Germany votes for bailout funds


May 10, 2007
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Germany lawmakers vote decisively to boost Europe bailout fund -

Analysts welcomed the move to strengthen the bailout fund to about $600 billion, but they warned that a far larger fund and even a partial default by Greece will almost certainly be necessary to keep the crisis from swallowing up bigger nations such as Italy and Spain.

A leap in borrowing costs for Rome on Thursday showed that global investors remain unnerved by high levels of government debt and unconvinced by official efforts to deal with the problem. Critics are doubtful that Europe's leaders can finally get out in front of a crisis that has so far outpaced their ability to respond and that many observers believe is fast coming to a head.

In Berlin, German lawmakers voted by a surprisingly decisive 523 to 85, with three abstentions, to ratify the plan. The measure not only increases their country's contribution but also gives Europe's bailout fund greater capacity to lend to troubled nations, buy their bonds and extend credit to cash-squeezed banks.
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