Sunday 4 December 2016

Legal challenge may see conditions set on future bailouts from Germany

Court

Annika Breidthardt

Published 06/07/2011 | 05:00

Germany's top court began hearing legal challenges yesterday against last year's bailouts of debt-stricken eurozone peers in a move that could affect Berlin's room for manoeuvre in future rescue packages.

  • Go To

The Karlsruhe-based Federal Constitutional Court is unlikely to block Germany's contributions to bailouts, but legal experts expect it will probably set conditions for approving fresh aid under a permanent rescue scheme.

Finance Minister Wolfgang Schaeuble, defending the government, attended in person to tell the court that the euro currency area was at risk from struggling countries and that the bloc had to act to prevent such contagion risks. "The danger of such contagion ... justified the need to help Greece in April 2010 with coordinated bilateral loans," he said.

Powerhouse

Ruling conservative politicians who spoke to Mr Schaeuble later in Berlin said that following the hearing he was "not sceptical" about the outcome and expected a ruling by the end of September.

Germany is the bloc's economic powerhouse and foots more than a quarter of Europe's bill for the bailouts.

At a time when a second Greek rescue is being drawn up, many Germans are becoming fed up with financing rescues of what they see as profligate states that have spent beyond their means.

Presiding judge Andreas Vosskuhle said the court would not review the economics behind policies to tackle the eurozone's sovereign debt crisis but focus only on the legal basis.

"Europe's future and the right economic strategy to tackle the sovereign debt crisis aren't debated in Karlsruhe. That's the task of politicians, not judges," Judge Vosskuhle said.

"But the Federal Constitutional Court must consider the limits that the constitution sets on the political realm."

One of the plaintiffs, Karl Albrecht Schachtschneider, argued: "What is wrong economically cannot be right legally."

The court is considering three lawsuits brought by six eurosceptic plaintiffs -- five academics and a lawmaker from Chancellor Angela Merkel's Bavarian sister party -- against eurozone bailouts and aid paid to Greece, Ireland and Portugal. (Reuters)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business