German court rejects challenge to eurozone bailouts

[Gerald]

The BBC's Gavin Hewitt said the ruling will limit Chancellor Angela Merkel's ability to make an immediate response to a crisis in the future.

Germany's highest court has rejected a challenge to the country bailing out other nations in the eurozone.

The Constitutional Court was responding to a challenge brought by six prominent German Eurosceptics.

But the court did say the government must seek the approval of the German parliament before providing future assistance.

This could further hinder Europe's response to the debt crisis, already criticised as too slow.

German Chancellor Angela Merkel said the high court's decision vindicated her government and said that the existence of the euro meant more than just a common currency.

"The euro is the guarantor of a unified Europe," she told lawmakers. "If the euro collapses, Europe collapses."

'Not blank cheque'

As Europe's largest and most robust economy, the German decision has implications for the whole region.

The presiding judge, Andreas Vosskuhle, said German lawmakers should be more involved in future bailout decisions.

"The government is obligated in the cases of large expenditures to get the approval of the parliamentary budgetary committee," Mr Vosskuhle said.

But it was not a "blank cheque for additional rescue packages," he added.

http://www.bbc.co.uk/news/business-14817440


Note: 7 September 2011 Last updated at 10:21 GMT

[Skybird]

Didn'T I say the court would not have the guts needed? Some points one needs to know.

The president of the constitutional court is a confessing, publicly propagating follower of a concept of a "United States of Europe". He is an outspoken believer in a big, socialist Eurpoean federal state. He pushes this opinion in his lectures at university, and media. Thus, the impartiality of a court under his chairing must not be taken as granted, to put it mildly.

Next, the court and its president said on the first day of the hearing over the charges that the court deliberately rfefuses to consider the financial implications of the bailout mechanisms at issue, and that it explicitly refuses to weigh the numbers and what they would mean for Germany'S economic and social future. In other words, the key and heart of the file that was brought forward by the critics, was already rejected to be taken into account in the forweord before the hearing even began on the first day. Becasue that was what the critics were about: that the finacial result of the guarantees given by Germany would crush the freedom of the government and the parliament to act and to form political decisions when being buried under a load of debts Germany has to take up additional to those it already have if the guarantees for the bailouts would be called up for and Germany needs to pay.

The constitutional court thus has dem onstrated its willingness to give up its indepednece from the poltical will of the government, but has instrumentalised itself to realise this will by explicitly hindering legitimate and serious financial facts of utmost vital importance being heared and considered.

Of course, as I dsaid some weeks ago, nothing else was to be expected. The only worse scenario would have been if the court would have handed over the case to a european court from beginning on.

One little bit we have gotten, that is the call for more parliamentary participation in decisions over future bailouts. However, this demand, although currently it reduces the likelihood that there ever will be something insane like "Eurobonds" to almost nill, is on head-on collion course with the implications and forum lations of the treaty draft for establishing the ESM, wehre right this parliamentary control is ruled to be invalid, becasue signing nations must opbey the calls of the ESM within 7 days withoiut having any legal basis to reject, to ask, to criticise, or to discuss. It remains to be seen what will come of this. But the German government in the past three years have sold plenty of toiugh words in Germany, just to give up and obey French and EU demands when negotiating in Brussel.

The coalition government is almsot in ruins over here, and Merkel possibly will not gain a majpority by her parties for accepting the next bailout phase that will be decided on later this mon th. However, she will habve a majority still, becasue many of the opposition parties (Greens, Socialists), are very happy with a socialist debt-sharing in Europe and are eager to establish such a mechnaism, so while Merkel will maybe not have a majpority by her own coalition, she nevertheless is most liekly set tpo get a parliamentary majority anyway. But it will weaken the reputation of her government even more.

At ölast federal elections, her coalition partner FDP, the Free Libertarians, got 17%. At the state election this weekend in Mecklenburg Vormpommern, they had fallen to a shabby 2.7% and did not m,ake it into parliament - even the NPD got 2.5 times as many votes as the FDP. It is the coninuing of a trend that sees the Libertarians in free fall since three years. Part of their problem is the causa Westerwelle and his hilarious positions over Libya. The other part is that the Libertarians were unable to prevent the bailouts signed so far. Merkel simply kills the FDP, and has eroded the CDU as well of all economic and social and cultural conservatism and former names representing it. She rules by broken proimises, broken rules, and total arbitrariness, in the end her policy stands - for nothing but remaining in power, no matter what.

Bads news is, the alternmative - a government formed by the Greens and Reds, would be as bad, if not worse. There simply are no acceptable options left in Germany, not even foul compromises.

Which maybe is a sign for the system itself heading for collapse, since it is too unhealthy to survive. I would not object to that happening - but still fear the consequences. While in the long run something good may or may not emerge from such a chnage, in the short term the imminent consequences would be bitter turmoil, and a punishing fall for most people.

But what if right this is needed...?

[Osmium Steele]

“This crisis has the potential to be a lot worse than Lehman Brothers,” said George Soros, the hedge fund investor, citing the lack of an authoritative pan-European body to handle a banking crisis of this severity. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”


Source (http://www.nytimes.com/2011/09/07/business/global/in-euro-zone-banking-fear-feeds-on-itself.html?_r=2)

Me, of all people, quoting the NYT?

Hey, the NYT is the logical source for "All Things Soros!"

[Gerald]

Yes, very funny :D

[Herr-Berbunch]

"The euro is the guarantor of a unified Europe," she told lawmakers. "If the euro collapses, Europe collapses."



Don't allow the new kids to enter without thoroughly looking at their books, a retrospective look at other members too (Italy - I'm looking at you!). Europe will survive - it was around before the euro, it'll be around after - just nobody will be friends. :arrgh!:

[Betonov]

I said it before, I'll say it again, when our time comes for a bailout, send us to hell.

The sooner we destroy this country the sooner we'll start rebuilding it

[Skybird]

In the former German Democratic Republic, the FdJ was the youth organisation. And back then, Merkel was chief secretary for propaganda in the FdJ. She has learned the business from fundaments on. Thus her - historically wrong - claim that the EU is Europe, and that the EU-Europe could not be without the Euro. Like she is known for loving to use this phrase of that what she wants and decides is "without alternative", and thus prhibits any questions, criticism, search for alternatives. But the top of the list is the claim that it were the EU bringing peace to Europe, and that now only the Euro currency would secure peace in Europe, becasue that is what united currency do. American civil war, anyone? How many different dollars did they have? Just one, I think. A currency alone being the guarantee for peace? And the EU having brought peace to Europe? What about NATO? The external threat by the Soviets that dictated unity?

People are sick of being decided behind locked doors. They are tired of being assumed completely stupid and fed off with emtpy phrases and stupid slogans. The debt crisis - is also a crisis of fundamental mistrust in the EU polit bureau, its Lisbon self-legitimation dictate, and the autocratic club of heads of states.

[Jimbuna]

We we stretch the ruling to include the £.....please? :)

[Gerald]

Other currencies are affected, too :yep: