German Court Rules in Favor of European Economic Bailouts

Posted September 7th, 2011 at 7:00 am (UTC-5)
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Germany’s Constitutional Court has upheld the country’s participation in the European Union rescue fund, but says the German parliament should have greater say in future economic bailout packages.

The court ruled Wednesday that the German government is now required to seek the approval of parliament’s budgetary committee before taking part in any further large-scale economic rescue packages.

However, the ruling rejected a lawsuit claiming the economic bailouts violated the German constitution by denying parliament the right to determine how taxpayer money is spent.

Some experts say the ruling could slow down the process of providing economic rescue loans to cash-strapped eurozone nations.

German Chancellor Angela Merkel on Wednesday said the ruling confirms her government’s decision to ensure the stability of the European currency by participating in the bailouts.

Ms. Merkel said the eurozone is much greater than a common currency, and that Germany’s future is inseparable from that of the euro.

The EU emergency rescue fund, known as the European Financial Stability Facility, was created in May, 2010 to provide economic rescue packages to heavily indebted countries that use the euro currency.