German finance minister asks high court not to delay signing of euro bailout and debt treaties

By David McHugh

THE ASSOCIATED PRESS

KARLSRUHE, Germany — Germany’s finance minister urged the country’s highest court Tuesday not to delay Europe’s new permanent bailout fund and budget discipline pact, warning any postponement to the country signing up to the measures could lead to market turmoil.

Wolfgang Schaeuble told the panel of eight judges hearing arguments that the two pacts would limit Germany’s power to say how its money should be spent that the measures were “important steps toward a European stability union”. He added that Germany’s approval of them would send a “clear signal that solidity and solidarity belong together.”

Schaeuble said, however, that delays could lead to speculative trading and higher borrowing costs for countries.

Under the treaties, Germany would join the European Stability Mechanism, a C500 billion ($614.65 billion) bailout fund for troubled eurozone countries backed by taxpayers’ money. It would also adopt the new EU fiscal compact, a cherished project of Merkel’s, under which 25 countries agree to write strict debt limits into national laws.

Parliament endorsed the treaties June 29 with a solid majority but President Joachim Gauck held off signing them into law after complaints were filed with the Federal constitutional Court.

Opponents of the pacts argue that joining the bailout fund and debt pact would impose limits on the German Parliament’s constitutional power to say how taxpayer money is spent.

They’re asking the court to issue a temporary order blocking Gauck from signing while it fully considers the case. Court officials say a decision on the temporary order alone could take several weeks.

Plaintiffs include the hard-left opposition Left Party — the only party to oppose the plans in Parliament — and Peter Gauweiler, one of a few lawmakers in Chancellor Angela Merkel’s centre-right coalition who has consistently rejected bailouts.

The Left Party argues that the debt treaty potentially binds the government to austerity imposed by the European Commission that would cut funding for social programs.

Gauweiler’s attorney, Dietrich Murswiek, told the judges it was crucial for the court to prevent Gauck from signing the treaties before the case was heard in full.

The treaties “are irrevocable, we can’t get out of them,” he said.

The Federal constitutional Court has typically been willing to approval measures deepening Germany’s integration into the European Union, but has in the past imposed additional requirements to consult with Parliament on bailout measures.

07:15ET 10-07-12