Belfast Telegraph

Merkel's relief as Greece gets another extension

By David Elliott

G erman Chancellor Angela Merkel must be wiping the sweat from her brow after managing to push through a vote on allowing expanded powers for the EU's main bailout fund.

There wasn't much confidence that she'd manage to persuade enough MPs in the Bundestag to back a plan which will see the European Financial Stability Facility - basically the bailout fund - expanded to €440bn (£382bn) and given powers to offer precautionary loans to countries which look to be getting into difficulties.

She's been walking the political tightrope over the last few months, worried that offering further assistance to the EFSF to buoy up the struggling economies of the PIIGS regions (Portugal, Ireland, Italy, Greece, Spain) won't win her any fans in Germany.

The old 'well we managed to sort our economy out so why should we help them', isn't something peculiar to Germany but it has been a major stumbling block for Ms Merkel.

Of course, more relieved will be her counterpart in Greece who can at last see a little light at the end of the long, dark tunnel.

Whether lending more money to a country already up to its neck in debt is the answer to the eurozone's current problems remains to be seen, but is there any other option?

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