EUROPE’S lumbering efforts to end a widening sovereign-debt crisis became more cumbersome as the German parliament wielded new veto powers that allow lawmakers to block moves by Chancellor Angela Merkel to make that commit taxpayer money to new bailouts.

    Passage of a resolution by Germany’s budget committee drew the lines Friday within which Merkel must remain when she negotiates with European leaders at a summit yesterday and adds a new dimension to European power politics.

    The resolution requires Merkel to reject any deal on the European Financial Stability Facility (EFSF), that would grant the euro zone bailout fund a banking license and allow it to borrow money from the European Central Bank (ECB).

    Merkel must also reject any deal that would expand German guarantees pledged to the 440- billion-euro (US$610 billion) fund that go beyond current German pledges of 211 billion euros.

    “Any model transforming the EFSF into a commercial bank or increasing the fund’s financing through the ECB is ruled out,” the resolution states. “In particular, the EFSF must not receive a banking license.”

    The vote came as euro zone finance ministers were meeting in Brussels on Friday ahead of the summit yesterday at which leaders attempted to bridge a widening gap within the 17-member currency bloc over how to respond to a sovereign-debt crisis that threatens to engulf the region’s weaker economies and banks.

    The ministers agreed to release the next tranche of financial assistance for Greece, and the payment will be made in early November, pending approval by the International Monetary Fund. The decision opens the way for the payment of 8 billion euros to Greece. (SD-Agencies)