Germany΄s Federal Constitutional Court Wednesday ruled that the euro-zone΄s 2010 bailout for Greece and subsequent aid granted through the euro-zone rescue fund is legal, eliminating a major legal hurdle to the crisis response that΄s been closely eyed by financial markets.
The Karlsruhe-based Federal Constitutional Court rejected lawsuits aimed at blocking Germany’s participation in resource measures for troubled members in Eurozone.
The country’s highest court also said the parliament must have a greater say in future bailout decisions. In the ruling, Chief Justice Andreas Vosskuhle directed the government to seek the approval of the parliament’s budget committee for aid guarantees.
Greece became the first recipient of an IMF-European Union bailout last year. The country received a rescue package of EUR 110 billion last May.
The decision marks a modest, but welcome victory for German Chancellor Angela Merkel, who has been stung by a series of party losses in local elections this year and faces fierce resistance in Germany for her handling of the euro-zone crisis. Her next test will come at the end of September, when the German Parliament votes on changes to the euro-zone bailout fund, the European Financial Stability Facility, which were agreed to in July.
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