Germany's highest court on Wednesday rejected an emergency attempt to block the country from ratifying the European Union's Recovery package over the bloc's plan to raise funds by pooling debts.
The EU unveiled a €1.8 trillion seven-year budget in December which includes a €750 billion post-COVID Recovery Plan. Part of the money is to raised by the issuance of an EU common bond, which has never been done before.
But some in Germany had launched a legal challenge over the new instrument, fearing its use would not be limited to the recovery package and that it would curtail the country's future ability to raise money on financial markets.
The Constitutional Court said however that "based on a summary examination, it does not appear highly likely that the Court will find a violation" of the country's fundamental law and rejected the appeal for an emergency injunction.
It was filed by the far-right party Alternative for Germany (AfD) and a civic group named Bündnis Bürgerwille, or Citizens' Will Alliance. Both argue the recovery fund is unconstitutional and breaches the EU treaties.
But the court will continue its examine the legal complaint, stating that "submissions made by the applicants demonstrate that it appears at least possible that the approved 2020 Own Resources Decision infringes the Bundestag’s overall budgetary responsibility, encroaches upon the Basic Law’s constitutional identity, and violates the applicants’ right to democratic self-determination."
It argued that "the consequences that would arise if the preliminary injunction sought were not issued but the act of approval were later found to be unconstitutional are less severe than the consequences that would arise if the preliminary injunction were in fact issued but the constitutional complaints lodged by the applicants ultimately turned out to be unfounded in the principal proceedings."
European Commission chief Ursula von der Leyen welcomed the Court's ruling.
"The EU stays on track with its economic recovery, following this unprecedented pandemic," she wrote on Twitter.
Last year, the German Constitutional Court had ruled that a bond-buying programme launched by the European Central Bank in 2015 to boost the eurozone's economy as it continued to struggle from the impact of the 2008 and 2018 financial crises, was partially unlawful. This came despite the EU's top court declaring the programme lawful.