German euro bailout opponent files new court suit

AP News
Posted: Sep 09, 2012 12:16 PM
German euro bailout opponent files new court suit

BERLIN (AP) — An opponent of the eurozone's permanent rescue fund said Sunday that he has filed a new complaint to Germany's highest court after the European Central Bank unveiled a program to buy government bonds.

Peter Gauweiler, a backbench lawmaker with Chancellor Angela Merkel's conservative bloc and a consistent opponent of the government's euro rescue strategy, already is one of several plaintiffs against the €500 billion ($640 billion) European Stability Mechanism. Germany's Federal Constitutional Court is to rule Wednesday on calls for an injunction blocking the fund.

Gauweiler's office said he filed a new complaint seeking an injunction that would prevent ratification of the ESM unless the ECB reverses Thursday's decision under which the bank could buy unlimited amounts of government bonds — if countries first seek help from the eurozone fund.

The ECB's move "has created a completely new situation" regarding whether the fund is constitutional, Gauweiler's office said in a statement. It argued that the prospect of the ECB buying bonds makes the overall risk for the German budget "completely incalculable" and that the bank's potential actions would override Parliament's rights to supervise the fund.

The court should if necessary delay Wednesday's planned ruling to consider the new complaint, Gauweiler argued.

Asked about Gauweiler linking the case against the rescue fund with the ECB's actions, Vice Chancellor Philipp Roesler told ARD television: "I personally don't see any direct connection."

Roesler said he hoped the court will approve the European Stability Mechanism because "we need it to stabilize our currency."

"All of Europe is waiting for this important decision," he said.

The fund, which lawmakers approved in June, needs the participation of Germany, Europe's biggest economy.

Finance Minister Wolfgang Schaeuble made clear last week that he's confident it will get the supreme court's approval. "The ESM does not violate the constitution," he said.

The ECB's bond-buying move has drawn criticism in Germany, where bailing out debt-troubled countries has been generally unpopular. The country's central bank, the Bundesbank, opposes the new program, but Schaeuble and Merkel have signaled their acceptance.

Roesler, who leads the junior party in Merkel's coalition, the Free Democrats, said he remains skeptical and that "long-term bond purchases can never be the right solution" to the 17-nation eurozone's debt crisis.