Germany Approves Euro Rescue Package
Policy + Politics

Germany Approves Euro Rescue Package

Germany moved Friday to shore up the euro and stabilize heavily indebted European nations, approving the country's share of a nearly $1 trillion euro-region bailout.


The lower house of the German Parliament, the Bundestag, voted 319 to 73 in favor of the package, which was put together two weeks ago. There were 195 abstentions. The upper house, the Bundesrat, passed the measure later in the day, sending it to Germany's president to be signed into law.

Under the plan, Germany is to provide as much as $184 billion in loan guarantees to debt-ridden states in the euro zone to backstop the European currency and protect the nations from default. The package follows an earlier rescue for Greece. As Europe's largest economy, Germany contributed nearly $28 billion to the Greek package.

The vote comes a day after a German crackdown on financial speculators threw global markets into a tailspin, sparking the largest losses on Wall Street in a year, infuriating other European powers as they try to stabilize the ailing euro and raising questions about the ability of world leaders to coordinate their efforts at financial reform.

The measures announced unilaterally in Berlin earlier this week took U.S. and European officials by surprise, and they run counter to the broad pledges of cooperation that leaders of the world's top economies said would guide their overhaul of financial regulation. Instead of shoring up confidence in Europe's ability to address an array of economic problems, the actions -- including an outright ban on some types of aggressive stock trading -- seemed to backfire and spotlight divisions in the euro zone.

The fallout from Germany's actions hit Wall Street hard. Coupled with disappointing U.S. economic news, it forced the Dow Jones industrial average down 376 points, or 3.6 percent, on Thursday.