German parliament backs bailout fund increase

GERMANY kept alive hopes that the euro can survive the sprawling debt crisis when lawmakers voted overwhelmingly in favour of expanding the powers of the eurozone’s bailout fund.

Yesterday’s vote strengthened Angela Merkel’s centre-right coalition, which had struggled to win support from a bloc of rebellious members, and could bolster her ability to negotiate new European crisis measures.

While many investors and experts believe new steps will be required in Europe, such as letting Greece write off more of its debt pile, Germany’s approval of the fund’s new powers and scope was necessary to avoid a new bout of massive market turmoil.