Merkel relieved as coalition MPs vote through euro bailout fund

Angela Merkel survived the biggest political challenge of her chancellorship yesterday after she narrowly defeated a rebellion within her government and won approval for a hugely unpopular new EU bailout fund.

In a significant endorsement of Ms Merkel's authority, her coalition of conservatives and liberal Free Democrats secured a majority of 315 in Germany's 620-seat parliament in a crucial vote ratifying expansion of the European bailout fund with some €211bn of German taxpayers' money.

Herman Gröhe, the deputy conservative leader, welcomed the result, saying: "The large parliamentary majority clearly demonstrates that Germany is committed to the euro and to protecting its currency."

With an estimated 80 per cent of German public opinion against the expanded bailout, the measure had been strongly opposed by rebel conservative and liberal MPs within Ms Merkel's coalition. The Chancellor was not sure of obtaining a majority from her MPs until votes were finally counted.

In the event, 15 of her coalition's 330 MPs voted against her. Although the outcome of the vote was not in doubt because opposition parties had agreed to back Ms Merkel, political observers had warned that failure to win a majority from her own MPs would have put the future of her government at stake.

"This is a huge weight off my heart," Peter Altmaier, the conservatives' chief whip, said. "It sends a strong message to Europe, the markets, the US, to everyone."

Dissenters said the result showed that the EU was turning into a transfer union. Yesterday's vote took place just 48 hours after the Greek Prime Minister George Papandreou flew to Berlin to appeal for German help to solve his country's crippling debt problem which sparked the current euro crisis.

As MPs gathered in Berlin's Reichstag parliament yesterday morning, protesters were out in force in Athens, where the so-called "troika" of inspectors from the International Monetary Fund, the European Central Bank and the European Commission were due to arrive to assess Greece's progress meeting its fiscal obligations to stem its crisis.

Ms Merkel's handling of the euro crisis has been perceived as inept by most German voters. Opinion polls have consistently shown a large majority opposed to spending large tranches of taxpayers' money on rescuing failed eurozone countries such as Greece. As a result, the Chancellor's conservative and liberal coalition parties have suffered a string of humiliating defeats in key state elections throughout Germany this year.

In polling in city state elections in Berlin earlier this month, the liberals won only 1.2 per cent of the vote and failed to enter parliament.