BUSINESS

German court rejects challenge to eurozone rescue deals

Germany’s highest court has rejected a challenge to the country bailing out other nations in the eurozone, BBC informs. The Constitutional Court was responding to a challenge brought by six prominent German Eurosceptics. But the court did say the government must seek the approval of the German parliament before providing future assistance. This could further hinder Europe’s response to the debt crisis, already criticised as too slow. German Chancellor Angela Merkel said the high court’s decision vindicated her government and said that the existence of the euro meant more than just a common currency. “The euro is the guarantor of a unified Europe,” she told lawmakers. “If the euro collapses, Europe collapses.” As Europe’s largest and most robust economy, the German decision has implications for the whole region. The presiding judge, Andreas Vosskuhle, said German lawmakers should be more involved in future bailout decisions. “The government is obligated in the cases of large expenditures to get the approval of the parliamentary budgetary committee,” Vosskuhle said. But it was not a “blank cheque for additional rescue packages,” he added. Since last year, eurozone nations have agreed to support Greece, Portugal and the Republic of Ireland via the European Financial Stability Facility, the fund created to help countries struggling to pay their debt obligations. Consensus is needed to set up the Europe-wide rescue fund – but with Finland and Slovakia demanding amendments to the deal, there is concern about whether all the member states can come together. There are still fears that other large countries will also need financial assistance.

Amid heated protests, Spanish senators are meeting to approve a constitutional amendment capping future budget deficits – a measure it hopes will restore the faith of the financial markets in its struggling economy.

Italy, the biggest debtor in Europe, is approaching a confidence vote on its latest austerity package amid much debate on the specifics of the bill. Meanwhile, in an interview with the Bild newspaper, Horst Seehofer, chairman of the Christian Social Union did not exclude Greece leaving the 17-member single currency.

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