The German highest court rules rescue packages for other eurozone nations and Greece bailout are legal, but German parliament must raise voice in future deals on providing aid to indebted euro-zone member states.

Germany’s Constitutional Court has rejected a series of lawsuits aimed at blocking the country’s participation in bailout packages for cash-strapped debt stricken Eurozone countries. The judge of highest court stated that parliament may not approve any deal that leads to a pooling of national debt. In a tensely anticipated judgement, the German Federal Constitutional Court moved on Wednesday morning to reject several legal complaints that had been filed against Germany’s participation in massive efforts to prop up the European common currency Euro. The court did say the German parliament should have a bigger say in future rescue proposals to those countries in need.

Judges at the country’s most senior court, sitting in Karlsruhe, said the German government must seek the approval of the parliamentary budget committee before granting any funds for aid.The court determined that the billions of Euros in aid provided by Germany in capital and guarantees to highly indebted partner countries in the European Union to shore up the euro had been constitutional. At the same time, the court stipulated that the German federal parliament, the Bundestag, needs to be given a greater say in future bailout measures. Presiding Judge Andreas Vosskuhle said the verdict “should not be misinterpreted as a constitutional blank check for further rescue packages.”

Highest German Court : German Parliament to approve aid packages to Euro countries

The Constitutional Court, based in Karlsruhe, western Germany, was responding to a challenge brought by six leading German Eurosceptics. In a landmark ruling, eagerly anticipated by jittery financial markets, the court stated all “large-scale” future aid packages must be approved by the parliament’s budget committee. The judges ruled that aid package resolutions cannot be automatic and may not violate on the decision-making rights of German parliament. Aid packages have to be clearly defined, and members of the German parliament must be given the opportunity to review the aid and also stop it if needed, the ruling said. “The government is obligated in the cases of large expenditures to get the approval of the parliamentary budget committee,” Vosskuhle said. The court said that check and balance was needed to ensure parliament retained its sovereignty over the budget, which it described as a “fundamental element” of democratic self-determination.

German Chancellor Angela Merkel responded to Germany’s constitutional court ruling on euro-zone rescues in confirming the government’s European policy. But in reference to Greece, she said a change to the European Union’s treaty shouldn’t be ruled out to ensure that problems in one country don’t endanger the entire euro zone.

The court earlier Wednesday had ruled constitutionally legal a 2010 bailout for Greece and subsequent aid to others granted through the euro-zone rescue fund. But it required that future euro-zone aid needs prior approval by the budget committee of the Bundestag, the German lower house.

German Chancellor Angela Merkel : ”Euro cannot and will not fail”

“The Federal Constitutional Court this morning [Wednesday] absolutely confirmed [our policy],” Merkel told parliament during a budget debate. She added the court called for solidarity linked to responsibility and an “absolute participation of parliament.” “That is exactly the path we have been taking,” Merkel continued.

Euro is more than a currency for the European Union. If Euro should fail, so fail the Union, German Chancellor Angela Merkel warned. ”Euro cannot and will not fail” she added.

Merkel : How can a tiny economy like Greece put EURO in danger ?

Merkel cautioned that the latest news from Greece is far from being satisfactory and that Greece should be urged to build transparent structures. A country like Greece, which only represents 2% of the euro zone’s gross domestic product, shouldn’t be able to put the entire currency in danger, she offered.

“There is no mechanism in the Lisbon Treaty to force those to keep the Euro Zone’s Stability and Growth Pact who can’t do it, or don’t want to do it,” Merkel stated. Striving for a stronger Europe, changes to the EU treaty shouldn’t be a taboo, she finished her comments.

 

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