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View Full Version : German High Court Considers Euro Bailout



Large Sarge
9th June 2010, 01:43 AM
http://www.spiegel.de/international/germany/0,1518,699471,00.html

06/08/2010
Is the Rescue Package Constitutional?
German High Court Considers Euro Bailout

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Protesters in Athens: If Germany's highest court issues a temporary injunction on loan guarantees, it could push Greece to the brink.
A handful of challenges have been filed in Germany's high court against the 750 billion euro bailout package agreed to in Brussels. The government in Berlin argues the deal was a "political statement" and not a binding international agreement.

There are many who raised their eyebrows when the European Union agreed last month to create a €750 billion war chest to help prop up the euro. Many were concerned that it might violate EU rules on direct aid among member states.


In Germany, however, the package has attracted the attention of the country's highest court, the Federal Constitutional Court. It is currently considering whether to issue a temporary injunction against the country's contribution to the planned rescue package. If the court rules to issue the injunction, it could temporarily ban the government in Berlin from activating German credit guarantees -- at least until the court can rule on their legality.

SPIEGEL reported this weekend that Andreas Vosskuhle, president of the Karlsruhe-based Constitutional Court, sent a letter to the chancellor, her ministers, parliament, the German president, all state governments, as well as the European Central Bank and Germany's central bank, the Bundesbank, requesting statements addressing a request for a temporary injunction. The request was made by Peter Gauweiler, a member of the German parliament with the conservative Christian Social Union, the sister party to Angela Merkel's Christian Democrats.

His request hardly comes as a surprise. In 2009, Gauweiler filed a suit against the ratification of the Lisbon Treaty, which set the stage for wide-ranging European Union reforms, in what became a partially successful challenge. The court ruled that the German parliament must play a greater role in Germany's decision-making at the EU level -- a ruling that could have wide-reaching implications for future European integration.

Multiple Constitutional Challenges


Addressing Gauweiler's latest constitutional complaint, Berlin said that if the injunction is issued, it could directly result in a Greek bankruptcy. The government also stated that the euro rescue package agreed to by the EU member states in Brussels was "not a legally binding international agreement, but merely a political statement."

In addition to the complaint by Gauweiler, Constitutional Court officials have confirmed that three further cases have been submitted against the euro rescue package. At some point this week, German constitutional lawyer and financial expert Markus Kerber and his supporters also plan to submit a constitutional complaint. Kerber and his co-plaintiffs want the court to determine whether the German law passed by the Bundestag approving the euro bailout complies with the country's own constitution. The legislation covers Germany's share of the bailout, roughly €148 billion in credit guarantees.

Kerber and his supporters plan to challenge the rescue package's legality under both German rules as well as European law, and they would like to see the German Constitution Court also force the European Court of Justice in Luxembourg, the EU's top judicial body, to address whether the euro bailout is legal under European law.

dsl/spiegel