Chancellor Angela Merkel and opposition parties agreed on Thursday on measures to promote growth in the European Union, paving the way for Germany to ratify the eurozone's permanent bailout fund and fiscal discipline pact.
The agreement strengthens Merkel's hand before a mini-summit on Friday of the eurozone's four largest economies in Rome.
The opposition said it had convinced Merkel to accept new funding at the European level which would inject more than 100 billion euros (130 billion dollars) into the economy.
They said Berlin would be supporting issues of "project bonds" by the European Union to build phone and power lines, extended lending by the European Investment Bank and the diversion of existing EU funds to promote growth.
"This will amount to a sum in the triple-digit billion range over the next four years," said Juergen Trittin, parliamentary leader of the Green Party.
"This will be passed as a cabinet resolution," said Sigmar Gabriel, the Social Democratic Party leader. "It's not a solution to the crisis in Europe, but a position in crisis management that can win us time."
The German government also promised to seek a eurozone financial transaction tax without waiting for all 27 EU nations to agree.
"We've agreed that if it can't be done among the 27, then we'll assemble a coalition of the willing of at least nine states," said Steinmeier.
"It will have teeth, and as far as the timing is concerned, will be tackled immediately," said Green co-leader Cem Ozdemir. "The government has now given up its austerity-only policy," he added.
Volker Kauder, parliamentary chief of Merkel's Christian Democratic Union, stressed that after "difficult talks" conservatives were able to repel demands from the centre-left to unify eurozone government debt.
Kauder said proposals to set up a mutual fund to pay down debt that exceeded 60 per cent of the 17 eurozone nations' gross domestic product would have breached the German constitution.
"That was why they were not agreed to," he said.
The agreement, reached during talks at Merkel's office in Berlin, clears a potential obstacle to Germany ratifying the European Stability Mechanism (ESM) and fiscal compact in a vote on June 29.
A two-thirds majority in the Bundestag, the lower chamber of parliament, is needed to ratify the ESM and fiscal compact. Only the opposition Left Party is expected to reject the bills.
"It would have been a fatal signal to the financial markets if the strongest nation in the European Union had not been able to pull itself together and obtain the two-thirds majority," said Rainer Bruederle, legislative leader of the pro-Merkel Free Democrats (FDP).
The 500-billion-euro ESM is scheduled to be set up next month to help out struggling nations. The fiscal pact, a keystone of Merkel's policy, will commit 25 of the EU governments to cap deficits.
Merkel still needs to obtain the assent of the 16 German states to the bills before they go to a vote on June 29.
"We assume the states will agree when we meet with them on Sunday," Kauder said.
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