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Germany approves Greek bailout as Merkel gets her way

The German parliament approved the country's $28 billion contribution to the Greek bailout package on Friday. Chancellor Angela Merkel shifted from initial opposition to paying Greece's debts to concern over economic fallout in the rest of Europe.

By David FrancisCorrespondent / May 7, 2010

German Chancellor Angela Merkel arrives at the European Council building ahead of the Euro Zone leaders summit in Brussels, Friday. The German parliament approved the country's $28 billion contribution to the Greek bailout package.

Yves Herman/Reuters

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Berlin

The German parliament passed an unpopular Greek bailout today, paving the way for a $141 billion financial rescue of the debt-plagued Mediterranean country by the European Union and the International Monetary Fund to move forward.

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The broad support for the bill signaled Germany's shift from stubborn opponent of the bailout to reluctant participant. Its passage was a victory for German Chancellor Angela Merkel, who in recent weeks has become a vocal supporter of the plan.

“We have no better alternative,” Finance Minister Wolfgang Schaeuble told the Bundestag, Germany’s lower house of parliament, before the vote. “Any other way would be more expensive and more dangerous.”

The bill allows Germany to contribute $28 billion to the rescue package. The Bundestag passed the plan with overwhelming support – a vote of 390 to 72 – followed by an endorsement by the Bundesrat, the upper house of parliament. The opposition Social Democratic Party abstained from the vote, arguing that the burden for the bailout would fall too heavily on German taxpayers.

Shift for Merkel

The vote marks the end of a long political road for the chancellor. Originally opposed to a bailout, which is widely unpopular in Germany, Merkel was eventually convinced to save debt-stricken Greece for the sake of financial stability in the eurozone, the 16 European countries who share the euro as a common currency.

But Merkel's support came at a steep price for Greece, which has been forced to accept unpopular spending cuts at home. Protests against the austerity plan passed by the Greek government continued in Athens today.

“I’m deeply convinced that credibility results only from tackling the root of the problem,” Merkel said during a panel discussion yesterday, according to Bloomberg. She also insisted on a “solid savings program for Greece.”

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