German cabinet approves eurozone rescue plan

08:32, May 12, 2010      

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The German cabinet Tuesday approved Berlin's share in the 750-billion-euro (955-billion-dollar) eurozone rescue plan, clearing the way for its passage through parliament.

German Chancellor Angela Merkel said on Monday that her cabinet would approve Germany's contribution to the EU rescue package as soon as possible to stabilize the euro and fight against speculations.

EU finance ministers agreed on Monday on a special fund to raise up to 440 billion euros (560 billion U.S. dollars) over three years to aid fiscally troubled member states.

Eurozone countries are to guarantee the loans and the amount each country has to guarantee will be calculated based on its share in the capital of the ECB.

Germany will contribute at least 123 billion euros (156.6 billion U.S. dollars) according to its share and the amount may increase to 147.6 billion euros (187.9 billion dollars) if not all member states can join in.

German government spokesman Ulrich Wilhelm said on Monday that "there exists the possibility that not every state will be able to participate in these bilateral guarantees." Thus, the share of loans Germany will have to guarantee might rise above the basic quota, he said.

After the approval of the government, the bill will be submitted to the Bundestag, the lower house of parliament, which will discuss it on Tuesday afternoon.



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