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German Constitutional Court Halts EFSF Approval, Issues Temporary Injunction On Further Bailout Decisions

Tyler Durden's picture




 

The German constitutional court has already played a substantial role in the country's participation in the European bailout. Back in  September when noting the first participation of the court in the European rescue machinery we noted that "giving the Bundestag’s Budget Committee the final say over the use of the bailout fund is welcome from a democratic point of view, but will add another element of uncertainty to the eurozone crisis. However, so far the Budget Committee has consistently taken the government line on the bailout, albeit reluctantly, and it remains to be seen whether it dares to exercise its new power." It appears the court has once again decided to step up only this time not in a favorable light, after, as Spiegel reports, that the court has "issued a temporary injunction banning the nine-person committee in the Bundestag from taking any decisions on the deployment by EFSF of German taxpayer money." In addition to this, the Court also put the whole German fast-track approval process in jeopardy after it expressed "doubts about the legality of a new panel of lawmakers set up by the German parliament to reach quick decisions on the release of funds from the euro bailout mechanism." This is hardly the ringing endorsement the EURocrats needed to hear from the only power in Europe with the funds to keep the EMU together.

From Spiegel:

Germany's highest court has issued a temporary injunction banning the work of a new panel convened by the country's parliament to quickly green-light decisions on disbursement of taxpayer funds through the euro bailout program. The decision could lead to further delays in German decision-making in efforts to rescue the beleaguered common currency. 

 

Germany's Federal Constitutional Court on Friday expressed doubts about the legality of a new panel of lawmakers set up by the German parliament to reach quick decisions on the release of funds from the euro bailout mechanism, the European Financial Stability Facility (EFSF). The court issued a temporary injunction banning the nine-person committee in the Bundestag from taking any decisions on the deployment by EFSF of German taxpayer money.

 

The special committee was recently created in order to be able to provide a quick green light for EFSF aid in especially urgent situations in which it wouldn't be feasible to put the issue up for a vote before full parliament. The decision from the court, located in Karlsruhe, could also slow down Bundestag approval of the further application of German credit guarantees within the scope of the euro backstop fund.

SPD members of parliament Peter Danckert and Swen Schulz submitted their complaint on Thursday, expressing their concern that the nine-member panel might violate their rights as members of the legislative chamber.

Germany's own supercommittee:

The committee had been scheduled to convene its very first meeting on Friday. In September, Germany's highest court ruled that the Bundestag must be given a greater say in euro bailout decisions given the degree to which the common currency rescue could impose on parliament's right to create Germany's budget. In response, the Bundestag on Wednesday moved to include provisions for parliamentary co-determination of positions taken by Germany on the euro bailout at European Union summits in Brussels. Under the multilevel process, depending on the importance, the urgency and confidentiality, decisions can either be approved by the entire 620-member Bundestag, by the 41-person budget committee or by the nine-member special panel.

And we thought decisions made by our own central planning 10-person Fed supercommittee were bad: Germany just one upped our own all-knowing overlords with its very own 9-person star chamber, which without a shadow of a doubt, represents the entire German population with perfect accuracy.

Logically, we next expect the 9 member special panel to be also made redundant by a 1 person uber-committee. That will occur at roughly the time the much anticipated Keynesian fireworks begin...

 

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Fri, 10/28/2011 - 08:26 | 1820320 HD
HD's picture

What you talkin' 'bout German Constitutional Court?

Fri, 10/28/2011 - 08:34 | 1820350 SGS
SGS's picture

here comes the mega fade.

Fri, 10/28/2011 - 08:38 | 1820365 HD
HD's picture

That would be lovely.

Fri, 10/28/2011 - 08:42 | 1820377 slaughterer
slaughterer's picture

It is just a temporary ban after the fact.   Unless the ban is made retroactive (which is possible in German law), the ESFS has passed through and been approved by the German government. 

Fri, 10/28/2011 - 11:04 | 1820508 Azannoth
Azannoth's picture

Seems they are a bit late to the party no? The Genie is already out of the bottle

or maybe they are just trying to save face, after rubber-stamping the sellout of their country a few weeks before

In a country where http://lmgtfy.com/?q=truth+is+no+defence+germany anything is possible

"In the German legal system no privilege protects the evidence of witnesses in court. If a defendant, or his attorney, says something in court that repeats the "crime" for which he is being tried, he can be charged again. This makes it all but impossible for defendants in "thought crime" cases to present effective arguments and pertinent evidence."

Fri, 10/28/2011 - 08:55 | 1820416 slaughterer
slaughterer's picture

Do you believe Merkel/CDU response?

Chancellor Merkel's government said a temporary court ban affecting the Euro rescue fund will not have any impact on Germany's ability to react to the debt crisis

- Until the court makes its final ruling, the operational capacity on the government is unhindered in relation to the rescue fund according to Peter Altaimer, the deputy leader of the CDU

Fri, 10/28/2011 - 09:13 | 1820470 Gene8696
Gene8696's picture

De-Nationalsozialistische Deutsche Arbeiterpartei

Fri, 10/28/2011 - 08:27 | 1820323 LookingWithAmazement
LookingWithAmazement's picture

Small "obstacle", will be overcome, just like the many others earlier this year. Bye bye crisis.

Fri, 10/28/2011 - 08:34 | 1820348 Instant Wealth
Instant Wealth's picture

Looks like the road to feudalism is paved with some more ''obstacles''.

Fri, 10/28/2011 - 09:02 | 1820444 Manthong
Manthong's picture

Some maroons on our revered SCOTUS have indicated they look to European law for direction on things that pertain to their interpretation of our Constitution (which was written to get us AWAY from Europe).

If they have to look that way, maybe this is where they should start.  

Fri, 10/28/2011 - 08:45 | 1820384 cossack55
cossack55's picture

Would it not be more appropriate to change "star chamber" to "black hole"?

Fri, 10/28/2011 - 08:53 | 1820410 max2205
max2205's picture

How do you say TRANSITORY in German?

Fri, 10/28/2011 - 09:00 | 1820424 RemiG2010
RemiG2010's picture

Donaudampfschiffahrtselektrizitätenhauptbetriebswerk-bauunterbeamtengesellschaft! - in one word

Fri, 10/28/2011 - 09:05 | 1820450 SheepDog-One
SheepDog-One's picture

You dont get it LWA....this is not about 'pump to the moon' this is about cleaning out both longs and shorts for all theyre worth.

Pump n Dump, bitchez!

Fri, 10/28/2011 - 08:28 | 1820324 Ancona
Ancona's picture

Hahahaha to infinity!

This is fast becoming my favorite sit-com!

Fri, 10/28/2011 - 08:44 | 1820382 Chaffinch
Chaffinch's picture

What would the sit-com title be?

"Beggar My Neighbour"?

Fri, 10/28/2011 - 09:04 | 1820448 SheepDog-One
SheepDog-One's picture

'How I Made my Trillions, by Moochin' Off my Big Red Commie Neighbor'!

Fri, 10/28/2011 - 08:28 | 1820330 Irish66
Irish66's picture

Green light, red light...memories

Fri, 10/28/2011 - 08:33 | 1820332 silver500
silver500's picture

what is this pesky constitution thing?

Thank god we dont have one of those.

Fri, 10/28/2011 - 08:34 | 1820351 HD
HD's picture

I think it has something to do with how many chili cheese dogs you can eat...

Fri, 10/28/2011 - 08:51 | 1820406 OneEyedJack
OneEyedJack's picture

Thank god we dont have to follow one of those.

Fixed it

Fri, 10/28/2011 - 10:16 | 1820673 Biosci
Biosci's picture

i really wish that "fixed it" meme would die.

Fri, 10/28/2011 - 08:30 | 1820333 holdbuysell
holdbuysell's picture

I'll go out on a limb here and say this:

Bad cop good cop situation happening in Germany, as Germany really doesn't want this EFSF thing to happen. This timely fly in the ointment is exactly that.

Fri, 10/28/2011 - 08:31 | 1820336 Sutton
Sutton's picture

You know the Germans are saying among themselves"we used to have leaders who knew how to take care of things."

Fri, 10/28/2011 - 08:31 | 1820337 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Hmmm... Germany wants a strong EUR, right?

Fri, 10/28/2011 - 08:41 | 1820371 K_I_T_T_Y
K_I_T_T_Y's picture

They just do not want to finance the other ones.... enough burden with the Hartz 4 people...

Fri, 10/28/2011 - 09:24 | 1820512 Gene8696
Gene8696's picture

Only until the Reichsmark is ready...

Fri, 10/28/2011 - 08:31 | 1820338 Dick Darlington
Dick Darlington's picture

*EUROPEAN CENTRAL BANK SAID TO PURCHASE ITALIAN, SPANISH BONDS

 

These are the (now daily) headlines the Germans wanted to go away. They might have increased the "democracy" by setting up the Bundestag budget committee but the little improvement is completely undone by ECB.

Fri, 10/28/2011 - 08:33 | 1820340 Cursive
Cursive's picture

World population is expanding and power is concentrating into the hands of a very few who are unaccountable to anyone.  May the court in Karlsruhe strick down this fascist move and strick a victory for freedom.

Fri, 10/28/2011 - 08:44 | 1820376 AccreditedEYE
AccreditedEYE's picture

Amen brother. Iceland is the model... give the banksters a big middle finger that reads "pan-european default". (We may be hoping for too much...)

Fri, 10/28/2011 - 08:32 | 1820341 common_sense
common_sense's picture

yes yes we know all this staff... go short and after politiciens go for bailout all poor very rich people, and leave alone all the rest.
so, berlusconi is giving one ruby for each member of the G20 to arrange everything, bravo. this is really what we need, to hear about miracles of corrupt politiciens and banks. congratulatios financials, world is really better since yesterday.

Fri, 10/28/2011 - 08:32 | 1820342 agent default
agent default's picture

Aaaaaaand...CLUSTERFUCK.  Whoopy!!!

Fri, 10/28/2011 - 08:33 | 1820344 disabledvet
disabledvet's picture

"Basic Law","Human Rights","Media Crimes." They have not forgotten...nor do they wish to relive. Imagine serving the interests of Justice? Anything else is, well...simply criminal.
http://www.youtube.com/watch?feature=player_detailpage&v=H5pML6hMVGM

Fri, 10/28/2011 - 08:34 | 1820346 ziggy59
ziggy59's picture

This should cause another ramp up of 200 points.. because hope never dies..

Fri, 10/28/2011 - 08:36 | 1820356 ugly realist
ugly realist's picture

Our only hope is that the German or the Greek politicians botch this.

If not, results will be gruesome. CDS:s are worth nothing. Banks will suffer either from haircut or loss of CDS business.

After all, Greece is a very small part of even EU, letting them sort out their problems themselves would cause least damage.

Of course Greece wuold have to pay but they have paid pensions to dead people and even the loggers had increase of pay because they needed to work outside.

Fri, 10/28/2011 - 08:37 | 1820359 LongSoupLine
LongSoupLine's picture

Quick...call Cheney!!  He's good at that whole Constitution bypass thingy.

In the mean time, the futures are down a whole "huge" .49%...wow, gee.

Fri, 10/28/2011 - 08:47 | 1820397 cossack55
cossack55's picture

What a team. Dick "well just shoot me in the face" Cheney to bypass the Constitution and O'Bummer to go around CONgress.  Man, thats democracy in action. Hahahahahahah

Fri, 10/28/2011 - 09:01 | 1820436 CoolClo
CoolClo's picture

It is Democracy in action. That's why America was  set up as a Limited Constitutional Republic ( Rule of law NOT of a mob of man).

Fri, 10/28/2011 - 08:37 | 1820360 jcaz
jcaz's picture

Buwahahahahaah!!!!!!

Fri, 10/28/2011 - 08:37 | 1820362 dwdollar
dwdollar's picture

More controlled opposition to make the German population think they actually have a say.

Fri, 10/28/2011 - 08:38 | 1820364 pods
pods's picture

This just ramps up the fear factor so we again grasp on to the hopes of success being tomorrow.

They need the constant hope of a deal, because using math, they cannot actually implement a fix that will work.

pods

Fri, 10/28/2011 - 08:39 | 1820367 NOTW777
NOTW777's picture

finally, someone still awake to some ideas of law and contract.  if governments can essentially announce huge debt foregiveness and therefore ignore contractual obligations (i know they claimed to have consent but it appears coerced and therefore there was no free will) the next logical step is for individuals and private businesses to ask - why not us?  why can't we simply announce that because we can't pay, our debt should be forgiven.  this is the quintessential slippery slope if allowed

Fri, 10/28/2011 - 08:41 | 1820368 Zola
Zola's picture

Sarkozy the clown was on French TV yesterday, apart from his ineptitude and ignorance, he clearly is driving more people into the arms of the socialists (they will save the day of course) and the ultra right wing nationalist party (who are unfortunately the only ones advocating Greece steps out of the EU and discussing the monetary issue). Alas no such court in France.

Fri, 10/28/2011 - 08:40 | 1820369 luigi
luigi's picture

We'll reach the point when some democracy will need be exported to Europe soon...

Fri, 10/28/2011 - 08:43 | 1820378 Josh Randall
Josh Randall's picture

I can see it now: Sorry EUROZONE we really really wanted to bail you chumps...errr.member countries out, but like our Courts, um...like said we couldn't or something. 

Fri, 10/28/2011 - 08:46 | 1820389 adr
adr's picture

But Cramer absolutely creamed his pants yesterday. I thought a 20% rise in a little less than three weeks is absolutley sustainable. 1500 points in three weeks gets us to all time highs before Christmas.  Can't we have one last great christmas present to make Americans feel good?

Market tanks because everyone worries banks will need to take losses on Greek debt. Market skyrockets because we find out banks will take losses on Greek debt. That makes perfect sense.

Just like how oil and copper can have some of the largest increases in history over a one week period even though no real increase in demand has been seen. The market doesn't represent reality but it affects eveyone's life, nearly negative to all but the few who only make a living by trading paper.

Fri, 10/28/2011 - 08:47 | 1820390 slaughterer
slaughterer's picture

Anyone else think that these last three years have been a long catastrophe film whose theme is the failure of left center and conservative "democrat" politics?

Fri, 10/28/2011 - 08:50 | 1820404 LawsofPhysics
LawsofPhysics's picture

No, more like the laws of physics catching up with the kleptocracy of the world that has been pushing an infinite growth model on a finite planet while making sure that the people who labor to add REAL value to the system are crushed while paper-pushing fucknuts enjoy a 1,000,000,000,000x bump in their compensation.

Got physical?  Because things are about to get physical.

Fri, 10/28/2011 - 08:51 | 1820408 jdelano
jdelano's picture

the fall of rome.

Fri, 10/28/2011 - 08:54 | 1820415 pods
pods's picture

More like e^(anything) wont work in a finite world.

pods

Fri, 10/28/2011 - 08:58 | 1820429 Snidley Whipsnae
Snidley Whipsnae's picture

I believe that the last three years has been a display of how far politicians of all stripe are buried in the pockets of bankers.

 

Fri, 10/28/2011 - 08:47 | 1820393 LawsofPhysics
LawsofPhysics's picture

As that one kid on the simpsons always says "Ha ha".  Glad I hedged my bets this week.  I know many who did not.

Fri, 10/28/2011 - 08:50 | 1820403 Everybodys All ...
Everybodys All American's picture

You mean the ECB can't just shove the German, Italian, French governments aside? Huh.

Fri, 10/28/2011 - 08:57 | 1820423 shortus cynicus
shortus cynicus's picture

represents the entire German population

Yes, they represents all not enslaved german population.

 

Fri, 10/28/2011 - 08:58 | 1820430 wolfy747400
wolfy747400's picture

So we should expect a 3.5% drop in the S&P500 tonight right? I mean this is fuckin bullshit.

 

Sell your fucking house on a rumor and a picture of Merkel and Sarko shaking fucking hands.

 

Fuck this shit.

Fri, 10/28/2011 - 09:07 | 1820456 SheepDog-One
SheepDog-One's picture

Yea its all beyond insane at this point. I just view all this now as my new entertainment, cancel the cable and free streaming movies, all mere childs play compared to this show.

Fri, 10/28/2011 - 09:08 | 1820457 Benjamin Glutton
Benjamin Glutton's picture

Es besteht aus Hündinnen!

Fri, 10/28/2011 - 09:14 | 1820472 gianakt
gianakt's picture

All this EFSF bullshit will never work, I'm going to cash in my 401k when the market opens. I advised all my clients, friends and family to do the same!!!

Fri, 10/28/2011 - 09:15 | 1820480 Odin
Odin's picture

Ahhh zz Fatherland, always the pain in Europe's side... But I mean comon' can you blame them they're one of the few countries left with a somewhat viable economy...

Fri, 10/28/2011 - 09:19 | 1820495 Gene8696
Gene8696's picture

The court action is simply a hedge to Merkel's promises to commit to EU deal.

Fri, 10/28/2011 - 09:22 | 1820505 Schmuck Raker
Schmuck Raker's picture

"Star Chamber"

...hooray?...

Fri, 10/28/2011 - 09:36 | 1820539 metastar
metastar's picture

So, Do you think there is any chance our Supreme Masters Court will step up to the plate and declare the Super Congress unconstitutional?

Fri, 10/28/2011 - 09:54 | 1820599 AngryGerman
AngryGerman's picture

checks and balances bitches

german instit court has power over government, and itf frequently using it

they have increasingly rendered laws unconstitutional and made the gov change them

good changes that they will do the same with the committees

but it dont matter, bc then merckel has to go everytime to the whole bundestag, but there are enough bitches wholl go along anything anyway

spd wants further european integration anyway (eurobonds), so do the greens

so all itll do is prolongue decision making

 

Fri, 10/28/2011 - 10:07 | 1820642 PulauHantu29
PulauHantu29's picture

How can they let a little thing like "the constitution" get in the way of bailing the Banks?

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