A constitutional crisis for Germany and a financial shock to the euro have been averted by a court decision that will allow Germany to contribute to Europe’s permanent euro bail-out fund.
The German Supreme Court ruled that it was legal under the constitution for Germany to participate in the bail-out but imposed conditions, including a limit of €190 billion.
If the government wants to contribute more than this to the €700 billion European Stability Mechanism, the decision must be referred to the German Parliament, the Bundestag, for a vote.
This means that heavily indebted countries such as Greece and Spain can continue to receive the support they need in order to avoid bankruptcy.
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