German lawmakers on Friday approved a government bill that would cement in law and extend curbs on speculative trading practices following the country's abrupt imposition of restrictions in May.
The bill — which the government said is aimed at speeding agreement on stronger European rules, but the opposition denounced as ineffective — passed parliament's lower house with the votes of Chancellor Angela Merkel's center-right coalition.
Germany's regulator in May banned so-called naked short-selling of euro zone government debt and major financial stocks, as well as naked credit default swaps involving euro zone debt.
The legislation, which now goes to parliament's upper house, would extend the ban to all stocks traded on German exchanges.
The abrupt initial ban rattled financial markets, with analysts saying unilateral action by one government suggested lack of unity in combating the market turmoil from Europe's government debt crisis.
Politicians and many others argue that markets' behavior worsened Europe's debt crisis. In Germany there have been increasing calls across the political spectrum for tougher regulation.
"I wouldn't call it going it alone, but going ahead," said Ralph Brinkhaus, a lawmaker with Merkel's Christian Democrats. "There are situations in which going ahead is necessary; we all saw (at the Group of 20 summit in) Toronto how difficult it is to obtain international consensus."
Government lawmakers maintained that Germany had helped push forward discussions in Europe. Last month, European Union leaders asked for EU rules to govern naked short-selling and credit default swaps.
Short-selling is a way of betting an asset will go down by borrowing securities and selling them in hopes of buying them cheaper later. Naked short-selling involves selling shares without first borrowing them.
Some market watchers say most such trading is conducted outside Germany. The government has conceded that its move effectively bans naked short-selling only of German and Austrian government debt.
"A ban must have some effect; this ban unfortunately has no effect," said Manfred Zoellmer of the opposition Social Democrats. The bill, he said, "is a placebo, it is ineffective and it is purely symbolic politics."
"Of course it's symbolic politics," Brinkhaus said. "Sometimes it's important, alongside facts, also to send signals."
Merkel's government remains under pressure to achieve tougher market regulation.
Finance Minister Wolfgang Schaeuble told lawmakers Friday that he would soon join with his French counterpart in calling on the EU's executive Commission to draw up proposals for a European financial market transaction tax after calls for a global deal fell flat at the G-20.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.