EFSF still does not have enough money to stop a default in Greece.
"Even as Germany as approves beefing up the bailout fund, or contributing more money to it, there is a widespread sense that this bailout fund should be three or four times larger than even the expanded version that Germany voted on today," Kennedy reported from Europe on Thursday.
"So there's a lot of worry about what's going to happen down the road. The immediate concern though is simply to make sure that Greece does not default in the next couple of weeks."
While Chancellor Angela Merkel had said in advance of Thursday's vote that the need to approve the beefed-up bailout fund was of the "very, very greatest significance," there were many members of her coalition government who had to be convinced.
Talks went late into the night on Wednesday, with Merkel eventually securing enough votes from her coalition ranks to ensure that the measure could pass without opposition support on Thursday.
Kennedy said markets will scrutinize Thursday's vote closely, trying to ascertain precisely how much struggle Merkel had to go through to get the measure passed.
"If there is that interpretation, the markets may assume that across Europe the support for countries such as Greece, who are having a lot of problems with their debt, is really quite lukewarm. The markets might react against it," Kennedy said.
"So there's going to be a lot of interpretation of how this vote went. Nevertheless, the key is that it passed."
With files from The Associated Press
