German judges could hold the future of the eurozone in their hands

Court in Karlsruhe is expected to announce whether Germany’s participation in a permanent bailout fund is in line with the country’s constitution.

 for surprises. But its eight judges will never have felt their capacity for creating so much drama as in the run-up to a ruling they are due to deliver on Wednesday, and which could decide the future of the euroand even influence the world economy.

The court in Karlsruhe is expected to announce whether Germany’s participation in a permanent European bailout fund is in line with the country’s constitution, a decision that has Angela Merkel’s government on tenterhooks.

If the court rules in favour of the European Stability Mechanism (ESM) and the fiscal pact on countries’ budget limits, then debt-ridden countries like Spain and Greece will be able to be kept afloat as part of Europe‘s blueprint for tackling debt contagion in the eurozone.

If the court rules against the plan, Europe may find itself in turmoil, with markets likely to react with panic to a decision that would have the potential to topple the single currency.

A late legal challenge by a conservative member of the German parliament was rejected by the court on Tuesday, ensuring that the judges would stick to their original plan to deliver their long-awaited verdict on the bailout.

But most analysts agree that the judges, not wishing to go down in history as the court that brought down the German government, and the euro and plunged the world economy into gloom, are likely vote in favour of the bailout mechanism.

“I don’t think the court will strike down the ESM, because it wouldn’t like to be seen to be killing off the euro. Just as the German government doesn’t have the courage to do that, neither does the court. If it ruled that the government had adopted a wrong decision, it would cause a huge crisis of legitimacy in Germany,” said Gunnar Beck, an EU law expert at the School of Oriental and African Studies in London. “Never in the 60-year history of the court has there been an example of the court killing an essential piece of government policy.”


Categories: Europe, Germany

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