Euro bailout fund approval boosts global stocks, euro
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LONDON (Reuters) - European shares and the euro rose on Wednesday while Italian and Spanish bonds were little changed after Germany’s top court gave its backing to the euro zone’s new 700 billion euro European Stability Mechanism bailout fund.
Traders react at their desks as the President of the German Constitutional Court (Bundesverfassungsgericht )Andreas Vosskuhle pronounces a judgement on the European Stability Mechanism (ESM) and fiscal pact, in front of the DAX board at the Frankfurt stock exchange September 12, 2012. 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 there will be no increase in German financial exposure to the bailout fund without parliament's approval. Ruling that an injunction against the 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 euros must first be approved by the Bundestag lower house of parliament. REUTERS/Alex Domanski
German approval of the ESM was crucial to boost the euro zone’s crisis fighting powers and a key requirement for the European Central Bank’s new plan to buy the bonds of struggling euro members.
European shares .FTEU3 rose to stand up 0.14 percent on the day having stood up 0.07 percent just ahead of the decision. The euro hit a new four month high of $1.29017 from $1.2845. German Bund futures fell to a session low of 139.75.
Reporting by Marc Jones; Editing by Nigel Stephenson