Europe breathed a bit easier as the German Federal Constitutional Court rendered its long-awaited decision on the European Stability Mechanism (ESM) and the accompanying fiscal pact. The court turned back several challenges to the ESM, although it did attach conditions to the move.
Bloomberg reported Wednesday that the Karlsruhe-based court turned back several challenges to Germany’s ratification of the ESM and pact, although its decision laid out some limits to be observed. In the report, Chief Justice Andreas Vosskuhle announced the court’s decision, saying, “The review has concluded that the laws that were challenged, with high probability, do not violate the constitution.”
However, Vosskuhle added some caveats. The ruling included “some uncertainties” over the maximum amount Germany would contribute to the ESM, as well as how much say the German Parliament would have over the ESM. Therefore, the judges added that Germany must stipulate when it ratifies the treaty that it will not consider itself bound by the treaty unless its concerns are met to its satisfaction.