German Constitutional Court Rules in Favor of Euro Zone Bailout Fund, With
Conditions
Germany’s constitutional court on Wednesday gave Chancellor Angela Merkel a
significant victory in her bid to master the debt crisis that has buffeted
Europe for years and endangered its common currency, granting approval to one of
the key pillars of her strategy.
With the ruling, the 17 countries of the euro zone will be able to move ahead
with the establishment of the European Stability Mechanism, something like a
continental version of the International Monetary Fund. The mechanism will
handle bailouts and work in tandem with the European Central Bank to buy the
bonds of countries such as Italy and Spain that are straining under high
interest rates.
The court ruled that Germany could proceed with its contribution to the
mechanism with only limited conditions, including a requirement for
parliamentary approval of any increase in the agreed German contribution of 190
billion euros, or about $240 billion. While unlikely to still the crisis
entirely, a rejection could have unleashed new waves of instability on the
financial markets and thrown the fitful march toward European integration into
question as the architects of the rescue rushed back to the drawing board.
Read More:
http://www.nytimes.com/2012/09/13/world/europe/german-court-backs-euro-rescue-fund.html?emc=na
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