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This is MORNING EDITION, from NPR News. I'm David Greene, in for Renee Montagne.
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And I'm Steve Inskeep. Good morning. The German parliament today approved a measure to boost the lending capacity and power of a bailout fund. This is an effort to help debt-troubled countries in Europe and help that continent get past its debt crisis. This is a $600 billion bailout fund, and the latest measure gives the fund expanded powers to aid euro governments before they get into deeper trouble. And yet, many economists are saying that even $600 billion is not enough to call markets.
NPR's Eric Westervelt reports from Berlin.
ERIC WESTERVELT: Chancellor Angela Merkel faced one of the biggest parliamentary votes of her career. In the end, despite some defections by members of her own coalition, the measure passed. It gives what's known as the European Financial Stability Facility new powers to make emergency loans to debt-troubled countries that use the euro before they get into a major crisis. And it expands the fund's ability to buy government bonds of troubled eurozone countries, among other things. German officials say today's vote sends a strong message that Europe is taking decisive action to stabilize and preserve the eurozone.
But already, there's talk that Europe will have to leverage the fund's power by partnering more with the European Central Bank, or taking other steps. Peter Alitmaier, the chief whip of Merkel's ruling center-right Christian Democratic Union, says that's not on the table for now.
PETER ALITMAIER: All other further decisions will be discussed and taken step-by-step. And it would be more than premature to table decisions like this leverage issue that we cannot judge appropriate for the time being. We will tackle the next problems one after the other, but not now.
WESTERVELT: But it's exactly that kind reactive, cautious leadership approach that the financial world has strongly criticized Merkel and fellow European leaders for exercising during this crisis. The problem now - and it's a big one - is that most economists think the current stability facility - even with expand powers - is simply not big enough to prevent debt turmoil from spreading across Europe and hammering the banking sector.
There's already talk of the need for a two or three trillion-dollar fund. Senior officials in the U.S., Japan and elsewhere are urging Berlin and Paris to move more decisively to create a safety net big enough to prevent Greece's debt woes from spreading and sparking a new global downturn. Harvard economics professor and author Ken Rogoff says the risks are real, and a renewed sense of urgency is needed.
KEN ROGOFF: The risks now are approaching what we had in 2008, and particularly in Europe, urgent action is needed. They seem to be just waiting for things to unfold, to have a disorderly default and a cascade of bank panics. I'm afraid this is a very nervous moment.
WESTERVELT: But here in Germany - despite strong support for the ideals of European integration - the worry remains that the endgame of all this involves the German taxpayer footing the bill for fiscally imprudent neighbors. Sixty-eight-year-old tourist and retiree Martin Wortmann from northwest Germany strolls with his wife near the historic Reichstag on a sun-filled fall Berlin day. Wortmann says he's conflicted about the debt drama and feels like Germany is being blackmailed by market speculators.
MARTIN WORTMANN: (German spoken)
WESTERVELT: I'm really of two minds. That it's come this far is dreadful, he says. We should have dealt with this problem much sooner. The situation is now so out of hand, we're being held ransom by the markets and forced to do something. On the other hand, he says, Germany's partly to blame, with its trade imbalance, and that's the heart of the problem, the imbalance within this monetary union among individual countries, he says.
The libertarian Free Democrats, or FDP - who are Chancellor Merkel's governing coalition partner - have seen their popularity plummet, in part because of positions taken during the debt crisis that many voters have seen as anti-Europe. Some FDP officials have called for Greece to default and leave the eurozone. Free Democrat MP Frank Schaffler says he and other FDP rebels are simply realists standing on principle, whereas Chancellor Merkel, he says, is a euro romantic.
FRANK SCHAFFLER: (Through translator) Greece has no chance in this crisis if it stays within the eurozone. The markets know this. It would be in the interest of Greece and Europe if Greece were to temporarily leave the eurozone, and then we can talk about how to support their banking system and avoid a domino effect.
WESTERVELT: The measure still needs to pass half a dozen more European parliaments. Germany - Europe's largest economy - today voted to expand the powers of the euro rescue fund. But once again, many are wondering if European leaders are reacting too late to appease the markets. Eric Westervelt, NPR News, Berlin.
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