German Court Rejects Euro Rescue Plan Challenge

Germany’s constitutional court rejected the request for a temporary injunction blocking Germany’s contribution to the EUR750 billion euro rescue plan reports Andrea Thomas of Dow Jones Newswires.

In its decision, the constitutional court said “there is the risk of serious disadvantages to the general public” if it were to grant a temporary junction only to find later that the aid package is constitutional after all.

The finance ministry welcomed the decision.

“The Federal Constitutional Court has therefore confirmed the government’s course of action,” Bertrand Benoit, spokesman for the ministry said, adding that “the finance ministry welcomes the decision of the Federal Constitutional Court”.

Gauweiler said in a statement that: “There isn’t any temporary injunction, but the decision about the legal challenge against the euro stabilization mechanism remains open.”

Germany has pledged contributions of up to EUR147.6 billion to a EUR750 billion bailout for euro-zone states on the verge of default, organized by the European Union countries and the International Monetary Fund. The plan followed the EUR110 billion Greek bailout package set up by euro-zone countries and the IMF, where Germany’s contribution is up to EUR22.4 billion in emergency loans.

Commentary: the EFSF Monetary Authority continues on track; and the Euro, FXE, recoverd, moving above 1.20.