The vote to expand the bailout fund passed by a strong margin in Germany’s lower house. It followed Chancellor Angela Merkel’s plea to lawmakers to overcome their aversion to risk and put the might of Germany, Europe’s strongest economy, firmly behind efforts to get control of the crisis, which has unnerved financial markets far beyond Europe’s borders.
“The world is looking at Germany, whether we are strong enough to accept responsibility for the biggest crisis since World War II,” Mrs. Merkel said in an address to the Parliament in Berlin. “It would be irresponsible not to assume the risk.”
The administration of President Nicholas Sarkozy of France, who has also sought to project his intention for a decisive outcome at the summit in Brussels, said there was no other choice. “France is totally mobilized and engaged in the success of today’s summit,”
Nonetheless, fissures and significant disagreements among the Europeans were still unresolved ahead of the summit, particularly concerning Italy, the euro zone’s third-largest economy, where Prime Minister Berlusconi won only provisional support for economic reforms demanded by his European partners, mirroring the problems faced by many Greek leaders today.
The overall euro deal under discussion is complicated, including a deep restructuring of Greek debt, an injection of new capital into European banks made vulnerable by exposure to sovereign debt and an expansion of a bailout fund so that it can ward off a financial panic in Italy as well as in the relatively small economies of Greece and Portugal.
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