• Germany's news in English
 

Constitutional Court mulls euro bailout fund

Published: 10 Jul 2012 11:56 GMT+02:00

Those who filed a challenge at the court, hoping to prevent Germany joining the European Stability Mechanism (ESM), say it would severely undermine German sovereignty by transferring too much power to European institutions.

Former Justice Minister Herta Däubler-Gmelin headed an application signed by 12,000 private individuals, while a group of professors also submitted a complaint - as did both conservative and far left politicians.

The ESM is different from other euro rescue plans as it would set up a permanent fund of €700 billion - 27 percent of which Germany would provide.

The fiscal compact accompanying it limits the amount of money different states could borrow, and set out how those which borrowed too much could be punished.

Opponents say this permanence would undermine the ability of German politicians to make budgetary decisions. A handful of demonstrators assembled in front of the court in Karlsruhe on Tuesday morning, symbolically carrying a copy of the constitution to the grave.

But the fact that the court is taking its time to consider the ESM – putting its ratification on hold – has infuriated many politicians who have been urging the judges to decide in its favour. Some have been warning of dire consequences for the entire continent should the court stop the rescue measures.

Desperate for progress

Normally politicians refrain from commenting on the court’s work as a sign of respect for its importance and independence, so this abandonment of normal practice shows how desperate some are to see the euro rescue progress.

Justice Minister Sabine Leutheusser-Schnarrenberger was even moved to warn colleagues against trying to pressure the court. “Government and politicians should keep absolutely out of this – the Constitutional Court does not need any advice,” she told Tuesday’s Augsburger Allgemeine newspaper.

“The judges know the significance their decision will have for the economy,” she said.

Free Democratic Party MEP Alexander Count Lambsdorff had criticised the court for not knowing enough about European institutions to be capable of making a decision. He was echoing Social Democrat Martin Schulz, president of the European Parliament, who last week said some of the court's verdicts were “characterised by great ignorance.”

Parliamentary president Norbert Lammert, of Chancellor Angela Merkel’s Christian Democratic Union (CDU) warned at the weekend of grave consequences should the ESM and fiscal pact not succeed. “That is why I have no doubt that the Federal Constitutional Court will include this context in its judgement,” he said.

Former Chancellor Helmut Schmidt even entered the fray, calling last week for the court to rule in favour of the measures.

Opening the proceedings on Tuesday morning, presiding Constitutional Court judge Andreas Voßkuhle said, "Europe needs democratic constitutional states just as democratic constitutional states need Europe."

He said the court would not examine the constitutionality of the ESM and fiscal pact, but only decide whether to ask the president to delay signing the law pending a closer examination - which would cause significant hold-ups. The court is expected to issue a ruling by the end of this month.

ESM and Fiscal Pact

The ESM was supposed to start operation in July, but its launch depends on ratification from enough eurozone states to ensure that 90 percent of its €700 billion capital is covered. Until now 13 of the 17 eurozone states have ratified their participation.

The Estonian constitutional court is checking the treaty, while the Italian and Maltese parliaments have yet to decide. Because Germany is due to contribute 27 percent of the capital, it effectively has a veto on whether it happens.

The fiscal pact, which obliges those who sign it to balance their budgets and reduce national debt, was signed by 25 of the 27 European Union countries in March – UK and Czech Republic stayed out of it.

It has to be adopted in national law, and needs at least 12 eurozone countries to ratify it before it can take effect – which is planned for at least the start of 2013. Five eurozone countries have ratified it - plus Denmark, Lithuania, Latvia and Romania.

DPA/DAPD/AFP/The Local/hc

The Local (news@thelocal.de)

Your comments about this article

13:19 July 10, 2012 by JDee
If they allow the ESM it is the end for the rule of law in Germany. Weren't these instiutions founded to prevent there being another DDR or Nazi coup? Morally and legally, if they don't apply the rules then no one should feel obliged to pay taxes or respect the German government. In fact the correct moral decision may be to withhold paying taxes in order to bring a change in the political system.
14:28 July 10, 2012 by Leo Strauss
The Thin Red Line :)

@JDee

Good post.
17:23 July 10, 2012 by chicagolive
Some are you guys are daft, really look around Germany is only at this point because of the euro at the beginning they where the PIIGS rolled up in one. Germany openly said screw the rules and did what they wanted doing that time period now that others are doing the same as them the government crys foul. Many of you don't realize if deeper EU power intergration does not happen the problems will only keep manifesting deep and deeper and make it harder the next time(and their will be one very quickly)to manage and everybody will be screwed.
Today's headlines
Sudeten Germans give up 'right to homeland'
Sudeten Germans practising traditional dance at a gathering in 2014. Photo: DPA

Sudeten Germans give up 'right to homeland'

The Sudeten German Homeland Association has given up its claim to the group's former home in parts of the Czech Republic, quieting one of the final echoes of the Second World War. READ  

Minister draws fire over wage transparency plan
Families Minister Manuela Schwesig. Photo: DPA

Minister draws fire over wage transparency plan

Families Minister Manuela Schwesig confirmed on Sunday that she wants a new law allowing women to compare their wages with men doing similar work, provoking angry reactions from employers. READ  

Police wind down Bremen terror response
Heavily-armed police on patrol outside Bremen cathedral. Photo: DPA

Police wind down Bremen terror response

Police in Bremen said that the risk of a terrorist attack had been reduced in the city after they arrested two suspected arms dealers. The city remains under high alert, with special protection for the Jewish community. READ  

Germany's Schäuble softens Greece tone
Photo: DPA

Germany's Schäuble softens Greece tone

German Finance Minister Wolfgang Schäuble said Sunday Greece's new hard-left government needs "a bit of time" but is committed to implementing necessary reforms to resolve its debt crisis. READ  

UK Pegida rally dwarfed by counter-demo
Photo: DPA

UK Pegida rally dwarfed by counter-demo

An estimated 375 people turned out for the Germany-based PEGIDA movement's first demonstration in Britain on Saturday, but were outnumbered by a 2,000-strong crowd of counter-protesters, police said. READ  

Greek PM vows to 'start working hard' after vote
Photo: DPA

Greek PM vows to 'start working hard' after vote

Greek Prime Minister Alexis Tsipras vowed Friday to "start working hard" to implement vital reforms in the stricken eurozone country, after Germany's parliament approved a four month extension to its bailout. READ  

Ukraine: troop deaths 'serious breach' of truce
Photo: DPA

Ukraine: troop deaths 'serious breach' of truce

Ukrainian President Petro Poroshenko declared the killing of three government troops by pro Moscow rebels a "serious breach of the ceasefire", during a telephone call Friday with German Chancellor Angela Merkel, her office said. READ  

Man wins court battle over loud footsteps
Trouble at the top. Photo: DPA

Man wins court battle over loud footsteps

Germany's highest civil court ruled in favour of a man who swapped the carpet in his new apartment for parquet flooring, incurring the wrath of the retired couple who lived below him over his loud footsteps. READ  

Teachers to strike nationwide from Monday
Photo: DPA

Teachers to strike nationwide from Monday

Teachers all over the country are expected to stike starting Monday, German education trade union GEW said, after negotiations with the wage commission of the federal states (TdL) failed to achieve results. READ  

EU court deals blow to US Iraq objector's hopes
Andre Shepherd at the European Court of Justice in June 2014. Photo: DPA

EU court deals blow to US Iraq objector's hopes

American soldier Andre Shepherd, who applied for asylum in Germany as a conscientious objector against the war in Iraq after going AWOL from his unit, saw a judgement by the Court of Justice of the European Union (CJEU) go against him on Thursday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Features
Kafka: puzzling translators 100 years on
Business & Money
France or Germany: Which country really is the best country to work in?
Photo: Police
Rhineland
Student driver crashes tank into family garden.
Photo: DPA
Politics
There was a notable absence at the Anti-Semitism Commission
Sponsored Article
Tourist or lifer: what sort of expat are you?
National
How Dresden bombing still divides Germany, 70 years on
Sponsored Article
Are you an American expat? How to face FATCA
Photo: DPA
Gallery
Take a cute break with this gallery of baby animals
International
What's keeping UK expats from voting?
Photo: DPA
National
Terror alert at a new high. Should you be worried?
Gallery
The best regional foods TTIP opponents want to protect
Photo: DPA
Features
All you ever needed to know about Pegida
Photo: Shutterstock
Culture
This cosplayer did not think his plan through
National
Europe in statistics - from Spain to Sweden
Gallery
Top 12 German idioms
Culture
10 top tips for partying in Germany
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,199
jobs available
Toytown Germany
Germany's English-speaking crowd