Markets perk up after German MPs back bailout fund boost

European stock markets rose Thursday after Germany MPs agreed to boost the bailout fund for Greece and other troubled European countries. The European Commissione welcomed the vote and said it was confident that all 17 eurozone countries would ratify the plan.

Reuters/Ralph Orlowski

The stock exchanges in Paris, Frankfurt, Madrid and Milan all picked up after the Bundestag vote, although London fell 0.39 per cent.

“The process is moving forward,” said EU economic affairs spokesperson Amadeu Altafaj, pointing out that Finland backed the move on Wednesday.

Both countries have seen anti-EU sentiment rise in the light of bailouts for Greece, Ireland and Portugal.

The German lower house voted 523 to 85, with three abstentions, in favour of beefing up the 440-billion-euro European Financial Stability Facitlity (EFSF) and to give it new powers, which may include buying up bonds of struggling economies.

That will mean increasing Germany’s contribution to 211 billion euros.

Ten eurozone countries, including France, had already endorsed the move and the other six have to do so for it to go ahead.

Auditors from the European Union, European Central Bank and International Monetary Fund met officials in Athens Thursday, as state employees occupied a dozen ministry buildings in protest at the government’s austerity programme. They were to decide whether to hand over eight billion euros of bailout aid.

Prime Minister George Papandreou is reported to have phoned French President Nicolas Sarkozy to discuss the crisis, following a meeting with Merkel on Tuesday.

A second Greek package of 159 billion euros was agreed in July but has still to gain approval in member-states’ parliaments.