Wednesday, September 12, 2012

And in other (less surprising) news

The Karlsruhe Court has refused to block the ESM treaty and, as the Washington Post reports, inevitably the markets "breathed a sigh of relief" and "rallied". The article does not add the words "for the time being" but that is understood.

The Financial Times also reports the result, adding:
The conditions imposed by the court appeared less onerous than some of the fund’s supporters had feared.
It ruled that the ceiling of €190bn in German financial guarantees imposed when parliament approved the rescue fund could only be increased with the assent of lawmakers. There must be no unlimited liability for Germany, the ESM’s biggest backer, the justices decided.
The judgment was greeted with immediate relief by members of the German parliament. Frank-Walter Steinmeier, leader of the opposition Social Democrats, expressed satisfaction that the Bundestag decisions had been confirmed.
“The ESM can finally start work,” he said.
What happens when that money runs out and the German economy suffers some more?

Reuters adds that "the euro rose to a four-month high against the dollar" because of the Court decision. The train wreck continues.


  1. To praphrase: "The problem with the EMU is that eventually Brussles and the ECB run out of Germany's money."

    (Note that 20% of the bailout funds are coming from Italy and Spain and are going to be used to bail out Spain and Italy!)


  2. With some of the funds remaining in Brussels, one assumes. The word insane does not begin to cover it.