By passing the measure, Germany promised to increase its share of the loan guarantees to 211 billion euros, or about $287 billion, from 123 billion euros, as agreed by national leaders in Brussels back in July. Under the euro zone’s tortuous procedures, however, all 17 European Union countries that use the euro must approve the agreement, a process that has revealed ever more fissures, layers of decision-making and political complexity that add up to a worrisome inability to react quickly and decisively to upheaval in fast-moving financial markets.
“The markets see that Europe cannot decide anything quickly, and uncertainty is always an inducement to speculation,” said Gustav Horn, director of the Macroeconomic Policy Institute in Düsseldorf, Germany.
The process also leaves the European Union potentially hostage to its smaller members. A significant hurdle was overcome when Finland passed the bailout fund measure on Wednesday despite domestic objections and an unresolved dispute over its demand for collateral from Greece. (Estonia and Cyprus approved the plan on Thursday, and a vote in Austria is expected on Friday.)
Similar fears have been voiced about Slovakia, an impoverished nation from the former Communist bloc whose people suffered mightily to adopt the euro and have little stomach for bailing out richer countries like Greece. Of the handful of countries left to approve the measure, it is the only remaining wild card. Some leading Slovak politicians have been highly critical of the agreement, and the governing coalition itself is divided about supporting the fund.
The speaker of Parliament in Slovakia, Richard Sulik, has said he will do whatever he can to stop the bailout fund from coming to a vote, even as advocates have desperately sought a compromise.
But the combined pressure of the euro zone members will probably be more than Mr. Sulik and other opponents can bear. A spokeswoman for Parliament, Beata Skyvova, said that the speaker and the prime minister met on Thursday, but that no deal had been announced.
Analysts have already said that the fund, even if it passes in all 17 countries, will probably be too small to defend against speculative attacks on deeply indebted European nations. Nevertheless, although the German vote perhaps offered nothing more than momentary relief, it was the crucial step to move the fight forward to the next stage.
“Without Germany’s participation, nothing would have been possible,” Mr. Horn said. “This project would have been dead.”
For the beleaguered German leader, Chancellor Angela Merkel, Thursday’s vote represented a sorely needed victory. Mrs. Merkel has been sharply criticized for her opposition to economic stimulus and disparaged over her slow reaction to the crisis. Under her stewardship, the project of European integration seems to move forward only when forced by circumstances and specifically by financial markets. Yet step by tentative step, move forward it has.
In the historic Reichstag building, graffiti from Red Army soldiers who conquered the capital of Nazi Germany still adorn the walls. Outside the Reichstag, the home of the German Parliament, a protester held a sign reading “Europe Finance Suicide Fund,” a play on the name of the bailout fund, the European Financial Stability Facility.
“The chancellor’s path is extremely contentious, with the public plainly opposed because it is unclear what limit there is to how far Germany has to jump in to cover Greece’s debt,” said Werner J. Patzelt, a political scientist at Technical University in Dresden.
The German public is staunchly against paying the debts of other Europeans, stereotyped in the news media here as spendthrifts compared with the virtuously frugal Germans. But as Europe’s largest economy, Germany is the only nation with the fiscal wherewithal to pull fellow countries in the euro zone out of trouble.
Government statistics on Thursday showed that even as economic growth has stalled, unemployment has continued to fall in Germany, defying the trend that has pushed joblessness higher across Europe, particularly in recession-stricken economies like Greece and Spain. The Federal Labor Agency reported that the unemployment rate dropped to 6.6 percent in September from 7 percent in August.
Germany continues to preach savings over stimulus to contain the debt crisis, withstanding sustained pressure from American policy makers and opting for the path of fiscal discipline supported by the Netherlands and Finland.
“We here in Germany are now on the right path, and the rest of Europe has recognized that,” said Joachim Pfeiffer, a member of Parliament from Mrs. Merkel’s Christian Democratic Union. “Just a year ago we were still fiercely criticized, including by the Americans. Today, Germany is the model for Europe.”
Stefan Pauly contributed reporting.
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