Germany’s lower house of parliament, the Bundestag, today approved by a wide margin the country’s agreement to take part in a €100 billion bailout of Spain’s banks. The vote means that Eurozone finance ministers could approve the package as soon as tomorrow.
The Bundestag vote was 473-97 with 13 abstentions, and was required by German law which stipulates that the parliament must approve all funds directed to the Eurozone’s bailout funds. Germany’s contribution this time is €29 billion. German Chancellor Angela Merkel backed the plan and was able to persuade her own coalition to back it as well.
US equities markets reached a daily high shortly after the German vote was recorded. Investors were predictably happy to see that Spain’s banks wouldn’t collapse for another little while at least. Like every other recent effort to quell the Eurozone financial crisis this is another instance of kicking the can down the road and putting off until tomorrow any move that might lead to a permanent solution.