German govt confident on euro rescue fund

BERLIN — Senior government lawmakers said Monday they're confident that German Chancellor Angela Merkel's coalition will stand firm behind plans to beef up the eurozone rescue fund when parliament votes later this week.

Lawmakers vote Thursday on expanding the powers of the €440 billion ($595 billion) fund.

The measure's passage appears assured because of opposition support but the governing coalition is seeking to secure a majority with its own votes — overcoming some center-right lawmakers' doubts. The opposition maintains failure would endanger the government's future.

"We stand very clear behind this government and the chancellor," Volker Wissing, a deputy parliamentary leader of the Free Democrats, the junior coalition partner, said on ARD television.

"I am convinced that, as a government, we should have our own majority in central questions; we are aiming for one and have good prospects of getting one," he added.

Peter Altmaier, a top lawmaker with Merkel's Christian Democrats, said he also expects a "large majority of our own." He added on Deutschlandfunk radio that "this week will stabilize the coalition," which has been dogged by internal tensions and poor poll ratings.

Merkel, who has been caught between criticism from abroad for doing too little and supporters at home who fear she is doing too much, went on German television Sunday night to defend her step-by-step tackling of the crisis.

She warned of the dangers a radical restructuring of Greek debt might bring at this stage.

"Lehman Brothers was allowed to go bust, and then the world was surprised that it fell into a deep crisis," Merkel said on ARD television.

"What we have to learn is that we can only take steps we can really control," she added. "The word 'haircut' is easy to say on its own ... (but) we must go step by step."

"What we cannot do is, along the way, destroy the confidence of all investors, and (have) them say, OK, they did this with Greece now; tomorrow they'll do it with Spain, the day after with Belgium or some other country," Merkel said.

"Then no one anywhere would invest their money in Europe any more, and we have to prevent that."