Estonia approves EU permanent bailout fund

(TALLINN) - The eurozone's newest member, Estonia, on Thursday approved the EU's European Stability Mechanism (ESM), a massive rescue fund for struggling member states.

Fifty-nine Estonian lawmakers, mostly from the Baltic state's centre-right government camp, voted in favour of the ESM. The 34 who cast ballots against were largely from the left-leaning opposition.

Worth 500 billion euros ($625 billion), the ESM was created to replace the temporary EFSF fund that was hurriedly established to help debt-strapped countries and prevent contagion across the single currency region after Greece's first bailout.

The two funds are to run in parallel until the middle of next year.

With 1.3 million people, Estonia is one of the smallest members of the 17-nation eurozone, having adopted the currency in January 2011.

It has long been known for a conservative fiscal stance that has helped it achieve to the lowest debt level in the European Union, which the former Soviet-ruled republic entered in 2004.