BONN, Germany (CN) – The German Supreme Court’s confirmation of the country’s participation in euro bailouts calmed market jitters and boosted Chancellor Angela Merkel’s leadership.
Germany’s Federal Constitutional Court ruled yesterday that the country’s aid measures for Greece and its euro rescue package did not violate the budget autonomy of the Bundestag, Germany’s parliament.
The ruling assuaged fears over collapse of the euro, triggering European and U.S. markets to rise sharply.
German Chancellor Angela Merkel said the ruling “absolutely confirmed” her administration’s bailout policy, which other politicians and much of the German public have questioned.
“If the euro fails, then Europe fails,” Merkel said in a statement, adding that Germany’s future is “inseparable” from Europe’s.
Germany, as the strongest economy in the European Union, has played a leading role in the bailouts, and shouldered a heavy burden in aiding the ailing economies of other nations within the common currency zone.
In May 2010, the German Bundestag approved total aid of $31.5 billion for the Hellenic Republic, and the ability to spend up to $208 billion in a package intended to secure the euro.
While the Constitutional Court upheld the legality of the measure, knocking down three complaints, the court also said that the Bundestag needed to have a greater say in future bailout measures.
The ruling comes as European countries with ailing, debt-ridden economies – such as Greece and Italy – struggle to implement austerity reforms.
Euro zone countries Portugal, Greece and Ireland have received hundred of billions of dollars in EU bailout help since 2010.
The 17 countries in the euro zone approved a new $157 billion bailout package for Greece this July, including contentious contributions from commercial lenders.