German bailout vote: Merkel's authority survives

Chancellor Angela Merkel survived with her authority intact, but more will be demanded of Germany

Humiliation sailed close to Angela Merkel today.

If four more members of her coalition had voted against the bill to expand the powers of the main bailout fund she would have had to rely on the opposition and her authority would have been weakened.

There was a brief smile of relief when Chancellor Merkel walked across the floor of the Bundestag and studied the voting figures as assembled by her chief whip.

Even during the debate - which she didn't speak in - she had been active - seeking out MPs who might be potential waverers.

So she remains by far the most important leader when it comes to the eurozone crisis. Her authority is intact. What has happened, however, is that rebels have placed a mark in the sand, that if further resources are demanded of Germany then their support cannot be counted on.

Firmly committed

But the message that came from today's vote was that Germany's political class is firmly committed to fighting for and saving the euro even if the German people are growing more wary by the day.

That may prove a factor in the future - the growing divergence between the political elite and the people.

What has happened is that a debate over Europe has now started in Germany. Europe as a subject was never much of an issue politically. Now it is. It is a settled issue no longer.

Every day brings new indications of Germans rethinking their approach to European integration.

A recent poll suggested that if a truly Eurosceptic party stood in Germany it would do well. Another poll indicated that a majority of Germans saw the European single market as a risk to their living and working conditions.

So there was passion in the debate today. It was at times noisy with interruptions.

The new bailout fund is likely to come into operation in October. It has been expanded to 440bn euros (£380bn). It will be used to help with the second Greek bailout if that finally gets the go-ahead from the troika - the EU, the IMF and the ECB. The new powers will enable the fund to help banks and countries that run into difficulty.

But German leaders accept that this umbrella is not big enough to help countries as big as Italy. That is why there is much discussion about borrowing against the EFSF to build a much larger pot of around two trillion euros.

Yesterday's war?

The German government has not agreed to this idea. Indeed they did not want it even mentioned before today's debate.

Evidence from the Bundestag suggests there are a significant number of MPs who supported the bailout fund this time around but would not be prepared to go further.

The German Finance Minister Wolfgang Schaueble seemed to give a commitment that Germany would limit its guarantees to 211bn euros.

Mention of "euro-bonds" where each nation's debts were folded into a common European debt was met with howls of derision. Even the opposition said politicians had to be honest with the German people over the fact that 27% of all bailout funds had to come from Germany.

But before the ink is dry the markets are demanding more measures to prevent the crisis spreading from Greece to Italy. So, as one EU official is quoted as saying, today's debate may be a case of fighting "yesterday's war". Much more will be demanded of Germany.