Germany's top court backs eurozone rescue fund

European-Stability-MechanismGermany's Constitutional Court has officially given its backing for the new rescue fund for the Eurozone and dismissed calls to block the fund.

The country’s top court attached conditions to the approval saying that the parliament will have a veto power on the increase increases in the size of the fund. The court in Karlsruhe, southern Germany gave its approval and sent a positive sign to the markets.

The court had received requests from 37,000 plaintiffs asking the court to block the treaty. The court said that the parliament can ratify the European Stability Mechanism (ESM) with a condition that the liability of Germany is not more than 190 billion euros, as already agreed under the treaty. The condition states that any increase in that amount will only be possible after an approval from Bundestag lower house of parliament.

“No provision of this treaty may be interpreted in a way that establishes higher payment obligations for the Federal Republic of Germany without the agreement of the German representative,” the court said in a statement.

The court also ruled that the confidentiality clause of the treaty which says that the decisions should be kept secret should not come in way of comprehensive information of the Bundestag and of the Bundesrat.