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02 July 2012

Fiscal compact, bailout fund challenged in German court


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Six constitutional complaints were lodged in Germany against the treaty on fiscal discipline and the establishment of a permanent eurozone bailout fund. The plaintiffs cite a lack of democratic oversight and a denting of budgetary powers.


The group “More Democracy”, represented by former justice minister Herta Daubler-Gmelin, lodged its complaint with the Karlsruhe-based court on behalf of 12,000 people who signed an online petition. In a video they explain that the permanent bailout fund - the European Stability Mechanism (ESM) - will be a sort of super-bank eluding any democratic or judicial controls. Rules enshrined in the fiscal compact - a Berlin-driven project - will in its turn undermine the sovereignty of the parliament in budgetary matters.

The ESM was supposed to come into force on 9 July. A meeting of eurozone finance ministers that day is expected to approve a Spanish bailout of up to €100 billion, as well as a full bailout for Cyprus. Both are likely to be funded out of the EFSF, which has €250 billion left until the ESM comes into being.

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© EUobserver.com


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