KARLSRUHE, Germany (Reuters) - Germany’s Constitutional Court rejected on Wednesday a series of lawsuits aimed at blocking German participation in bailout packages for Greece and other euro zone countries, but said parliament must have a bigger say in future rescues.
Following are reactions to the court’s decision:
“The constitutional court made very clear that parliament has to decide on the European rescue mechanisms ... other euro area states might follow the German (and Finnish) example and therefore the approval of EFSF packages is likely to become even more lengthy.”
“Today’s ruling should bring some relief to financial markets as a total chaos scenario has been avoided but it should not lead to euphoria. A bigger say for German parliament in future bailouts could easily find copycats in other euro zone countries, undermining the clout of the beefed-up EFSF and later the ESM.
“Still, the ruling confirms our view that the German piecemeal approach on the debt crisis is not likely to change but eventually the German parliament will vote in favor of a second Greek bailout package and the beefed-up EFSF.”
OTTO FRICKE, BUDGET EXPERT WITH THE FREE DEMOCRATS (FDP), THE JUNIOR GERMAN COALITION PARTNER
“It has now been legally clarified that there cannot be carte blanche for the government on euro stabilization. The constitutional court also clearly rejects the introduction of common euro area bonds with its judgment, as this could lead to unforeseeable burdens on the federal budget.”
“It strengthens of course the rule of parliament or the budgetary commission of our parliament, which has not only a say, which has to decide on future steps on giving away more money or more guarantees to Greece, Italy, Spain.”
On September 29 vote in German parliament on euro zone bailout:
“I think she (Chancellor Angela Merkel) will get the necessary majority, especially now after the ruling of the constitutional court.”
What does this do to Germany’s reputation in the euro zone?
“It won’t strengthen it actually because the German government can’t act as sovereign as it might want to do, as others might want it to do, but on the other hand it strengthens German democracy and this gives the kind of legitimation to what the German government represents on the European level, so I would say it’s not really a defeat of the government. It maybe even strengthening our reputation within Europe as a strong parliamentary democracy, a little bit like Britain perhaps.”
“We expected a ruling like this.”
“I think a great dose of uncertainty is going to remain with us. It is not yet clear how the rescue mechanism might look as from the middle of 2013 ... Uncertainty is going to remain with us, volatility is going to remain high.”
* German Bund futures extended losses and the euro briefly rose against the dollar after the court ruling.
Writing by Paul Carrel