Czech parliament approves EU rescue fund

(PRAGUE) - Czech lawmakers Tuesday approved the European Stability Mechanism (ESM), the European Union's permanent rescue fund created to help struggling eurozone countries deal with a crippling debt crisis.

The ESM, with core funds of 500 billion euros ($624 billion), was backed by 140 lawmakers of 189 present in the 200-seat Czech parliament.

Ardent euro-sceptic Czech President Vaclav Klaus still has to endorse the vote for the process of Czech approval to be complete.

The ESM will be formally launched in July and will run in parallel with the temporary European Financial Stability Facility for one year.

The Czech Republic has pledged to join the single currency union under its 2004 EU entry terms but its current centre-right government has said this will not happen during its term ending in 2014, given the eurozone crisis.

Earlier this year, the Czech Republic and Britain refused to join the 27-member EU's so-called fiscal compact designed to ensure greater economic integration across the bloc by setting agreed deficit and other targets, alongside penalties for failing to meet them.