BERLIN (Dow Jones)–German Chancellor Angela Merkel’s center-right coalition faces a tough political test on Thursday when the parliament votes on expansion and reform of the euro-zone’s bailout fund, the European Financial Stability Facility.
Parliamentary debate begins at 0700 GMT. The result of the vote is expected to be announced in parliament around 1100 GMT.
Support of the EFSF bill by the broader parliament is virtually certain. The opposition Social Democrats and the Greens have said they will support the bill.
The big question is whether Merkel’s own coalition parties will be able to muster enough votes to pass the bill without the help of the opposition. Such a so-called chancellor’s majority is only required when parliament actually elects the chancellor from its ranks. But in this case, lack of support from her own coalition could weaken the chancellor and make it harder for her to convince parliament to back future bailouts and other measures needed to stem the euro-zone debt crisis.
Sept. 28 (Bloomberg) — President Barack Obama said Europe’s debt crisis continues to be a drag on the U.S. economy and the response of governments there hasn’t been as robust as needed.
“In Europe, we haven’t seen them deal with their banking system and their financial system as effectively as they needed to,” Obama said in response to a question about U.S. economic growth during a roundtable discussion on Hispanic issues at the White House.
Obama didn’t specify what steps should be taken.
The administration has been in contact with European governments “at the presidential level, at the ministerial level” to urge “forceful” action in dealing with the debt crisis, White House press secretary Jay Carney said at a briefing afterward.
The European Commission is resisting a push to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit, according to a European official.
The Italian and French bans will remain until November 11, while the Spanish curbs would remain until market conditions changed, the European Securities and Markets Authority said in a statement.
The three countries introduced the bans on Aug. 12 in a bid to curb wild swings in stock markets. They were extended later that month and were due to expire at the end of September.
Belgium also introduced a ban in August but it has no expiry date and remains in place.