Skip to comments.EU: German court delays eurozone's €500bn bail-out fund
Posted on 06/22/2012 1:14:05 AM PDT by bruinbirdman
Germany's constitutional court has delayed the creation of a new 500bn eurozone bail-out fund as Angela Merkel faces a series of legal challenges to measures seen as critical for saving the EU's single currency.
The legal block is embarrassing for the German Chancellor who expended large amounts of political capital in concessions to get the Social Democrat and Greene opposition to support the European Stability Mechanism (ESM) so it could enter into force on 1 July.
The ESM is urgently needed to fight European debt contagion over the summer and is Germany's preferred option for a bailout of Spanish banks because it is more secure for lenders than the existing, smaller eurozone fund, the EFSF.
Germany's parliament will ratify the ESM and the fiscal pact on 29 June after Chancellor Merkel was forced to offer the opposition new spending on growth and her full backing for a eurozone financial transaction tax in return for its support.
But in a humiliating setback on Thursday, judges in the Bundesverfassungsgericht, the country's constitutional court ruled that they would need "at least three weeks" to consider the "complex" ESM's legality after the vote and before it was signed Joachim Gauck, the German President.
"We assume that the president will, as he has done before, comply with this request, and that the court will therefore have enough time to conduct an examination," said a spokesman for the court, which is based in Karlsruhe.
Norbert Barthle, a senior Christian Democrat MP, expressed concern at the delay. "Given the critical situation in Europe at the moment, you don't need much imagination to figure out how things would develop if we had a still-stand for several months," he said.
The constitutional court is expected to eventually clear the ESM because the Bundestag parliament has an effective veto over
(Excerpt) Read more at telegraph.co.uk ...
The initial maximum lending volume of the ESM is set at EUR 500 000 million, including the outstanding EFSF stability support. The adequacy of the consolidated ESM and EFSF maximum lending volume will, however, be reassessed prior to the entry into force of this Treaty. If appropriate, it will be increased by the Board of Governors of the ESM, in accordance with Article 10, upon entry into force of this Treaty.So, there is going to be a new board of Eurocrats that has more or less direct access to Germany’s funds. When it decides that Germany has to shell out another 500 billion Euros, they can simply order the payment henceforth. And of course, as all things related to the EU, all this will happen “irrevocably and unconditionally.”
The authorised capital stock shall be EUR 700 000 million.
ESM Members hereby irrevocably and unconditionally undertake to provide their contribution to the authorised capital stock, in accordance with their contribution key in Annex I. They shall meet all capital calls on a timely basis in accordance with the terms set out in this Treaty.
The Board of Governors may call in authorised unpaid capital at any time and set an appropriate period of time for its payment by the ESM Members.
The Board of Directors may call in authorised unpaid capital by simple majority decision to restore the level of paid-in capital if the amount of the latter is reduced by the absorption of losses below the level established in Article 8(2), as may be amended by the Board of Governors following the procedure provided for in Article 10, and set an appropriate period of time for its payment by the ESM Members.
The Board of Governors shall review regularly and at least every five years the maximum lending volume and the adequacy of the authorised capital stock of the ESM. It may decide to change the authorised capital stock and amend Article 8 and Annex II accordingly.
The constitutionality of this treaty is very much in doubt. Should it pass, anyway, and German citizens realize what the traitors in the Reichstag have done, all hell will break loose.
Absolutely. It is ironic that the EU "peace project" appears to mimic each and every faulty economic and political policy of the 1930s.
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