27 JUN 2011
By Costas Papachlimintzos | Athens News
GERMANY’S constitutional court on July 5 will begin hearing a lawsuit against the aid provided to Greece and eurozone rescue packages in general, filed last July by a group of five Eurosceptics led by economist Joachim Starbatty. According to the plaintiffs, the financial help package for Greece runs contrary to article 125 of the EU Treaty - the so-called no-bailout clause - which does not allow the EU or a member state to undertake the responsibility of covering the debts of another member state.
Since it was approved in the German parliament, the law for ratification of the aid packages falls under the jurisdiction of the constitutional court, Germany’s highest court, based in Karlsruhe. The court has not provided any information about the duration of the hearing nor the verdict date.
“The German constitutional court will discuss the break of the no-bailout clause, the inflationary bias of purchasing government bonds by the European Central Bank, the danger of incontrollable financial obligations and the rights of national parliaments of both debtor and creditor countries”, Starbatty explained to the Athens News. The German professor argued that the troika has pushed Greece deeper into a trap of indebtedness and suggested that Greece should return to its previous currency, the drachma, for some time.
“We consider it highly unlikely that the court would really risk triggering a dramatic European crisis by ruling outright that conditional support loans for the periphery violate the German constitution,” Holger Schmieding, an economist at Berenberg Bank, told Reuters. He noted, however, that the court may perhaps back a demand by mainstream parliamentarians that the German parliament be granted de facto power of a veto over support loans to be disbursed under the European Stability Mechanism.
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