German MPs have voted in favour of more powers for the eurozone bailout fund, with 523 voting for, 85 against and three abstentions.
The vote before the Bundestag lower house on expanding the €440bn fund was also seen as a crucial test of Chancellor Angela Merkel's authority amid fears of a backbench rebellion.
Ms Merkel tried to assure her coalition 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.
International auditors returned to Athens today to deliver their verdict on whether Greece’s tougher austerity measures quality for further aid.
Ms Merkel 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 to see whether its findings “tell us we will have to renegotiate or not”.
Senior coalition figures like Economy Minister Philipp Roesler, head of Merkel”s Free Democrat (FDP) partners, have already said an “orderly” Greek default should not be taboo.
Meanwhile, Anglo Irish Bank chairman Alan Dukes said he believes Greece is headed for a crisis point similar to that in the Irish banking sector which resulted in the bank guarantee on 29 Sept 2008.
Speaking on RTÉ Raidió na Gaeltachta, Mr Dukes said that although political leaders in Europe were doing the right thing to tackle the eurozone crisis in some instances, their reactions were too slow and the lack of leadership had left the markets unconvinced of their absolute commitment to keeping the eurozone intact.
He said there was perhaps two weeks left in which to take decisive action on the Greek crisis, and that a failure to do so would result in far greater difficulties for the entire eurozone.
