12 September 2012

Chancellor Merkel: The way is free for the ESM and the Fiscal Pact

Chancellor Merkel has welcomed the positive ruling of the German Federal Constitutional Court on the European Stability Mechanism and the Fiscal Pact. "That is a strong signal for Europe! Germany takes its responsibility seriously", declared the Chancellor.

The Federal Constitutional Court confirmed the comprehensive strategy proposed by the German government to overcome the eurozone crisis: the ESM and the Fiscal Pact are constitutional. Germany’s liability is limited and the right of the parliament to be involved is guaranteed. The democratic rights of the petitioning citizens and the members and parliamentary groups of the German Bundestag are not infringed. The Federal Constitutional Court refused the application for an interim court order.

A good day for Germany and a good day for Europe

The Fiscal Pact and the European Stability Mechanism (ESM) are the key elements in the German government’s strategy to deal with the crisis. The Fiscal Pact will keep the eurozone states on course to consolidate their budgets. The ESM will give the eurozone an effective instrument to protect the eurozone as a whole from threats.

Solidarity at European level with clear conditions and ties is one side of the coin. The other is responsibility for putting one’s own house in order and undertaking the necessary structural reforms at member state level. "This is a good day for Germany and a good day for Europe!" declared the Chancellor.

A cap on liability as intended by the German government

The Federal Constitutional Court imposed one main condition on the ratification of the ESM Treaty. It must be "ensured under international law" that the agreed limit on Germany’s liability, of €190 billion, may not be exceeded without the authorisation of the German representative. This is fully in line with the view of the German government and the necessary steps will be taken.

Press release

© Bundesregierung