Top German court limits euro panel's powers

Top German court limits power of Parliament panel meant to make quick euro decisions

Associated Press

BERLIN (AP) -- Germany's highest court on Tuesday limited the powers of a special parliamentary panel set up to make quick decisions on using the eurozone rescue fund, ruling that it can decide only on particularly sensitive bond purchases.

The Federal Constitutional Court said the nine-lawmaker committee could decide on purchases of government bonds on the secondary market, where bonds are traded after they are issued. Such purchases could potentially be made by the bailout funds to help keep indebted eurozone countries' borrowing rates down.

Chief Justice Andreas Vosskuhle said that if word got out "even of plans for such an emergency measure, that would be liable to thwart its success."

But otherwise, he said in a televised ruling at the court in Karlsruhe, "no constitutional justification is discernible" for shutting other lawmakers out of decisions that touch on Parliament's responsibility for budgetary matters.

The cross-party panel, whose members were drawn from Parliament's larger 41-member budget committee, was set up with a vaguely defined mandate to decide on "cases of particular urgency or confidentiality."

It has never started work because the court issued an injunction blocking it last October, pending Tuesday's ruling, following a complaint from two opposition lawmakers.

Parliament speaker Norbert Lammert said lawmakers would adjust legislation to meet the court's requirements "in a sensible period of time."

The ruling illustrates Germany's struggle to balance the need for quick decision-making in a fast-moving crisis with demands for democratic accountability. Bailing out debt-laden strugglers in the 17-nation eurozone isn't popular in Germany, Europe's biggest economy.

Thanks to a previous constitutional court ruling, Germany's Parliament has to endorse all decisions on using the eurozone's temporary rescue fund, the euro440 billion ($590 billion) European Financial Stability Facility.

That is also likely to be the case with its permanent successor, the euro500 billion ($671 billion) European Stability Mechanism. Parliament hasn't yet voted on setting up that fund, which is to start work in July.

The full lower house, or Bundestag, has voted seven times on eurozone rescue measures over the past two years. On Monday, it endorsed a second euro130 billion ($175 billion) loan package aimed at saving Greece from bankruptcy.

That vote showed both a wide consensus among Germany's mainstream parties in favor of pressing on with the eurozone rescue drive and gradually growing unease among a minority of lawmakers in Chancellor Angela Merkel's center-right coalition.

Lawmakers voted 496-90 with five abstentions for the new bailout. Of the yes votes, 304 came from Merkel's coalition; 17 of its lawmakers voted against and three abstained.

That marked the first time support from Merkel's coalition has fallen short of an absolute majority of all lawmakers, 311, in a vote on the crisis — though on Monday's turnout it was easily enough to secure a simple majority without the opposition's help.

Foreign Minister Guido Westerwelle dismissed opposition taunts. "It was a clear government majority; that's what we needed, and we have it," he told Deutschlandfunk radio.

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