Merkel Triumphs As Germany Expands Bailout Fund
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
German Chancellor, Angela Merkel, yesterday scored a victory as she successfully corralled her government into voting for the revamped bailout fund, asserting her political authority by pushing the deal through without the oppositions’ help.
German Chancellor, Angela Merkel, yesterday scored a victory as she successfully corralled her government into voting for the revamped bailout fund, asserting her political authority by pushing the deal through without the oppositions’ help.
A convincing 523 out of 611 members of parliament yesterday voted in favor of expanding the powers of the European Financial Stability Facility (EFSF). Under the new plan, the EFSF will be enlarged to €440 billion and be given the ability to give “precautionary loans” to struggling European economies, buy EU government debt and provide funding to shore up the capital reserves of European banks.
Related: Japan May Come To Greece’s Rescue By Buying More EFSF Bonds
Related: Europocalypse – Are The Days Of The Eurozone Numbered?: Nouriel Roubini
[quote] “The euro is our common future. Approving this European fund is of the very, very greatest significance,” said the Chancellor Angela Merkel before the vote in the German parliament. [/quote]
But some believe that the measures have only limited impact on the state of European economies, and that bailout measures had worsened Greece’s economic situation.
[quote] “Despite all arguments, the first bailout did not make the situation for Greece better, but worse. Expanding the fund will make the situation worse. A rescue package will only help in the short run, and in three to four years, Greece will be in the same spot again, said German lawmaker Frank Schäffler. [/quote]
Related: Europe’s Last Hope – Will Germany Step Up?: George Soros
Related: Money Matters: Why Germany Wants To Keep The EU Together
Many critics who say that the German public is upset over the bailing out of European countries (that they believe are squandering the EU funds on social spending) argue that the increased bailout would not stop Greece from doing more of the same. A recent poll showed that 66 percent of Germans oppose bailouts for Greece.
