Top judges in Germany have confirmed that the eurozone’s new bailout system does not breach German law.
Some 37,000 plaintiffs lodged a complaint with the country’s constitutional court in Karlsruhe.
They argued that the European Stability Mechanism is unconstitutional, claiming it could expose German taxpayers to unlimited demands for bailout money.
But the court capped the government’s contribution to 190 billion euros. It would need to seek further approval from MPs if it wanted to exceed that limit.
Joachim Gauck, the German president, will now be able to sign the ESM treaty into law.
Germany will now foot the bill for just under a third of the 500-billion-euro rescue fund.
The decision sparked protests from eurosceptic political parties from both the left and the right.
Opponents to the bailout system say it infringes on German parliamentary sovereignty and is undemocratic.