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German parliament approves aid for Greece

German parliament approves aid for Greece

Germany's parliament today overwhelmingly approved billions of euros in international aid for Greece, handing a much-needed financial boost to Athens as it battles against bankruptcy.

Deputies voted by 473 to 100 to give the green light to the release of $56.9 billion in aid to debt-wracked
Greece agreed after torturous talks between eurozone finance ministers.

There were 11 abstentions. 

The result of the vote was never in doubt after the two main opposition parties vowed to support Chancellor Angela Merkel's ruling centre-right coalition, with less than a year until elections.

A breakdown of the vote showed that Merkel did not have to rely on the opposition to win. From her own coalition ranks, 297 deputies voted in favour, enough to carry a majority from the 584 votes cast.

Ahead of the vote, Finance Minister Wolfgang Schaeuble pointed to the significant efforts made by the Greek
government to implement reforms demanded in return for the aid and warned of the consequences of letting Athens fall.

"Without our support, it would not only be the future of Greece at stake, but also the future of the eurozone as a whole," Schaeuble said. 

"The potential impact of a Greek default on other eurozone countries and the eurozone would be serious. The
consequences are not foreseeable. We cannot start a process that could end in the break-up of the entire eurozone."

Although the opposition Social Democrats (SPD) voted largely in favour, political debate has raged over whether German taxpayers will eventually have to accept losses on Berlin's holdings of Greek debt.

Many in Germany consider that a so-called haircut -- or write-down of Greek debt holdings -- by public institutions like other eurozone governments and the European Central Bank is inevitable.

And opposition politicians have accused Merkel of playing down the need for a haircut on Greece, fearful of the impact on her chances in a federal election expected to take place on September 22.

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