BRUSSELS — The German government backed a $1 trillion rescue package for Europe’s troubled currency as European Union officials readied tougher oversight over budgets and economies of most member countries in an effort to contain the region’s troubling debt crisis.
The startling size of the EU package, agreed on early Monday, initially lifted the euro and stock markets, but by Tuesday the euphoria had ebbed on concerns that simply making more loans available didn’t address the crippling levels of government debt in countries such as Greece and Portugal.
The euro slipped to $1.2670 in European trading — down from $1.2804 in New York late Monday.
Germany, Europe’s richest nation which only reluctantly backed the deal, has demanded that Greece and other countries that use the euro must make sharp spending cuts to curb runaway deficits and public debt in return for financial help.
The Greek debt tragedy has become Germany’s burden because Berlin will provide the largest chunk of the euro-zone rescue package available to all countries if they need it — at least 123 billion euros — and a separate bailout for Greece agreed on earlier that did little to halt the crisis. Germany’s share of that is 22.3 billion euros.
The idea of shouldering the debts of less thrifty countries is unpopular with frugal German voters who showed their disapproval of Chancellor Angela Merkel by voting her party out of power in a key state election Sunday.
