Bloomberg News

Dutch Lower House Approves Expansion of European Rescue Fund

October 06, 2011

(Updates with vote details starting in second paragraph.)

Oct. 6 (Bloomberg) -- The lower house of the Dutch parliament approved the expansion of Europe’s temporary rescue fund, leaving only Slovakia and Malta among the 17 euro-area members that are yet to have lawmakers vote on the mechanism.

Lawmakers in The Hague voted 96 to 44 to back measures that broaden the scope of the European Financial Stability Facility. Parliament brought the vote forward from next week to prevent the fifth-largest economy in the euro region from being the last to decide. Malta’s parliament will vote on the proposal on Oct. 10 and Slovakian lawmakers will decide a day later.

Prime Minister Mark Rutte’s ruling bloc of Liberals and Christian Democrats relied on the opposition Labor Party for a majority. Geert Wilders’s Freedom Party, which agreed to support the minority Cabinet as part of last year’s governing coalition accord, opposes further financial aid to European Union states.

Europe’s debt crisis intensified as Moody’s Investors Service lowered Italy’s debt grade by three steps on Oct. 4, warning that euro-area nations rated below the top Aaa level may see their rankings cut.

The enhanced powers of the 440 billion-euro ($591 billion) EFSF were approved at a July 21 meeting of European leaders in Brussels. The measures would allow the fund to buy the debt of stressed euro-area nations, aid troubled banks in the region and offer credit lines to governments. The EFSF’s current role is to sell bonds to finance rescue loans.

Dutch parties supporting the expansion of the rescue fund have a majority in the 75-seat upper house of parliament, which is scheduled to vote on the expansion of the fund on Oct. 11.

--Editors: Heather Langan, John Simpson

To contact the reporter on this story: Jurjen van de Pol in Amsterdam at jvandepol@bloomberg.net.

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net.


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