Posts Tagged ‘German Chancellor Angela Merkel’

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If you are following the debt crisis in Europe as I am, you will want to read this article: http://finance.fortune.cnn.com/2012/09/12/german-ruling-europe/?like=1&_wpnonce=77e4015c45

I have copied some excerpts to gain your interest:

But while the twin victories for the euro are worth popping a bottle of champagne, it isn’t enough to open an entire case. There were plenty of caveats in the German ruling that could cause some problems for the bailout down the road. And while the court gave the thumbs up to the bailout, they seem to have expressed some severe reservations to Germany’s role in a possible fiscal union with its eurozone partners.

This morning, traders across Europe nervously waited the decision by Germany’s highest court as to whether or not the eurozone’s largest member would remain its biggest booster. The court was considering whether or not it was legal for Germany to participate in the various eurozone bailout schemes, most notably the proposed 700 billion euro European Stability Mechanism. Those that oppose the bailouts believed that Germany had given up too much of its sovereignty to Europe and that the decisions made by their politicians to support the bailout circumvented German democracy. A “no” ruling would have been disastrous for the euro as it would have meant a German withdrawal from the bailouts, which some observers believed would be the final nail in the coffin for the common currency.

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If you are following the debt crisis in Europe as I am, you need to read this CNN Money article: http://money.cnn.com/2012/09/12/investing/germany-esm/index.html

I have copied a few excerpts to ‘wet your whistle’:

NEW YORK (CNNMoney) — Europe’s latest rescue fund cleared a major hurdle Wednesday after a high court in Germany refused a request to block its ratification.

The German Constitutional Court ruled against a group of conservative politicians who requested an injunction that would bar Germany from ratifying the treaty governing the European Stability Mechanism.

The ESM board of governors will hold their first meeting on October 8, according to a statement from Eurogroup president Jean-Claude Juncker.

German Chancellor Angela Merkel welcomed the court’s decision, saying “it is a good day for Germany, it is a good day for Europe.”

The court’s decision is preliminary, with a final ruling on the legality of the ESM treaty expected later this year. But analysts say the court’s president has made it clear that the final ruling will not deviate from Wednesday’s announcement.

“Germany cannot allow the ESM to leverage itself up so that the potential German maximum liability could exceed the cap,”

Meanwhile, the court also supported the so-called fiscal compact that German Chancellor Angela Merkel and most other EU leaders signed in March.

The fiscal compact will become binding after 12 of the 17 euro area nations have ratified the treaty, according to Juncker. But it will not enter into force before January 1, 2013, he added.