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Eurozone debt: German court clears the way for "500 bn bailout fund

Karlsruhe (Germany):

Germany's Constitutional Court said on Wednesday the country can ratify the euro zone's new rescue fund and budget pact as long it can guarantee that there will be no increase in Germany’s financial exposure to the bailout fund without parliament's approval.

Ruling that an injunction against the European Stability Mechanism (ESM) and fiscal compact was largely unfounded, the court said one condition for allowing ratification was that any increase in German liability beyond €190 billion must first be approved by the Bundestag lower house of parliament.

It also said ESM decisions must be submitted to both houses of parliament for approval, rejecting a confidentiality clause in the treaty.

Copyright: Thomson Reuters 2012

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