29 Sep 2011

Germany's leader faces big test in bailout vote

9:07 pm on 29 September 2011

German Chancellor Angela Merkel faces a major test of her authority as MPs vote on Thursday whether to approve new powers for the European Union's main bailout fund.

Some of her coalition oppose committing more money to propping up struggling eurozone members such as Greece, the BBC reports.

In Athens, protesting civil servants have blocked entrances to ministries. The demonstrations come as international inspectors resume talks with Greece to decide whether it has done enough to receive more funds.

If more than 19 members of Mrs Merkel's coalition rebel against her, she will have to rely on the support of the centre-left opposition to pass the bill on new powers for the European Financial Stability Facility.

The BBC's reports that, although the bill is expected to pass by a close margin, Mrs Merkel could emerge weakened, unable to hold her coalition together at a critical moment in the eurozone crisis.

Mrs Merkel's Christian Democrats and their allies have been pressuring the handful of dissidents to get in line before the vote at 11am local time on Thursday.

The vote is on whether to endorse a eurozone commitment to boost bailout guarantees to €440 billion.

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

Mrs Merkel has said she believes the vote is about Germany demonstrating its determination to save the euro.

Meanwhile, British foreign secretary William Hague has compared the eurozone to a burning building with no exits.

Mr Hague said the German people would have to subsidise weaker Eurozone members for the rest of their lifetimes.

He told a British magazine that his experience in government had reinforced his view that the European Union had too many powers.