Merkel seeks parliament backing before crunch EU talks

BERLIN, Oct 26, 2011 (AFP) - Chancellor Angela Merkel was poised Wednesday to win crucial backing from German lawmakers on beefing up the EU's bailout fund, hours before a crunch summit to tackle the euro debt crisis.

On what several German dailies called a "day of fate" for the euro, Merkel seemed sure to clinch broad support for plans to raise the firepower of the bloc's 440-billion-euro ($612-billion) war chest to stop the crisis spreading.

All the parliamentary groupings in the Bundestag lower house of parliament -- with the exception of the Linke far left -- have signed a text giving Merkel a mandate to scale up the fund without putting more money in -- out of the question in EU paymaster Germany.

The brief text, obtained by AFP, refers to two models being examined for bolstering the fund, the European Financial Stability Facility, or EFSF.

One would insure jittery investors against potential future losses from the debt of shaky countries, hopefully encouraging them to continue to buy bonds from the likes of Italy, Portugal and Spain.

The second calls for aid to be co-financed by public or private investors, including foreign countries. "The two models are not mutually exclusive," the text says.

Earlier Wednesday, the China Daily reported that Beijing and other emerging powers had agreed to help the eurozone, citing a source close to EU decision makers.

Merkel was due to address the chamber at around 1000 GMT, ahead of a debate and the vote.

Following the vote, Merkel will fly to Brussels where EU leaders were due to gather from 1600 GMT.

After this meeting, the heads of the 17 eurozone countries will hold talks in a bid to thrash out a solution to what is seen as the worst economic emergency in the EU's history that threatens to tip the world into recession.

"It is going to be a long day," said Merkel's spokesman Steffen Seibert, on microblogging site Twitter.

Other news