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Merkel on way to EFSF approval

Thursday 1 September 2011 - by Nicola York

Angela Merkel with Barroso - photo by European Council

German Chancellor Angela Merkel has moved one step closer to gaining approval from parliament to push through changes to the eurozone's bailout fund after winning backing from her cabinet.

The proposed changes to the European Financial Stability Facility are part of a deal worked out by European leaders in July on Greece's second bailout but they must be ratified by all member states before the second bailout can go ahead.

The measures must now be passed by Germany's lower house at the end of September where Merkel is expected to face strong opposition to the plans from her own governing coalition party.

The changes will allow the EFSF to use a larger amount of funds without getting permission from contributing countries. This will allow the speedier recapitalisation of a country's banks or the buying up of sovereign bonds in the secondary market without first having to seek approval from member states.

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Email: nicola.york@gfsnews.com


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