German Chancellor Angela Merkel's ruling center-right coalition worked to muster enough votes to pass legislation on Thursday to expand the euro zone's bailout fund. After a tense round of meetings with lawmakers, however, it remained unclear if the coalition could do it without the opposition's help.
The 17 euro-zone governments agreed in July to expand the European Financial Stability Facility to €440 billion ($593 billion) from €250 billion, a move that German and other euro-zone lawmakers are in the process of ratifying.
Even as they do this, they are facing calls—from U.S. Treasury Secretary Timothy Geithner, among others—to further boost the fund's firepower. This week the German government firmly rejected such an idea, warning it would jeopardize the triple-A credit ratings of some contributing countries.
Gaining approval for July's agreement is proving thorny enough for Ms. Merkel.
In a closed-door meeting of her conservative alliance of Christian Democrats and Christian Social Union in the Reichstag on Tuesday, 11 conservative lawmakers voted against the bill to overhaul the EFSF. Two lawmakers abstained. Across the hall at the meeting of the pro-business Free Democrats, the coalition's junior partner, lawmakers debated the issue but didn't take a new straw poll. FDP officials said after the meeting that little had changed since the prior vote in early September, when two FDP lawmakers opposed the bill and four abstained.
"I am confident that the government will achieve its own majority," Ms. Merkel said at a briefing in the chancellery before a working dinner with Greek Prime Minister George Papandreou.
Still, the math is tricky. Ms. Merkel can lose just 19 votes in the final poll, lest she fall short in support from her own government to pass the legislation with an absolute majority of her coalition parties. The current count shows the coalition could squeeze through or could end up with as many as 20 "no" votes and abstentions.
In that case, Ms. Merkel would have to borrow votes from the opposition Social Democrats and the Greens. The government isn't required to have a coalition majority to pass the law, but failure to have the full backing of her coalition for such important legislation would weaken the chancellor and could make it more difficult for her to get support for bolder action to resolve the euro-zone debt crisis.
"Legally it is not a problem," said Volker Wissing, a senior FDP lawmaker. "But it is a problem politically."
Ms. Merkel appealed to lawmakers to consider the stakes of Thursday's vote, said a person who was in the room. For the past week, she has toured the country, speaking to regional conferences of her conservative party to convince voters that stabilizing the euro isn't an act of altruism for Greece and other struggling euro-zone countries but in Germany's own self-interest. On Sunday, Ms. Merkel took the message to a popular television talk show.
Over the past few weeks, Ms. Merkel has seen her room to maneuver become tighter. Last week, lawmakers responded to a ruling by Germany's highest court that any bailout mechanism must respect the rights of Germany's parliament by giving lawmakers a veto over any future bailouts. Two-thirds of Germans oppose further euro-zone bailouts in public-opinion polls.
Public disapproval of Ms. Merkel's handling of the euro crisis has bolstered the Social Democrats and Greens. The parties now lead opinion polls and are hoping that a failure of the coalition to back Ms. Merkel on the EFSF could lead to new elections.
"If she can't get that chancellor's majority, it will be a clear sign her coalition is unsustainable—regardless of how the vote turns out," said Axel Schäfer, a leading Social Democrat. "Thursday holds the hour of truth."
Opposition to the EFSF may also be weakening because one controversial idea—leveraging the EFSF to give it more bailout firepower—appears dead in the water. German Finance Minister Wolfgang Schäuble raised the idea, but dropped it in the face of opposition within the coalition.
Hermann Otto Solms, an influential FDP financial expert, told German television that he would vote for the EFSF now that the government clearly opposes risky measures such as leveraging the fund. Mr. Solms argued that tough measures and imposing budget discipline on profligate euro-zone members have been effective.
"All of these countries are now making progress," he told MDR television. "Even the Italians were forced to increase efforts to save and have adopted a debt limit in their constitution."
Senior coalition lawmakers are still hoping that at the end of the day the coalition will pull through.
"This is the fourth vote so far on euro rescue packages that I've been through and there has always been opposition, but we have always obtained a coalition majority," said Michael Meister, deputy chairman of CDU-CSU parliamentary group.
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