German court upholds eurozone rescue fund

AP News
Posted: Mar 18, 2014 5:56 AM

FRANKFURT, Germany (AP) — Germany's constitutional court has upheld the country's participation in a fund that can bail out troubled governments in the eurozone.

The court in Karlsruhe ruled Tuesday that being part of the fund did not violate the German parliament's right to decide how taxpayer money is spent.

Germany is the largest contributor to the fund because it is the largest economy in the 18-country currency union.

The court had already indicated in a preliminary ruling in 2012 that the European Stability Mechanism, or ESM, did not violate German law, enabling President Joachim Gauck to ratify the treaty establishing the fund.

The court has referred another important question — whether the European Central Bank can make unlimited purchases of government bonds — to the European Court of Justice.