LONDON: Cracks showed in Germany’s governing coalition during a crucial vote to strengthen the euro bailout fund yesterday, but the Chancellor, Angela Merkel, escaped a politically humiliating result that would have threatened her leadership.
As expected, the proposal to increase the size of the European Financial Stability Facility was passed. The final vote was 523 votes to 85. Fifteen rebel backbenchers voted no or abstained. Fifteen rebel backbenchers voted no or abstained, but she was left with a safe margin the Germans call “the chancellor’s majority”.
The rebellion in her ranks was smaller than had been feared and spared her the embarrassment of having to rely on the opposition to pass the proposal.
The chief executive of the Berlin Stock Exchange, Artur Fischer, told the BBC it was a good result for Mrs Merkel but the vote did not resolve the euro crisis, which would take years to fix.
Gero Neugebauer, a political scientist at Berlin Free University, said it left Mrs Merkel “walking on the brink of disaster” given her government’s loss of popular support over the issue.
“As soon as the people doubt the ability of Mrs Merkel to conquer the crisis, to keep Germany’s economic and social institutions stable … they will turn away from Mrs Merkel,” he told the BBC.
Polls report up to 70 per cent of Germans resent their nation’s contributions to bailing out Greece and other troubled countries. But political instability in Germany would further rock the euro zone. With Greece lurching closer to default, and authorities working on contingency plans, the vote was seen by the markets as crucial to maintaining confidence that Europe can prevent troubled member states, and the euro itself, from failing.
The fund’s expansion to €440 billion ($609 billion) must be approved by other nations and is unlikely to be finalised until late next month. Germany’s contribution would almost double from €123 billion to €211 billion, a move many Germans and some politicians argue would be throwing good money after bad.
The British government is also split over the crisis. The Deputy Prime Minister, Nick Clegg, is at odds with his Conservative coalition colleagues.
More than 100 Conservative MPs have backed a group that is pressuring the Prime Minister, David Cameron, to loosen Britain’s ties with Europe, and the issue is set to be the focus of next week’s Conservative Party conference, The Daily Telegraph in London reports.

First published in the Sydney Morning Herald.