German court clears euro bailout funds

Written by admin on 30/07/2019 Categories: 苏州美睫

Germany’s highest court has ruled that the European bailout fund, the ESM, is in line with the country’s constitution, throwing out numerous objections by eurosceptics.

苏州美睫

Confirming a preliminary ruling dating from September 2012, the Federal Constitutional Court said it saw no obstacles to Germany taking part in the 500-billion-euro ($A768.38 billion) European Stability Mechanism, set up to bail out troubled countries and their banks.

Nevertheless, in the ruling, presiding judge Andreas Vosskuhle insisted that it must be “the Bundestag (lower house of parliament) which retains sole responsibility over Germany’s public income and spending, even with regard to its international and European commitments.”

“As before, it is a matter of finding a way out of the crisis that is sustainable, realistic and has democratic and constitutional backing,” Vosskuhle said.

Throughout the eurozone turmoil since 2010, eurosceptics repeatedly asked the Constitutional Court in the southwestern city of Karlsruhe to rule on whether new EU crisis-fighting tools comply with Germany’s constitution.

The red-robed judges have always validated European decisions, or sent them to a European court, while reinforcing the German parliament’s right to be consulted.

The treaty establishing the ESM bailout fund contained an annex detailing this provision.

Germany’s share of the ESM bailout fund amounts to 190 billion euros, more than that of any other country. Germany was one of the last countries in the region to ratify the rescue fund, in late 2012.

There had been no suggestion the court – which Chancellor Angela Merkel has always had to take into account in her decisions on European policy – would deviate from the line it has taken so far.

In a ruling last month, the court for the first time passed a case up to the European level, the Luxembourg-based European Court of Justice (ECJ).

At issue was the European Central Bank’s OMT bond purchase program, which eurosceptics had argued overstepped the central bank’s mandate and was tantamount to printing money.

The Outright Monetary Transactions program theoretically allows the central bank to buy up unlimited amounts of sovereign debt of crisis-ridden countries.

The EU Commission in Brussels welcomed the German court’s move.

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