Reuters: Germany clears last hurdle to ESM bailout fund ratification

27 September 2012

Germany cleared the last legal hurdle to ratifying the eurozone's new bailout fund with a cabinet declaration that addresses concerns raised by the country's Constitutional Court. The German parliament will have veto rights over any increase in its contribution, which is now capped at €190 billion.

Germany is the last country in the 17-member eurozone to complete ratification of the European Stability Mechanism (ESM), an important tool to stem the three-year debt crisis that has forced bailouts of Greece, Ireland and Portugal and now threatens big countries like Spain and Italy. In line with the Constitutional Court ruling, the declaration approved by Chancellor Angela Merkel's centre-right cabinet stated that the German parliament would have veto rights over any increase in Berlin's contribution to the €700 billion ESM.

President Joachim Gauck signed the ESM legislation on 13 September, a day after the Constitutional Court ruling, but said formal ratification would only be complete when the government had met the court's conditions.

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