• Germany's news in English
 

Constitutional Court approves euro rescue

Published: 12 Sep 2012 10:29 GMT+02:00
Updated: 12 Sep 2012 12:33 GMT+02:00

"This is a good day for Germany, this is a good day for Europe," said Chancellor Angela Merkel in a speech to parliament after the keenly anticipated ruling.

In a landmark ruling watched around the world, the Constitutional Court overturned a raft of legal challenges aimed at preventing President Joachim Gauck from signing two crucial crisis-fighting tools into law.

Delivering a momentous decision with far-reaching implications for the euro's future, the eight scarlet-robed judges said Gauck could finally sign the European Stability Mechanism (ESM) and fiscal pact.

"The Second Senate of the Federal Constitutional Court has rejected the injunctions with the stipulation that a ratification of the ESM Treaty is only admissible if (certain conditions) can be guaranteed under international law," Chief Justice Andreas Voßkuhle said.

"Our examination has shown that the laws with a high probability do not infringe upon the German constitution. That is why we have rejected the injunction," he added.

The ruling came on a day of risks for the euro, which has enjoyed calmer times in recent weeks, as an anti-austerity party is seen likely to score big gains in Dutch elections and EU leaders unveiled plans for the first step towards a eurozone banking union.

It will come as an enormous relief to Chancellor Angela Merkel and her fellow European leaders as a rejection of the ESM would have triggered a fresh bout of chaos on financial markets and thrown the eurozone into a new political crisis.

The constitutional court specified that any financial burden for Germany arising from the ESM be strictly limited to its share of the fund's capital or €190 billion ($244 billion).

If the burden were to increase beyond that amount, then it could only be done with the express approval of the German parliament, and both the upper and lower houses must be kept fully informed, the court said.

The professional secrecy to which the fund's employees were bound "must not stand in conflict with the Bundestag and Bundesrat being comprehensively briefed," the statement said, referring to the lower and upper chambers.

The court also ruled that Germany must ensure a de-facto opt-out clause, if it felt its interests were not being considered.

"The Federal Republic of Germany must make it clear that it does not want to be bound to the ESM Treaty as a whole if any reservations it might have should prove ineffectual," Voßkuhle said.

The €500-billion ESM was set to replace the temporary European Financial Stability Facility (EFSF) and should have been in place by July 1.

But it needed Germany's share of the rescue money to function and had thus been held up pending the court ruling.

It is designed to come to the aid of debt-stricken countries such as Spain and Italy.

Technically, the court ruling was solely on whether to grant applications for temporary injunctions by eurosceptic politicians and groupings and delay ratification of both the ESM and the fiscal pact.

It will decide only at a later date whether the two are compatible with the German constitution, and that ruling could take several months yet.

Nevertheless, the court did provide some strong guidance as what that final ruling might look like.

The plaintiffs included the Left party, an initiative called More Democracy including 37,000 citizens and an outspoken critic from the Bavarian sister party of Merkel's conservatives, Peter Gauweiler.

They had argued that the ESM and the fiscal pact were incompatible with Germany's Basic Law because they irreversibly delegate national sovereignty to the European level and interfere with parliament's right to draw up budgets.

Moreover, this was all being decided without the necessary democratic backing, they complain.

But the court said such arguments were "unfounded". There was no such democratic deficit and the stability-orientated framework of currency union remained intact, it argued.

And "the possibility of setting up a permanent stability mechanism does not lead to a loss of national budgetary autonomy because the Bundestag has not yet transferred budgetary competence to organs of the EU or its institutions," it argued.

AFP/hc

The Local (news@thelocal.de)

Your comments about this article

11:01 September 12, 2012 by Zubair Khan
In current scenario a logical decision by the court. Will inject new blood to the sick body of euro zone countries. May also prove savior for the crippling Greece. Merkel Government must be relieved of immediate threat of Euro collapse.As a stop gap arrangement might be decision is OK and great but in the long run economists have to re examine their monetary and fiscal policies which are totally interest and capitalism oriented. These policies are not helping fair distribution of wealth and resources amongst needy human beings. Gap between haves and haves not is constantly widening. With such policies now danger can be avoided for indefinite time.
14:27 September 12, 2012 by delvek
In the long run, the EU is not possible. It remains incredible to me that the proping up with unaccounted funds continues.
16:53 September 14, 2012 by luckylongshot
Europe made a mistake agreeing to the Euro in the first place. It offered no obvious benefit as modern technology means trading in multiple currencies is not a problem. What it did was switch from a situation where the central bank could be forced to either give its profits to the state (America) or was owned by the state (Japan and China) to one where the Rothschilds benefit rather than European taxpayers.. Furthermore the Europeans are now on the hook in a very nasty game that seems to be heading towards taking control of countries away from elected officials and giving it to unelected bureaucrats. While I had hoped that the court would put a stop to more of this madness this was not the case and it was given a green light.

The last hope is that the people wake up to their looming enslavement and use their votes to put an end to it by electing anti Euro political parties
Today's headlines
July asylum applications hit 'all-time record'
An asylum seeker reception centre in Trier. Photo: DPA

July asylum applications hit 'all-time record'

More people applied for asylum in Germany in July than in any previous month on record, the Ministry for Immigration and Refugees announced on Friday. READ  

This Week in History
The 1,000s of Germans massacred after WWII
Germans fleeing from eastern Europe after the Second World War. Photo: Wikimedia Commons

The 1,000s of Germans massacred after WWII

Seventy years ago on Friday, a munitions depot exploded in the Czechoslovakian town of Ústí nad Labem. For the thousands of Sudeten Germans who lived in the town, the event was a death sentence. READ  

Minister seeks to rid laws of 'Nazi language'
In the center, Nazi lawyer Roland Freisler, who wrote laws that are partially still in existence today. Photo: German Federal Archive / Wikimedia Commons.

Minister seeks to rid laws of 'Nazi language'

Germany has made great efforts to purge legal system of remnants of Adolf Hitler's regime, but some laws still bear traces of the Nazi past. The Justice Minister wants to change this. READ  

Treason investigation of Netzpolitik halted
Netzpolitik published documents outlining the internal spy agency BfV's spy programmes and budget. Photo: DPA

Treason investigation of Netzpolitik halted

Update: Federal prosecutors announced on Friday they are suspending investigations of treason against 'digital rights' website Netzpolitik for 'the greater good' of upholding freedom of the press. READ  

Newborn baby found in Munich airport toilets
Munich Airport. Photo: DPA

Newborn baby found in Munich airport toilets

A newborn baby was found in a toilet in Munich airport on Thursday. Police so far have no clue as to who or where the mother is. READ  

Brit arrested in Munich for meth smuggling
Photo: BVZ/Zoll

Brit arrested in Munich for meth smuggling

A 50-year-old British woman is being held in custody in Munich on suspicion of attempting to smuggle two kilos of crystal meth out of Munich airport disguised as sweets. READ  

Start-up helps new Berliners slash red tape
Hate waiting in line at the Bürgeramt? There's a company that lets you pay to get the perfect appointment. Photo: DPA.

Start-up helps new Berliners slash red tape

Why waste time jumping through the hoops of German bureaucracy when you can pay someone else to take the hassle off your hands? A new Berlin company is offering to do just that - and it's got city officials fuming in the process. READ  

Michael Jackson shrine may have to beat it
A fan visits the makeshift Michael Jackson memorial in Munich. Photo: DPA.

Michael Jackson shrine may have to beat it

A memorial set up in Germany by some of Michael Jackson's most ardent fans the day after his sudden 2009 death has come under threat in a strangely emotional turf war. READ  

Ai Weiwei in Germany as UK slammed over visa
Chinese artist and dissident Ai Weiwei arrived at Munich airport on Thursday, greeted by his son and son's mother, filmmaker Wang Fen. Photo: DPA.

Ai Weiwei in Germany as UK slammed over visa

Chinese dissident artist Ai Weiwei arrived in Munich on Thursday on his first overseas trip since he was arrested nearly four years ago, after Britain denied him a six-month visa because he did not declare a supposed "criminal conviction" on his application. READ  

'Women-only' parking: sensible or sexist?
Regulations for women's parking spaces differ from state to state across Germany. Photo: JG-NF / Wikimedia Commons.

'Women-only' parking: sensible or sexist?

Frankfurt Airport is one of many places in Germany to offer women their own 'bigger and nicer' parking areas. Is this sensible practice or plain sexist? READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Sport
Germany star scores own goal with PR gaffe
Features
'Women-only' parking: sensible or sexist?
Politics
Satire and reality blur in parody party's strife
National
13-year-old boy detained for trying to join Isis
Culture
Berlin restaurant serves up Greek Crisis Menu
Rhineland
Doctor on trial after woman wakes in morgue
Society
Six odd things Germans do in the summer
Sponsored Article
Outsourcing drives Apreel's Europe growth
Society
Police bust kinky Bavarian couple over painful love-making
Politics
Merkel brings Palestinian girl to tears
Hamburg
Amateur archaeologist finds Nazi gold hoard
National
Could Merkel learn a lesson in love from this doppelganger?
Travel
Why you should stay in Germany for the summer holidays
Sport
German press tell Schweinsteiger 'good riddance'
National
Hamburg gets a bouncing 100kg baby girl
Society
In North Germany, money sometimes DOES grow on trees
National
Hero mechanics stop Bavaria shooting spree
International
Denmark says that border controls are coming
National
Did hackers take control of German missile battery?
Politics
Munich gives gay pride green light
Business & Money
Berlin rent controls hit prices hard
National
Fighting to breastfeed in public without shame
Society
Ice cream for dogs 'gobbled up in one gulp'
Education
Are hotpants a feminist issue?
Rhineland
Lion cub reunited with mother
National
How the heatwave is cracking Germany's Autobahns
International
Why the French are more sympathetic to Greece than the Germans
Sponsored Article
Crans-Montana: International expat hub
Gallery
Police seize pensioner's WW2 heavy weapons haul
National
How to survive the Europe-wide heatwave
Sport
Is Schweini already out of the door at Bayern?
Politics
How German media shaped the Greece crisis
National
Car assembly robot crushes worker at Volkswagen
Rhineland
Weathermen red-faced over heatwave snow warning
Society
An eye for an eye? Mum protects child in playground with pepperspray
National
As it happened: Queen Elizabeth's final day in Germany
National
As it happened: Queen Elizabeth's second day in Germany
National
Queen Elizabeth II's first day in Germany - as it happened
National
Bus passengers tell fake racists where to get off
Politics
What's really in the Queen's handbag?
National
Germans say USA doesn't respect freedom
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

7,196
jobs available
Toytown Germany
Germany's English-speaking crowd