Germany’s highest court ruled on Tuesday that the country’s
government may participate in a fund set up to help financially stricken
countries in the euro zone.
The decision is a defeat for skeptics of the euro and removes lingering doubts about whether Germany will contribute resources to a rescue fund that has been crucial to the survival of the euro zone.
The decision by the court, the Federal Constitutional Court in Karlsruhe, to dismiss challenges to the country’s participation in the fund was expected after the court issued a preliminary ruling in 2012. That ruling allowed Germany to contribute to the fund, called the European Stability Mechanism, provided that the German Parliament was consulted on any commitment above 190 billion euros, or $264 billion.
The decision on Tuesday removes any uncertainty about whether Berlin will continue to contribute to the fund, which has a lending capacity of €500 billion and would not be credible without the support of Germany, the euro zone’s largest and richest member.
In a unanimous decision, the eight judges who considered the case said that it was up to Parliament, which approved Germany’s participation in the fund by a large majority, to decide about the risks and benefits of such commitments.
Read more: German Court Validates Participation in Euro Zone Bailout Fund - NYTimes.com
The decision is a defeat for skeptics of the euro and removes lingering doubts about whether Germany will contribute resources to a rescue fund that has been crucial to the survival of the euro zone.
The decision by the court, the Federal Constitutional Court in Karlsruhe, to dismiss challenges to the country’s participation in the fund was expected after the court issued a preliminary ruling in 2012. That ruling allowed Germany to contribute to the fund, called the European Stability Mechanism, provided that the German Parliament was consulted on any commitment above 190 billion euros, or $264 billion.
The decision on Tuesday removes any uncertainty about whether Berlin will continue to contribute to the fund, which has a lending capacity of €500 billion and would not be credible without the support of Germany, the euro zone’s largest and richest member.
In a unanimous decision, the eight judges who considered the case said that it was up to Parliament, which approved Germany’s participation in the fund by a large majority, to decide about the risks and benefits of such commitments.
Read more: German Court Validates Participation in Euro Zone Bailout Fund - NYTimes.com
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