Germany finance minister defends fiscal pacts News
Germany finance minister defends fiscal pacts
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[JURIST] German Finance Minister Wolfgang Schaeuble [official profile, in German] on Tuesday defended the 500 billion euro (USD $632 billion) European Stability Mechanism (ESM) [text, PDF] and the fiscal pact before the nation’s Constitutional Court [official website, in German]. He warned [NPR report] the court not to delay the country’s signing of the two fiscal pacts which could lead to market turmoil. A postponement in signing the pacts could lead to significant loss of confidence in the eurozone and financial instability beyond the country’s market, according to the Finance Minister. He noted that even if the court approves the pacts, the implementation should proceed immediately to avoid further harm created by any delay. Although Germany is not alone in not ratifying the pacts, they do have to be accepted by all member states. The funds of the two pacts will be available as soon as member states supplying 90 percent of the funds have ratified them. The main opponent of the agreements is the leftist party Die Linke [party website, in German] which asked the court to consider whether the ESM and the fiscal pact are in compliance with German law. The court had announced [JURIST report] last week that it would hear the challenge to the two fiscal pacts. The court had also advised German President Joachim Gauck [BBC profile] to hold off on signing the legislation until the claim is reviewed and decided.

In June, the same court ruled [JURIST report] that the Bundestag has the right to be heard on the European financial crisis. In the case initiated by the Green party, the court held that Chancellor Angela Merkel failed to notify the parliament early enough about plans for the ESM from its sister party in Austria. Although that decision did not have any effect on the 500 billion euro ESM, it increased the parliament’s rights by requiring the chancellor’s government to provide notice to the parliament as early as possible in the future. A previous ruling that gave the parliament similar rights over matter concerning the EU was issued in February. The country’s constitutional court held [JURIST report] that the use of a parliamentary subcommittee to fast-track decisions related to eurozone bailouts is unconstitutional. Rather, it required the entire Bundestag to overview such decisions. In September, the same court ruled [JURIST report] that the parliament did not unconstitutionally impair its own ability to adopt and control the nation’s budget, nor did it infringe on the budget autonomy of future parliaments.