Germany, Country Bailout | featured news

Germany's lower house of parliament voted overwhelmingly on Thursday to grant Cyprus a 10 billion euro bailout that is designed to avert bankruptcy for the tiny Mediterranean island nation and keep it in the euro zone.

German Chancellor Angela Merkel will make her first visit to Greece next week since the euro zone debt crisis erupted, in a show of support for Athens after it said it will run out of money at the end of November without fresh international aid.

Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday. The latest twist in the euro zone's three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue program that would trigger European Central Bank buying of its bonds.

Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion) if its borrowing costs remain unsustainably high, a euro zone official said.

The euro zone may raise the combined lending power of its bailout funds to close to 700 billion euros from 500 billion in a trade-off between German opposition to committing more money and calming markets, euro zone officials said.

Greece must surrender control of its budget policy to outside institutions if it cannot implement reforms attached to euro zone rescue measures, the German economy minister was quoted as saying on Sunday.

The leaders of Germany and France, the eurozone's two biggest economies, say they have reached agreement on strengthening Europe's shaky banking sector.