German politicians back bailout fund boost

The German parliament has given wide backing to plans to increase the firepower of the Eurozone’s bailout fund.

Lawmakers voted 503-89 with four abstentions in favour of leveraging the €440bn rescue fund to make it more effective.

That sends chancellor Angela Merkel to a European Union summit in Brussels today with a strong mandate to seal a deal.

Opposition leaders briefed by Mrs Merkel have said the changes would take the fund’s lending capacity above €1trn, though that figure has not been finalised.

Mrs Merkel told the German parliament the world is watching to see whether Europe and Germany would take responsibility in “Europe’s most serious crisis since the end of World War Two”.

She indicated that private investors should take a writedown of at least 50% on Greek debt holdings.