GERMAN PRESIDENT Joachim Gauck has signed the European Stability Mechanism (ESM) bill, a day after the country’s highest court dismissed several constitutional challenges to the bailout fund.
The €700 billion instrument, a cornerstone of the euro zone crisis-fighting strategy, will not become law until the government addresses constitutional court concerns on German liability and Bundestag information rights from the ESM.
While Wednesday’s court ruling was greeted with relief in the Bundestag and around Europe, it attracted a uniformly negative verdict in the German media yesterday. The influential newspaper Bild dubbed the verdict “Merkel’s expensive victory”.
“What’s clear is that, with the ESM billions . . . every euro debtor state can let itself be saved, whether it has earned this or not,” it told its eight million readers.
“That,” it added, “is what makes it so maddening.”
The Süddeutsche, Germany’s best-selling quality daily, suggested, in the face of insurmountable pan-European opposition, the constitutional court’s legal “light had grown weaker” and it would soon blow out its lamp entirely.
The conservative Frankfurter Allgemeine was equally unhappy. Under the headline “What to do with money?” it gave its readers five tips for safe investing in an uncertain ESM world.
It was doubtful about the wisdom of the ruling, in particular the additional guarantee demanded by the court that German liability could not exceed €190 billion without Berlin’s approval.
“It’s easy to make a protocol note that Germany doesn’t feel bound to an agreement if it is interpreted differently,” it said.
“It’s in no way certain whether this would be authoritative for the European Court if, for instance, Italy and Germany fight over additional contribution obligations.”
The conservative Welt said the ruling showed the court is “groping around in the same fog we’re all groping around in”.
It predicted further lawsuits, though conceded the constitutional court in Karlsruhe had been revealed in the ESM ruling as “just another player in the European game, and not the most powerful one”.
Many critical commentators hope Karlsruhe’s final ESM ruling, not due for several months, will find critical words for the European Central Bank’s new bond-buying programme.
Running through the largely critical coverage was a common sense of betrayal and disappointment: that Germany’s judiciary elite – perceived by many here as the last line of defence on bailouts – had capitulated to massive European pressure, with untold consequences for German taxpayers.
This disappointment arises from the high levels of trust Germans have in their highest court – far higher than in their elected politicians.
“We had the experience in the war, above all in the Nazi era, that legal majorities can agree on terrible injustices,” said Winfried Hassemer, an ex-Karlsruhe judge, on German radio.
The implication of Wednesday’s ruling is that German doubts over bailouts and the political path chosen out of the crisis overshadow even their high trust in their constitutional guardians.
A snap poll for German public television station ZDF showed three-quarters of Germans are doubtful that the ESM will solve the euro crisis.
Only one-quarter see the Karlsruhe ruling as being in Germany’s national interest. Some 49 per cent believed the ruling was correct while 39 per cent thought it incorrect.
