If There’s Both Clarity and Confusion, It Must Be Wednesday in Europe
Wednesday, September 12, 2012 delivered some clarity and some confusion in Europe. In Germany, the judges of the Constitutional Court, wearing their red robes and hats, cleared away objections to German approval of the European Stability Mechanism, the Eurozone’s permanent bailout fund. Ratification of the ESM was challenged based on an argument that it contravened the German constitution. With this obstacle removed, the proposed €700 billion fund can continue to move forward; however, the German high court established a price. The judges ruled that a cap of €190 billion must be placed on German contributions before official ratification could occur. The ruling evidently doesn’t preclude Germany from contributing more in the future, it just establishes that the parliament would have to return, hat in hand, to ask for approval.
