What's at Stake in the Euro Rescue Fund Ruling?

Spiegelonline ^ | 9/11/2012 | David Böcking

[bruinbirdman]

Germany's highest court is expected to rule on the constitutionality of the permanent euro bailout fund on Wednesday. Opponents of the European Stability Mechanism are hoping justices will decide it can only go into operation if a national referendum is held and the constitution is changed.

The Eurozone devalues Europe

Sometimes it is the parachute itself that can become the danger -- if the lines get tangled, for example. If that happens, a parachutist can release the device and activate a backup instead.

More than 37,000 people in Germany view the permanent euro rescue fund, the European Stability Mechanism, as a similar kind of danger. They are backing the group Mehr Demokratie, or "More Democracy," in its lawsuit at the Federal Constitutional Court against Germany's ratification of the treaty that establishes the ESM. The petitioners believe that the aid mechanisms for crisis states, as well as the associated fiscal pact, are undemocratic and entail uncertain financial risks. They are hoping the court's decision on Wednesday will pull the ripcord on the ESM and prevent it from going into operation.

It's not the first time Germany's efforts to save the euro have been challenged in the country's highest court, either. Another suit brought to Karlsruhe last year unsuccessfully challenged the constitutionality of financial aid for Greece and the European Financial Stability Facility (EFSF), the ESM's predecessor. The broad ideological spectrum of the appellants alone is indicative of growing anxiety over the euro bailout. Those backing the case run the gamut from Mehr Demokratie to the Left Party, right up to Peter Gauweiler, a conservative politician with the Christian Social Union, Bavarian sister party to Chanceller Angela Merkel's Christian Democratic Union.

Gauweiler landed in the headlines again this weekend when he filed a second emergency complaint with the court

[bruinbirdman]