The Euro Zone is relieved. Germany’s Constitutional Court ruled in favor of the Euro Rescue Fund – European Stability Mechanism (ESM). However the judges limited Germany’s fund liability up to 190 billion euro unless the German Parliament decides to make more funds available. The court said that condition for allowing the ESM-ratification was that any increase in German liability beyond 190 billion euros must first be approved by the Bundestag lower house of parliament. And that ESM decisions must be submitted to both houses of parliament for approval, rejecting a confidentiality clause in the treaty.
Germany’s Constitutional Court has dismissed a complaint against the proposed European rescue fund, the European Stability Mechanism.
The decision, which was months in the making, clears the way for the introduction of the ESM, which is due to become operational in October. The ruling included conditions to limit Germany’s liability under the fund.
In Germany’s biggest ever constitutional challenge, some 37,000 citizens had tried to block the fund, claiming it violated the country’s right to retain control of its own budget.
The citizens, who backed a legal push from “More Democracy” movement, claimed the mechanism could expose the country to unlimited demands for taxpayer money. They wanted a referendum to decide the issue.
Supporters of the rescue fund, including Chancellor Angela Merkel, said it was a vital part of measures to prop up ailing European economies and avert the collapse of the euro. (Full Article CNN)