Merkel gets lawmakers' backing to leverage Europe's bailout fund
REPORTING FROM LONDON -- Members of the Bundestag, Germany's lower house of parliament, have given Chancellor Angela Merkel a strong mandate to increase the firepower of Europe's bailout fund at today's crucial summit in Brussels.
Lawmakers voted 503-89, with four abstentions, in favor of leveraging the fund to make it worth more than its current $600 billion.
With zero hour approaching for a "grand plan" to save the euro, Merkel had warned fellow lawmakers that the world was looking to their country to step up to the responsibility of helping guarantee Europe's continued stability and prosperity.
It was hoped that Wednesday's summit would provide a platform to devise a solid plan to solve the continent's debt crisis, which threatens the global economy.
Merkel told the German parliament that despite the risks involved, Europe's bailout fund would have to be leveraged to a size large enough to deal with big, debt-ridden economies such as Spain and Italy. Italian Prime Minister Silvio Berlusconi's government was on the brink of collapse this week over economic reforms demanded of him by the EU but resisted by his governing partners.
Analysts warn that if no credible plan is produced, the financial markets could be thrown into heavy turmoil and a return to global recession could loom larger.
-- Henry Chu
Photo: German Chancellor Angela Merkel, center, on Wednesday prepares to cast her ballot in the Bundestag on plans to boost the European Union's bailout fund in an effort to contain the continent's debt crisis. Credit: Odd Andersen / Agence France-Presse / Getty Images