Merkel faces crucial test on EU bailout

German Chancellor Angela Merkel faces a battle for her political survival today when some
of her coalition, worried about bailing out Greece, could vote against her in parliament on euro-zone rescue schemes.

Germany is set to vote Thursday morning on whether to pass a bill on new powers for the European Financial Stability Facility. The EFSF, is a special purpose vehicle financed by members of the Eurozone to combat the European sovereign debt.

Some countries like Finland have ratified the bill but others, including Slovakia, are disputing it. Merkel needs 311 'yes' votes from her own bloc in the 620-seat Bundestag.

But dissent in her Free Democrat Partners coalition may force the German Chancellor to rely on opposition votes to pass the new powers for the 440 billion euro rescue fund.

Merkel has tried to assure the FDP that German taxpayers' money would not be wasted by voting a new bailout for Athens -- but she could not rule out that the money might be written off if, as financial markets increasingly fear, Greece defaults.

The chancellor has told Greece she wants to wait for the results of an audit by the "troika" of the European Union, European Central Bank and IMF – who visited Athens this week - to see whether its findings indicate a renegotiation of the bailout.

Sentiment on Germany’s pivotal role in the Eurozone debt crisis remains passionately divided in the country. Even though labour unions have called on MPs to back the measure, the conservative small business alliance have urged MPs to vote 'no'.

Moreover the opposition SPD and Greens have won a run of state elections this
year and, with two more votes in coming months on the second Greek bailout and a permanent mechanism to succeed the EFSF, can portray themselves as defenders of the single currency.