German Constitutional Court upholds ruling from 2012 that ESM is legal

FXStreet (Łódź) - The German Constitutional Court affirmed on Tuesday the legality of the European Stability Mechanism, rejecting lawsuits which blocked the rescue fund. The German government accepted the ruling shortly after.

The court said that the European permanent bailout fund didn't violate the German parliament's autonomy on budgetary matters, as long as the Bundestag had a right to veto it and that it could impose limited liability for German taxpayers.

It also stressed that Germany's liability to ESM should not exceed 190 billion euros, and if a need for that arises it has to be approved by parliament.