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Bail-out fund approval

GERMAN Chancellor Angela Merkel's cabinet has approved new powers for the eurozone's bail-out fund.

However, Ms Merkel faces challenges ahead to convince her party sceptics to back efforts to contain the crisis.

Eurozone leaders last month agreed to boost the effective size of the EFSF to €440 billion and give it extra powers, including a potential role in helping to recapitalise banks.

Separately, the President of the European Commission, Jose Manuel Barroso has said that the EU will push for a tax on financial transactions at the G20 summit in France in November.