German parliament approves expanded EU bailout fund

Germany's parliament has voted by a large majority in favour of supporting a more powerful fund to bail-out troubled Eurozone economies.

Chancellor Angela Merkel received strong support despite criticism of the plan from some of her ruling coalition.

Many Germans are against committing more money to prop up struggling eurozone members such as Greece.

There are protests in Athens where international inspectors have held talks on further bailout funds.

The measure is expected to pass in Germany's upper house of parliament, where it will be put to a vote on Friday.

In the Bundestag, 523 deputies approved the bill to support the expansion of the European Financial Stability Facility (EFSF) - 85 voted against and three abstained in the 620-seat chamber. Nine members were not present.

Dissidents

Some members of Mrs Merkel's coalition had vowed to vote against the bill.

But in the end, 315 deputies voted in favour, meaning that Mrs Merkel did not have to rely on opposition support to get the measure passed.

The outcome of the vote was not in question, however, as the main opposition parties, the SPD and the Greens, indicated they would support the expansion of the fund.

Before the vote, there was intense lobbying by Mrs Merkel's Christian Democrats (CDU) and their coalition allies to pressure the handful of dissidents to get in line.

A reliance on this support would have cast into doubt her ability to get forthcoming votes on both a further bailout for Greece and a permanent successor to the EFSF through the Bundestag.

"The broad majority in parliament clearly shows Germany is committed to the euro and to protecting our currency," said Hermann Groehe, the number two in Ms Merkel's Christian Democrats (CDU) party.

But Frank Schaeffler of the Free Democrats party - a junior coalition member - argued that bailout measures have made Greece's economic situation deteriorate.

"Despite all arguments, the first bailout did not make the situation for Greece better, but worse," Mr Schaeffler said, according to the AP news agency.

"Expanding the fund will make the situation even worse."

Athens blockade

All 17 countries that use the euro must ratify the commitment made in July to expand the powers of the EFSF and boost its bailout guarantees from 440bn euros (£383bn) to 780bn euros.

So far, 10 have approved the measure.

As Europe's largest economy, Germany's commitment to the fund would rise from 123bn euros to 211bn.

That bigger fund is already being dismissed as inadequate in the light of the worsening Greek crisis and the threat of it spreading to other economies.

Inspectors from the "troika" of international creditors supporting Greece - the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) - returned to Athens on Thursday to decide if the government has done enough to warrant another 8bn euros (£6.9bn) of loans.

"The climate was positive and creative after the tough measures that were decided," Greece's finance ministry said in a statement.

Public workers blocked entrances to a number of ministries in Athens, protesting against the deep austerity measures the government has imposed as a condition of the bailout.

"Take your bailout and leave," shouted protesters outside the finance ministry, Reuters news agency reported. They said they wanted to prevent Finance Minister Evangelos Venizelos from meeting the troika officials.

Taxi drivers, hospital workers and other public sector staff were also due to strike on Thursday, angered by the announcement of new austerity measures including pension cuts and a new property tax.

Without the new loans - laid out under the terms of a bailout agreed last year - Greece will soon run out of money.

New taxes have been approved and deeper spending cuts have been promised, but some decisions have been delayed and privatisation is running behind schedule says the BBC's Chris Morris in Athens.

Many people believe that austerity measures are pushing Greece's crippled economy deeper into recession and strangling any chance of growth.