by Tang Zhiqiang
BERLIN, Sept. 12 (Xinhua) -- Federal Constitutional Court of Germany on Wednesday rejected calls to block the European Stability Mechanism (ESM), paving the way for the permanent bailout fund and other crisis-battling instruments to go into operation.
The Karlsruhe-based court decided not to issue a temporary injunction demanded by plaintiffs to prevent German President Joachim Gauck from completing the ratification process of the ESM and the European fiscal pact by signing them into law.
It is not a surprising decision from the court. German government and many legal experts have always been optimistic. "We are convinced of the constitutionality of the ESM," said Steffen Seibert, Chancellor Angela Merkel's spokesman, on Monday.
Although a final verdict on the legality of the ESM is expected in December, Wednesday's ruling has shown a clear signal of the court's attitude towards the final decision.
Once Gauck signs the treaty, the ratification process of the ESM in Germany will be completed. Germany will be obliged to contribute to the mechanism, even if the fund is found unconstitutional in the future. The president is expected to give his signature soon.
With its 500-billion-euro (644-billion-U.S. dollar) aiding capacity, the ESM has been long-awaited as a new instrument to save the struggling eurozone countries.
It would increase firewall for the spreading European debt crisis and succeed the temporary bailout fund European Financial Stability Facility (EFSF), which is to expire on June 30, 2013 and has only about 140 billion euros left available after aiding Ireland, Portugal, Greece and Spanish banks.
The ESM was scheduled to come into force in July 2012, but was suspended due to complaints in Germany, where about 37,000 plaintiffs argue that the ESM strips the parliament of the power to decide how taxpayers' money should be used, thus infringing German constitution.
"It's a good day for Europe, and an important step towards financial stabilization in the eurozone," said German Economy Minister Philipp Roesler after the ruling.
"It is a good decision. It will promote stability in euro and Europe," said German Foreign Minister Guido Westerwelle.
Stimulated by the court's ruling, German Dax stock index skyrocketed to over 7410 points, the highest level since July 2011.
But it may be a disappointing decision for German citizens who have been fed up with Germany's "endless" paying for its indebted neighbors.
An opinion poll by German magazine Der Spiegel showed that 53 percent of German citizens support the plaintiffs' demand for the court to suspend the ratification of the ESM.
Germany's financial burden in the fund should be limited to its share of the capital stock or 190 billion euros, the court demanded.
Increase of the liability should not happen "without agreement of German representatives," said Court President Andreas Vosskuhle in a statement, adding that the parliament should "receive comprehensive information" over future decisions made by the ESM.
The ruling is similar to a verdict last year, when the court approved the EFSF and guaranteed German parliament's involvement in future eurozone bailouts.
"Germany sent today again a strong signal to Europe and beyond that it will decisively shoulder its responsibility as Europe's biggest economy and a reliable partner," German Chancellor Angela Merkel said in Bundestag after the court's ruling.
But for Merkel, it may also be a warning signal which may handle her pace of transferring German sovereign rights to Europe. Facing federal election next year, the "iron lady" has to unite her own party and partners and earn support from more people.
Before Wednesday's ruling, legal experts warned that the transferring of German sovereign rights to Europe in crisis has approached the limit allowed by German constitution.
The opinion, shared by German Finance Minister Wolfgang Schaeuble, triggered speculation that Germany's further involvement in the European integration may lead to a referendum to change the constitution, which may last for years.
The clash between European integration and German constitution has recently been presented by ECB's new bond-purchasing program. The court's decision would remove the obstacle for the program, another instrument to battle the three-year-old crisis.
According to ECB President Mario Draghi, applying for bailout from the EFSF or the ESM is one of the preconditions for a European country to receive ECB's bond-purchasing aid.
Eurosceptics claimed that the preconditions for Germany to join the monetary union have been doubtfully changed when the ECB authorized itself to purchase unlimited bonds from struggling eurozone countries.
Parliament member Peter Gauweiler from CSU, the Bavarian sister party of Merkel's CDU, submitted a last-minute petition to the Constitutional Court on Sunday, asking the court to take the ECB's program into account when it considers the ESM case and to delay the ruling.
Gauweiler's claim, though rejected by the court Tuesday, earned sympathy from some legal experts and lawmakers. The Constitutional Court doesn't have jurisdiction over a Europe-level institute like the ECB, but has the power to force Germany to opt out of the monetary union if the mechanism is found in conflict with German constitution.
The court issued a preliminary warning Wednesday, ordering Germany to state clearly that German interest should be respected in ESM and reserve the right to quit the mechanism. (1 euro = 1.29 U.S. dollars)