German parliament to vote on Greece bail-out funding

Angela Merkel's governing coalition has a comfortable majority in parliament

Germany's parliament is due to start debating a draft law on the country's share of the bail-out for Greece.

The lower house, the Bundestag, is set to debate the legislation for two hours before voting. The upper house, the Bundesrat, will vote afterwards.

Assuming both houses back the bill, as is expected, President Horst Koehler will then sign it into law on Friday.

Chancellor Angela Merkel has defended providing 22.4bn euros ($28.6bn) in aid to Greece, saying the EU is at stake.

On Thursday, she warned that if the 27 member states did not work together on such crises, "the markets will think we're unable to act".

Later, the French Senate approved France's contribution of up to 16.8bn euros to the aid package for Greece.

'Fattest cheque in history'

Ms Merkel's Christian Democratic Union and coalition partner, the Free Democratic Party, have a comfortable majority in parliament.

The opposition Social Democratic Party has said it will abstain in both votes, while the Greens have said they will support the bill.

What went wrong in Greece? Greece's economic reforms that led to it abandoning the drachma as its currency in favour of the euro in 2002 made it easier for the country to borrow money. Greece went on a debt-funded spending spree, including high-profile projects such as the 2004 Athens Olympics, which went well over budget. It was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics. Greece's economic problems meant lenders started charging higher interest rates to lend it money and widespread tax evasion also hit the government's coffers. There have been demonstrations against the government's austerity measures to deal with its 300bn euro (£267bn) debt, such as cuts to public sector pay. Now the government is having to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund. Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money. BACK 1 of 7 NEXT Finance Minister Wolfgang Schaeuble earlier asked the opposition for support for the legislation, telling the Westdeutsche Allgemeine Zeitung newspaper that the markets would "pay attention to how the help is being backed on a national level". Under the bail-out, Greece's 15 partners in the eurozone will lend it 80bn euros spread over three years and the International Monetary Fund will lend 30bn euros. The BBC's Steve Rosenberg in Berlin says there is strong public resistance to the bail-out and the press has labelled Germany's contribution as "the fattest cheque in history". Even if the legislation is approved, one group of euro-sceptic academics will challenge the decision in Germany's highest court, our correspondent says. Later on Friday, Chancellor Merkel will join other heads of state from the eurozone for an emergency summit in Brussels. Germany and France have already called for the single currency's rulebook to be rewritten - with tougher sanctions for those countries that run up big budget deficits, our correspondent adds.