AP Business Writer
KARLSRUHE, Germany (AP) – Germany’s finance minister urged the country’s highest court Tuesday not to delay Europe’s new permanent bailout fund and budget discipline pact, warning any postponement to the country signing up to the measures could lead to market turmoil.
Wolfgang Schaeuble told the panel of eight judges, hearing arguments that the two pacts would limit Germany’s power to say how its money should be spent, that the measures were “important steps toward a European stability union”. He added that Germany’s approval of them would send a “clear signal that solidity and solidarity belong together.”
The Federal Constitutional Court has typically been willing to approval measures deepening Germany’s integration into the European Union, but has in the past imposed additional requirements to consult with Parliament on bailout measures.
But even if it does decide in favor of the measures, Schaeuble warned that if the case drags out it could delay the implementation of the new European Stability Mechanism bailout fund and cause widespread difficulties.
“A significant postponement of the setup of the ESM, which was foreseen for July, could mean a serious unsettling of markets far beyond Germany and a serious loss of confidence in the eurozone,” he said. “Doubts about … the willingness of Germany to fend off the dangers to the financial stability of the eurozone could lead to a significant worsening of the current crisis symptoms.”
Under the treaties, Germany would join the ESM, a (EURO)500 billion ($614.65 billion) bailout fund for troubled eurozone countries backed by taxpayers’ money. It would also adopt the new EU fiscal compact, a cherished project of Merkel’s, under which 25 countries agree to write strict debt limits into national laws.
Schaeuble said after the hearing ended that opponents and supporters had an “intensive debate,” and he was optimistic the treaties would pass muster “because the government is sure that the treaties do not violate the constitution.” No date was set for a decision.
He added that there was “a high degree of nervousness” in financial markets and “the constitutional court knows that.”
Germany is not the only country that has yet to approve the ESM treaty, but it does not require unanimity. The fund will become operational as soon as member countries representing 90 percent of the fund’s capital commitments have ratified it. Germany is the largest contributor, at 27 percent of the total, so the fund cannot become operational without German ratification.
The fiscal compact is due to into force on Jan. 1, 2013, if it has been ratified by at least 12 countries that use the euro by that time.
German Parliament endorsed the treaties June 29 with a solid majority of more than two-thirds, but President Joachim Gauck held off signing them into law after complaints were filed with the Federal Constitutional Court.
Opponents of the pacts argue that joining the bailout fund and debt pact would impose limits on the German Parliament’s constitutional power to say how taxpayer money is spent.
They’re asking the court to issue a temporary order blocking Gauck from signing while it fully considers the case. Court officials say a decision on the temporary order alone could take several weeks.
Presiding Judge Andreas Vosskuhle said in his opening statement that coming to a decision is “in many respects not easy” and that the court will need to keep in mind Parliament’s broad leeway for discretion, especially for measures passed with a two-thirds majority, as it considers the constitutional argument.
Plaintiffs include the hard-left opposition Left Party _ the only party to oppose the plans in Parliament _ and Peter Gauweiler, one of a few lawmakers in Chancellor Angela Merkel’s center-right coalition who has consistently rejected bailouts.
The Left Party argues that the debt treaty potentially binds the government to austerity imposed by the European Commission that would cut funding for social programs.
Gauweiler’s attorney, Dietrich Murswiek, told the judges it was crucial for the court to prevent Gauck from signing the treaties before the case was heard in full.
The treaties “are irrevocable, we can’t get out of them,” he said.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)