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Markus Schreiber, AP Photo
German Finance Minister Wolfgang Schaeuble reacts during the debate about the eurozone bailout fund at the German parliament Bundestag in Berlin, central Germany, Thursday, Sept. 29, 2011. German lawmakers are expected to approve new powers Thursday for the eurozone bailout fund in a major step toward tackling the bloc's sprawling sovereign debt crisis.

BERLIN — German lawmakers on Thursday overwhelmingly approved expanding the powers of the eurozone bailout fund in a major step toward tackling the bloc's sprawling sovereign debt crisis.

The measure had been largely expected to pass the lower house of parliament, but a lively debate ahead of the vote reflected how divided Germans remain over their role as Europe's economic power.

Of 611 lawmakers present, 523 voted in favor, while 85 voted against it. Only three lawmakers abstained, meaning that Germany in the future will be guaranteeing loans to the bailout fund, the so-called European Financial Stability Facility, or EFSF, of up to €211 billion, rather than €123 billion so far.

The vote also highlighted tensions in Chancellor Angela Merkel's center-right coalition that was strained by threats of dissent from many members who balked at the cost of propping up the eurozone's strugglers.

"Today we will make an important contribution to our nation, to Europe and to the stability of the euro," Volker Kauder, the parliamentary leader of Merkel's bloc, said in opening remarks on the debate.

Yet Frank Schaeffler, a member of Merkel's junior partner, the Free Democrats, argued that bailout measures have worsened Greece's economic situation.

"Despite all arguments, the first bailout did not make the situation for Greece better, but worse," Schaeffler said. "Expanding the fund will make the situation even worse."

The lawmakers — under close scrutiny from jittery markets — were voting on European leaders' decision in July to increase the effective lending capacity of the fund to €440 billion ($595 billion) and give it new powers, such as buying the bonds of shaky countries or lending money to governments before they get into a full-blown crisis.

Though Merkel described the euro ahead of the vote as "our common future" and said approving the beefed-up bailout fund was "of the very, very greatest significance," discussions went deep into the night Wednesday, in an attempt to win over dissenting members of her governing coalition.

It was not immediately clear whether her coalition had been able to pass the measure on the strength of its own votes alone.

Opposition leaders said that if Merkel's coalition has to rely on their votes, it would be a sign that her strife-prone and increasingly unpopular government is finished.

On Wednesday, Finland voted in favor of expanding the fund's powers despite earlier threats to pull out of a rescue plan for Greece.

The fund expansion has to be ratified by all 17 eurozone nations to take force.

Germany's upper house of parliament is expected to pass the measure on Friday.


Geir Moulson contributed to this story.