German parliament approves support package

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The German parliament on Wednesday has approved again the widening of the European Financial Stability Facility (EFSF) to solve the economic problems of EU members.

The German parliament on Wednesday has approved again the widening of the European Financial Stability Facility (EFSF) to solve the economic problems of EU members.

The European Union formed the EFSF in May 2010 to support its economically weak members such as Ireland and Greece. The German parliament has voted again for an increase of the fund's financial guarantees to 780 billion euros from 440 billion, while Germany's share in it will grow to 211 billion euros from 123 billion euros.

The approval gives German Chancellor Angela Merkel carte blanche to discuss the widening at an upcoming debt crisis summit in Brussels. European leaders are gathering for the fourteenth crisis summit in 21 months to discuss the Greek debt relief program, recapitalization of banks and the enlargement of the rescue fund.

At an EU summit in July 2011, leaders of the eurozone states decided to enhance the powers of the EFSF by allowing it to buy bonds on the secondary market, recapitalize banks and raise guarantee commitments to 440 billion euros.

 

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