WORLD MARKET – The German parliament on Thursday voted to increase the size and flexibility of the euro-zone rescue fund, providing an important victory for Chancellor Angela Merkel as she battles increasing public skepticism over the country’s role in bailing out its currency partners. In an important development Merkel maintains crucial support of her center-right coalition.
523 members of the Bundestag, the lower house of parliament, voted in favor of the enhanced powers, while 85 voted against and three abstained. The Highlight of the vote is the strength of her center-right coalition. With 315 votes she didn’t have to rely on the backing of opposition parties to win passage of the measures.
German Finance Minister Wolfgang Schaeuble, in a German radio interview on Thursday, said there would be no additional changes to the EFSF without the approval of Germany’s parliament.
Eurozone and EFSF
More than half of the euro zone’s 17 members have approved the package, which boosts the European Financial Stability Facility’s lending power to 440 billion euros ($599 billion) from €250 billion and gives it power to buy sovereign bonds, provide credit lines to governments and facilitate bank recapitalizations.
According to some analyst Bigger EU bailout fund may not ease debt woes of Eurozone. Markets have factored in the German Vote and with today’s development market will remain sideways according to Andrew Freris, chief investment advisor Asia of BNP Paribas wealth management believes. After German vote analyst will closely watch Greece’s commitment to reduce fiscal deficit and incremental bailout installment. German market swung between loss and profit and traded in a very narrow 15-20 point band. Taking some positive clues Dow Jones Future were trading at 11065 (Up 89 Points).