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President Gauck delays EU bailout approval

The Local · 22 Jun 2012, 08:15

Published: 22 Jun 2012 08:15 GMT+02:00

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Lawmakers are due to ratify both tools for fighting the eurozone's debt crisis on June 29 but the president's decision now undermines the European Stability Mechanism (ESM) bailout fund's planned entry into force on July 1.

The constitutional court earlier announced it would need up to three weeks to consider a threatened challenge by the far-left Linke party and would ask Gauck to postpone signing off on the legislation.

It came hours after a hard-fought accord was reached following weeks of wrangling between the governing centre-right coalition and main opposition, whose support Chancellor Angela Merkel needs to ratify the pact and rescue fund.

The German parliament must pass the draft laws on the fiscal treaty, a new European budgetary rule book, with a two-thirds majority, meaning Merkel needed to secure opposition backing.

The final compromise includes measures for growth and employment and backing for the introduction of a tax on financial transactions.

The government wanted to ratify both the fiscal pact and the ESM in one fell swoop before the start of the summer recess on July 6.

The ESM cannot come into effect without the ratification of Europe's biggest economy.

Story continues below…

Designed as a successor to the EU's current bailout fund, the ESM will have €500 billion to help struggling eurozone countries deal with the debt crisis.


The Local (news@thelocal.de)

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Your comments about this article

15:46 June 22, 2012 by Bushdiver
What he should also consider is throwing more money, especially at Greece is even worth the effort. With unemployment high, less and less tax money available, few exports how will Greece even be able to repay any of this money. The have to borrow more money just to pay the interest on the other money they have gotten already. It's time to wise up. Spain is next and Italy is not far behind.
16:50 June 22, 2012 by luckylongshot
That the German Government is even considering ratifying the ESM seems almost treasonous. Agreeing to put Germany on the hook to pay unlimited money for other countries financial mismanagement is both not allowed by the constitution and not in the interests of the German people. My hope is that the President delays signing off on this indefinitely.
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