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New Lawsuit Filed Against ESM Threatens Further Bailout Fund Delay

Tyler Durden's picture


Just as we were complaining about lack of newsflow, here comes Germany, coincidentally just as Merkel comes back from vacation, with an update from Karlsruhe that the Constitutional court, which may reject the ESM as is in its September 12th decision, will likely be delayed even more following the filing of a brand new lawsuit challenging the constitutionality of the ESM.

From Handelsblatt, loosely google translated:

The Constitutional Court in Karlsruhe has received a further appeal against the euro rescue package, which could upset the timetable for the euro rescue. According to information from Reuters Online, a group of plaintiffs to the € critic Professor Markus Kerber has filed a constitutional complaint, including an emergency petition. The key message is: Since the last ten days at the European Court in Luxembourg, the complaint is similar to an Irish MPs to decide, the German judges would wait until the spoke on the matter higher court judgment. The original date expected for an announcement, the 12th September, at which they would decide on the fast track in terms of admissibility of ESM and Fiscal Pact was likely untenable.


The German Constitutional Court had just last month on the 12th September date as agreed. They argued that for a long time to fast-track decision-making so that, should the decision to endure. An opinion, the court could not be reached until now.


The decision of the Federal Constitutional Court is of crucial importance for the euro bailout policy. Without the consent of the judge can not pay Germany its financial share of the bailout ESM. This marks the beginning of the most important instrument on ice rescue. Since the middle of another bailout EFSF are almost exhausted, lacking the euro countries a tool to combat the crisis. The plans for the ECB bond purchases will depend on the start of the ESM. ECB chief Mario Draghi has linked its approval of bond purchases in mind that even the bailout buys bonds.


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Mon, 08/13/2012 - 11:14 | Link to Comment govttrader
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The good old...Chancelor on vacation every time....just ask GW

Mon, 08/13/2012 - 11:19 | Link to Comment Precious
Precious's picture

Peter Principle # 1: Suck enough dick and they give you a shiny red coat.

Mon, 08/13/2012 - 11:38 | Link to Comment dannyboy
dannyboy's picture

Ahh the Knights of Nien, we meet again.

Mon, 08/13/2012 - 11:44 | Link to Comment vast-dom
vast-dom's picture

Do Re Mi Fa So La Ti NIEN

Mon, 08/13/2012 - 11:49 | Link to Comment Pladizow
Pladizow's picture

NOTHING will be allowed to occur prior to Obummers re-election!

Mon, 08/13/2012 - 12:01 | Link to Comment Zero Govt
Zero Govt's picture

he spent $3 Trillion and you're right, nothing did occur 

another miserable socialist flop, time to asset strip his book sales and help repay the mega-debts 

Mon, 08/13/2012 - 12:02 | Link to Comment Manthong
Manthong's picture

This is only a little posturing.

Just remember what “No Chance” Geithner said.. “There is “no chance” of European countries letting a major financial institution fall the way Lehman Brothers did three years ago”.

So now this is a given, especially since we are resting easy knowing that there is “no chance” the US will ever lose its AAA credit rating.

Mon, 08/13/2012 - 13:31 | Link to Comment sqz
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I fail to see how a court external to Germany can prevent Germans simply deciding for themselves if Germany's own constitution would need to be changed to accomodate new European institutions.

The Germans may have lost every trace of real sovereignty and, increasingly, unlimited future purchasing power by joining EMU, but some things any country can unilaterally decide for itself at anytime.

It would be like trying to dictate to the US Supreme Court on if/whether/when they are allowed to change their Constitution based on when the International Court of Justice or UN proposes its own changes.

Mon, 08/13/2012 - 16:28 | Link to Comment Ghordius
Ghordius's picture

Eh? A bit garbled? It's the German Constitutional Court. And Parliament can change the Constitution. And this is sovereign. Otherwise I agree. Can't be forced.

Wed, 08/15/2012 - 05:30 | Link to Comment boogerbently
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It sounds a little like khadaffis "line in the sand".

How's he doing, now, anyway ?     :)

Mon, 08/13/2012 - 12:16 | Link to Comment Zero Govt
Zero Govt's picture

Manthong, we had 400 Lehmans (Euro bank bailouts) in December, and over 800 Lehmans in February

you can take what Geithner says as Bible........ biblically wrong

i just don't know where the US Govt finds all its talent

Mon, 08/13/2012 - 13:36 | Link to Comment Manthong
Manthong's picture

I understand that math fully..

Maybe my sarc wasn’t strong enough to be implicit.

Looks like they are willing to paper over a few thousand more Lehmans before hard physics trumps digital fraud.

Mon, 08/13/2012 - 13:13 | Link to Comment DoChenRollingBearing
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@ Pladizow, + 1

Yes, that is why Geithner was on Sylt Island recently, it is believed that he asked German Finance Minister Schauble to ensure that any crisis that happens in Europe happen AFTER the election (mentione in Barron's over the weekend).

The link below will take you to a picture of four generations of pretty Peruvian women (beats the picture of the red-clad types in the article!) as well as news of a big sale our company there made:


one of my readers just reported that the photo did not show up at my piece, so I put in link to the photos as well.


Mon, 08/13/2012 - 11:16 | Link to Comment mrktwtch2
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merkel comes back and says" what did that wop draghi say while i was away?"..he did did he..well we will just have to see about

Mon, 08/13/2012 - 11:17 | Link to Comment SeverinSlade
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Apparently Merkel didn't have 4G coverage wherever she was vacationing.

Mon, 08/13/2012 - 11:23 | Link to Comment tocointhephrase
tocointhephrase's picture

Thats London for you!

Mon, 08/13/2012 - 12:29 | Link to Comment Sandmann
Sandmann's picture

Does anyone in Europe have 4G coverage ?

Mon, 08/13/2012 - 11:16 | Link to Comment SeverinSlade
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Wait...So you mean to tell me that the entire market rally that began in June has been based on rumors and lies?  Unpossible.

Mon, 08/13/2012 - 11:28 | Link to Comment boribori
boribori's picture

Germans do not want to pay, however they have money to pay. Seems they do not want Euro any more, but wait a minute -- noone has a clue how to reverse the process. My bet is that they will find a way to pump some money. It will be no different that Jap, US of A, UK etc. - there is no other way.

Mon, 08/13/2012 - 11:31 | Link to Comment GoldbugVariation
GoldbugVariation's picture

The Germans are talking about the Irish case of Mr Pringle, discussed here:

The Irish court kicked it off to the European Court of Justice (ECJ) on 3 August, aksing the ECJ to rule on the compatibility of ESM with existing European treaties.  In all European Union countries, the rulings of the ECJ have legal precedence.  So in Germany the argument is now that the German Constitutional Court needs to wait and see what the ECJ says in the Pringle case before the German court can give its own ruling.


Mon, 08/13/2012 - 12:13 | Link to Comment M.B. Drapier
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Here's Pringle's statement welcoming the referral.

Mon, 08/13/2012 - 12:13 | Link to Comment Cast Iron Skillet
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Has the ECJ indicated when it will announce a decision? ... couldn't google that info so  far ...

Mon, 08/13/2012 - 12:28 | Link to Comment Sandmann
Sandmann's picture

The ECJ is irrelevant. The BVG has already said it is superior

Mon, 08/13/2012 - 11:32 | Link to Comment hugovanderbubble
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Short Eurostoxx

Mon, 08/13/2012 - 11:32 | Link to Comment cebri88
cebri88's picture

Debt bomb, debt bomb, you’re a debt bomb uh hu
The addiction to credit just goes on and on and on – give it to me
Debt bomb, debt bomb, you’re a debt bomb
A bail-out ooh you’re turn me on

Mon, 08/13/2012 - 11:32 | Link to Comment cebri88
cebri88's picture


Mon, 08/13/2012 - 11:38 | Link to Comment hugovanderbubble
hugovanderbubble's picture

Germany will lose AAA

Signed : Hugo

Mon, 08/13/2012 - 12:12 | Link to Comment Zero Govt
Zero Govt's picture

i feel another Credit Rating Agency ban/bullying from the Eurozone coming 

Mon, 08/13/2012 - 11:39 | Link to Comment NEOSERF
NEOSERF's picture

Regardless of Germany paying its share of the ESM, just how are Italy and Spain going to pay their 35%???

Mon, 08/13/2012 - 12:10 | Link to Comment Zero Govt
Zero Govt's picture

they don't do maths in Brussels, the clue was Stress Tests 1 & 2, only €2 Trillion wrong, and counting...

Wed, 08/15/2012 - 05:34 | Link to Comment boogerbently
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(see Nigel Farage rant on YouTube)

They will need to borrow @ 6% to loan it out for 3%.

Mon, 08/13/2012 - 11:39 | Link to Comment NEOSERF
NEOSERF's picture

ESM sounds like the Social Security fund....less contributors and more takers every month

Mon, 08/13/2012 - 11:40 | Link to Comment Zero Debt
Zero Debt's picture

The European Slavery Manifest is a horrible debt treaty designed to create more debt to enslave the population.

Learn more about it -


Mon, 08/13/2012 - 11:41 | Link to Comment Dr. No
Dr. No's picture

Personally, I would like to see a counter suit requiring payment.  That would be the icing on the cake:  Not only a free lunch, but the balls to demand it.

Mon, 08/13/2012 - 11:53 | Link to Comment lizzy36
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They will hold this shit together with more lies and rumors until after the US election. The Merkel has to do a hard right, bc her ass in on the line in the German elections.

2013 is when the shit hits the fan. 

Until then - keep calm and carry on.

Mon, 08/13/2012 - 12:09 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

she is holding it together w/ sHarper today, liz_Z!

check this out:  Legalize Competing Currencies
By: Dr. Ron Paul, U.S. Congressman

:> They should be free to use gold, silver, or other currencies with no legal restrictions or punitive taxation standing in the way. Restoring the monetary system envisioned by the Constitution is the only way to ensure the economic security of the American people.  <:

the slewiePlankTM  YaY!!! 

prez0 better not take a nappy on this idea, if he wants to keep michelle happy fo4mo years

Mon, 08/13/2012 - 11:55 | Link to Comment jjsilver
jjsilver's picture

"The United Nations is Zionism. It is the super government
mentioned many times in the Protocols of the Learned Elders of
Zion, promulgated between 1897 and 1905."
Henry Klein, New York, Jewish Lawyer,
in Zionism Rules the World, 1948.

Mon, 08/13/2012 - 12:04 | Link to Comment theTribster
theTribster's picture

Isn't this why Merkel "gave in" on the Eurobond issue? She knew that the Constitutional court would rule against the ESM and bailouts via that mechanism. The German's don't give a shit what the ECJ says frankly, they will make their own decision independently and then live by it.

This is all designed to happen. The Germans will rule against the ESM which will crush the Euro increasing Germany's exports even more - everybody will be driving German cars soon. The zone won't break up, way too much political capital has been spent and way, way too much money to be made. That doesn't even consider the control issues, central planning (as long as its Germany) is where the EZ is headed - clearly.

Germany is in the driver's seat as usual, they will get the most out of this for the elite class within Germany and they will do it on the backs of the rest of Europe - Thank you very much. The only way out for the subserviant countries is back to their own currency and out of the EZ completely! The view is worth climb in this case because otherwise it is debt slavery forever.

Germany wants to make sure that France hits the hot seat before any resolution is really brought to bear, Spain and Italy are already impotent in every sense. This leaves France as the only opposition to Germany's power grab, they know if they wait long enough France is next on the list - they'll wait. A dangerous game because Germany would be the next in line and their balance sheet is hyper-leveraged (but they are growing exports) - its a risk-reward thing, obvioiusly they believe this is the right path to take.

Its all about control, and the Germans are (just a little) very controlling people - they like things done their way. If the masses actually figure out what's happening to them and their countries we'll have another war in Europe and the Germans (as usual) will be right in the middle of it. Funny thing is, most of their enemies would be using the German weapons! The Greeks could use their recently purchased German submarines (or the French fighter jets).

Question is, can Germany pull this off without destroying the Eurozone and creating another war? Nationalism is on the rise in every EZ country as elections have proven, this is exactly where Europe was prior to WWII. In fact, WWII was brought on by a fundamental problem: Debt that could NEVER be paid back. Short of a history lesson the parallels are incredible, especially if you peel away the rhetoric and look at the reality.

The next two months will lead the EZ into chaos as Germany continues to drive a hard bargain and make demands that eliminate any sovereignty and render completely impotent local Gubmint and authority. This is the way to go, they are clearly convinced. More Euro (Germany) is the answer, you can hear it in all the rhetoric coming out of Brussels, except for Nigel Farage maybe...

Short the Eurozone until September, early October and then pull all your money out of the system. Between now and them keep stacking!


Mon, 08/13/2012 - 12:27 | Link to Comment Sandmann
Sandmann's picture

can Germany pull this off without destroying the Eurozone and creating another war?


Depends whether Britain wants to engineer another.  It certainly has inept foreign policy as in earlier years of last century

Mon, 08/13/2012 - 12:11 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

whaddya mean no nooz?

Egypt President Mursi Fires Defence Minister

The President also ordered the retirement of the commanders of the navy, air defence and air force.

Mon, 08/13/2012 - 12:27 | Link to Comment Ying-Yang
Ying-Yang's picture

That's how it rolls with the Brothers in the Hood... (Muslim that is)

Mon, 08/13/2012 - 12:18 | Link to Comment williambanzai7
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Mon, 08/13/2012 - 12:31 | Link to Comment Dareconomics
Dareconomics's picture

This new challenge could delay the ESM, but I don't think it will. Constitutional courts in democratic countries are rubber stamps for the legislature and executive. The judicial branch is part of the government and acts to increase the government's and its own power at the expense of citizens.

The German Constitutional Court will approve the ESM in plenty of time. If it doesn't, the ECB will step in to monetize PIIGs debts with the tacit approval of the German politicians while the supposedly hawkish Bundesbank looks the other way. 

The money printing will continue as long as the Swiss are able to hold up the value of the euro through SNB purchases in the open market.

Mon, 08/13/2012 - 13:11 | Link to Comment shovelhead
shovelhead's picture

Ink barrel polka?

Mon, 08/13/2012 - 16:37 | Link to Comment Motorhead
Motorhead's picture

I wonder if Frau Merkel's golf game is at least as good as Obama's.  On second thought, überhaupt nicht.  If Obama is voted out of office, he's probably got a good shot on making the cut on the PGA tour.

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