Germany‘s top court has given the green light to Europe’s new rescue fund. The court rejected claims that the fund was illegal under German law.
It’s a pretty crucial decision, because the country is set to provide the largest single chunk of cash for the bailouts, and the ruling in favor of the fund this morning helped prevent chaos in financial markets.
So another critical part of the euro rescue plan is in place, and investors are liking the good news.
“It has been the focus of the tension for a month or two now,” Stephen Lewis of Monument Securities points out. “And the fact that we’ve got through the event without mishap is going to be regarded as positive by investors.”
Still, the he says the euro is not out of the woods yet. “It’s a small cloud that has lifted. There are plenty of others, of course. And there may be further constitutional objections to proceedings as they unfold in the months ahead.”
Questions remain in Europe regarding Spain and whether it will accept a bailout. Elsewhere in Europe today, Dutch elections are set to be held; and the European Commission will reveal details of a planned euro zone-wide banking union that will ultimately involve a European deposit insurance scheme like the FDIC in the U.S. That’s likely to prove controversial, and perhaps provoke another challenge in Germany’s Constitutional Court.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.