German Court Likely to Rule 'Yes, But' On Euro Bailout

Spiegel
July 6, 2011

Did the German government act lawfully by committing billions of euros to the bailout of Greece? The answer of the Federal Constitutional Court, which began hearing the case on Tuesday, will probably be 'Yes, but.' The judges are likely to grant parliament greater power in decision-making and perhaps even set an upper ceiling on any future rescue package.

The future of the euro is in the hands of the justices of the German Federal Constitutional Court, if the two sides of a legal battle over last year's bailout of Greece and establishment of a euro rescue fund are to believed.

Germany's highest court, based in the southwestern city of Karlruhe, began its deliberations on Tuesday with a public hearing on the legality of Germany's contribution to the bailout. A prominent Bavarian conservative politician, Peter Gauweiler, and a group of professors have mounted a legal challenge against Berlin's actions last year to help save the single currency.

They accuse the German government of breaching both the constitution and European law. They believe the aid paid for Greece and the contribution to the European Union's euro rescue fund was in breach of EU law, which stipulates that member states must not assume each other's debts.

"We appeal to the high court to put a stop to the actions of the European politicians in order to prevent us from falling into the abyss of a disintegrating economic and monetary union," declared one of the plaintiffs, Wilhelm Nölling, an economist and former president of the regional central bank for the city-state of Hamburg.

Countering the challenge, Franz Mayer, a professor of state law who is representing the German federal parliament, the Bundestag, said the court "has a responsibility for the future of the monetary union." The judges, he argued, "must leave room for future developments."

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