Germany's Bundestag lower house of parliament approved on Wednesday a motion to strengthen the Euro zone rescue fund via leveraging, providing Chancellor Angela Merkel with the mandate she needs to negotiate at a key Euro summit in Brussels.
The vice president of the lower house said 503 lawmakers had voted in favour of the motion, 89 had voted against and there were 4 abstentions.
The motion states that the European Central Bank (ECB) will no longer need to buy bonds on the secondary markets, and that the rescue fund cannot be financed through the ECB.
Merkel needed to win the vote in the Bundestag to have a mandate to negotiate a deal with other EU leaders aimed at delivering a range of measures to stop the Euro zone debt crisis spiralling.
The chancellor's hands have been tied in her negotiations on the Euro zone crisis since a Constitutional Court ruling last month demanded a greater say for German lawmakers on bailout issues.
Addressing the Bundestag Chancellor Merkel said European leaders should agree on what would amount to a 50% write-down of Greek debt from the private sector at a summit to tackle the Euro zone debt crisis later.
I will work towards reaching sustainable decisions this evening, she said, warning that Greece would need the support of the European Union for some time to come and that no overnight fixes were in sight.
We will do all we can to get Greece back on its feet as soon as possible, she said, adding: A debt write-down alone will not solve Greece's problems ... structural reforms must still be implemented.
”The goal of the meeting (Wednesday) tonight must be to get a result under which Greece will by 2020 have a debt to GDP ratio of 120%” said Merkel.