BAILOUT FUND:GERMANY'S BUSINESS federations have warned that the euro will face unprecedented pressure unless MPs vote to expand the euro zone bailout fund next week.

Ahead of Thursday’s Bundestag vote, amid an increasingly bitter political debate, Germany’s four industry and employer federations joined forces yesterday to urge a “clear signal for Europe”.

“From industry’s point of view this is a responsible package of correct measures,” they said of the plan to expand the scope and scale of the EFSF bailout fund.

They acknowledged that the euro zone was facing “a dramatic endurance test” but insisted that the bailout fund was the only way to hold it together.

“We urge those of you with concerns to still give the Bill your vote.”

The letter was drafted by four business lobby groups including the federation of German industry, the German chamber of industry and commerce and the German employers’ association.

The bailout Bill is almost certain to pass parliament, thanks to the promised support of the opposition Social Democrats (SPD) and Green Party.

Yesterdays joint appeal was targeted at a growing number of MPs in German chancellor Angela Merkel’s own back benches. Reports put the number of rebels planning to vote against the European Financial Stability Facility as high as 30. The government can afford no more than 19 to ensure the Bill is passed by Dr Merkel’s own, so-called “chancellor” majority.

Falling short of that could call into question the German leader’s authority, and the future of the coalition government, halfway through its four-year term.

Government MPs, particularly in the struggling Free Democrats (FDP), are nervous about backing the plan that would push Germany’s financial guarantees for the €440 billion EFSF from €123 billion to €211 billion.

After a run of state poll disasters, support for the FDP is hovering around the 5 per cent hurdle for parliamentary representation. Analysts suggest that MPs in Dr Merkel’s junior coalition partner are unlikely to do anything next week to trigger an early election.

Nevertheless party rebels are pressing ahead with a campaign to force an internal party vote on the permanent bailout mechanism. Their aim is to force the party leadership to vote against the Bill when it goes before parliament early next year.

A public television poll yesterday showed that 70 per cent of Germans opposed further bailout measures.