German court rules eurozone bailout fund legal

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German court rules eurozone bailout fund legal

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Germany’s Constitutional Court on Wednesday rejected a legal challenge to block the euro zone’s new bailout system.

Judges in Karlsruhe disagreed with the 37,000 plaintiffs that the European Stability Mechanism is unconstitutional.

Their lawyers argued it could expose German taxpayers to unlimited demands for bailout money.

However, the court capped the government’s contribution to the fund at 190 billion euros. It would need to seek parliamentary approval to exceed that limit.

The plaintiffs also challenged a new EU treaty enforcing new rules on state spending deficits.

The court rejected the view that Berlin would lose control its own budget.