Eurozone: German Court Validates Participation in Euro Zone Bailout Fund - by Jack Ewing

Germany’s highest court ruled on Tuesday that the country’s government may participate in a fund set up to help financially stricken countries in the euro zone.

The decision is a defeat for skeptics of the euro and removes lingering doubts about whether Germany will contribute resources to a rescue fund that has been crucial to the survival of the euro zone.

The decision by the court, the Federal Constitutional Court in Karlsruhe, to dismiss challenges to the country’s participation in the fund was expected after the court issued a preliminary ruling in 2012. That ruling allowed Germany to contribute to the fund, called the European Stability Mechanism, provided that the German Parliament was consulted on any commitment above 190 billion euros, or $264 billion.

The decision on Tuesday removes any uncertainty about whether Berlin will continue to contribute to the fund, which has a lending capacity of €500 billion and would not be credible without the support of Germany, the euro zone’s largest and richest member.

In a unanimous decision, the eight judges who considered the case said that it was up to Parliament, which approved Germany’s participation in the fund by a large majority, to decide about the risks and benefits of such commitments.

Read more: German Court Validates Participation in Euro Zone Bailout Fund - NYTimes.com

Greece to vote on euro 18 Billion in New Cuts - by L. Alderman and R . Donaldo

Destabilized by scandals yet held together by a lack of alternatives, the Greek government prepared to push a raft of politically toxic new austerity measures through Parliament on Wednesday, a move aimed at securing international financing and ensuring that the debt-wracked nation will remain in the euro zone.

But some members of Prime Minister Antonis Samaras’s fragile three-party coalition government were expected to break ranks and vote against the measures, reviving questions about how long the coalition can hold together. 

On the streets, austerity-weary Greeks kicked off two days of nationwide strikes on Tuesday to protest the new measures, which will total euro 18 billion (US $23 billion) over the next four years.

Read more: Greece to Vote on $23 Billion in New Cuts - NYTimes.com

Eurozone: Flaherty affirms no eurozone bailout funds from Canada

Canadian Finance Minister Jim Flaherty is standing firm in reiterating Canada's position that it will not ante up part of the $400 billion US sought by the International Monetary Fund for an emergency eurozone fund.

While other world financial leaders have already made funding commitments, Flaherty told reporters Friday at a press conference in Washington, D.C., that no such pledge could be expected from Canada.

"Canada has always supported the IMF," Flaherty said after meeting with other G20 finance ministers. "At the current juncture, however, we believe that the fund has adequate resources to deal with imminent needs.

For more: Flaherty affirms no eurozone bailout funds from Canada - Business - CBC News

Greece wins confidence vote

The Greek government has won a vote of confidence, overcoming the first hurdle in winning a new financing package from the European Union (EU) to avoid bankruptcy.

The announcement came as protesters gathered outside parliament shouting slogans against austerity measures as Greece battles to avoid defaulting on huge loans next month.
More than half the deputies in the 300-strong parliament backed the socialist government of prime minister George Papandreou, who reshuffled his cabinet last week to stiffen resolve behind a painful new austerity program.

For more: Greece wins confidence vote - ABC News (Australian Broadcasting Corporation)

EU tells Portugal 'no aid without harsher cuts' - Telegraph

European Union finance ministers told Portugal it would have to implement tougher austerity measure than those proposed by its outgoing government if it hoped to secure a bailout.

For more: EU tells Portugal 'no aid without harsher cuts' - Telegraph

Europe agrees financing for future bailout fund

Germany's finance minister says 17 states that use the euro have agreed on the financing of the eurozone's future bailout fund and slightly lowered the contributions for poorer states.

Wolfgang Schaeuble said Monday the eurozone members will give the European Stability Mechanism a capital base of euro80 billion and provide euro620 billion in callable capital, which has to be made available if a bailed out country looks unable to repay its loans.

That will give the ESM — which will come into force in mid-2013 — an effective lending capacity of euro500 billion.

For more: The Associated Press: Europe agrees financing for future bailout fund

Europe Leans Towards Expanding Rescue Fund -

European leaders look increasingly willing to boost a European Union bailout fund, as the bloc's finance ministers prepare for a regular meeting in Brussels next week.

European Commissioner Michel Barnier Friday said the European Union has decided in principle to boost the support mechanism for cash-strapped member states and help to support the euro.

"The position of the EU is clear and there has been a decision to boost support mechanisms. The specifics of this will be decided by finance ministers," Mr. Barnier said at a press conference in Athens after meeting with Greek political leaders.

For more: Europe Leans Towards Expanding Rescue Fund - WSJ.com