German court backs eurozone's ESM bailout fund

The judges want a guarantee that Germany's financial liability will not rise

Germany's top court has rejected calls to block the permanent eurozone rescue fund - the European Stability Mechanism (ESM) - and the European fiscal treaty.

Leader Angela Merkel called it "a good day", while markets rallied in relief.

But the Constitutional Court imposed conditions including a cap on Germany's contribution, which it said could only be overruled by the German parliament.

Critics had argued that the ESM commits Germany to potentially unlimited funding of debt-ridden eurozone states.

Some 37,000 people had signed a petition to the court asking it to block the ESM, and make it subject to a referendum.

Since Germany is due to contribute 27% of the fund, it cannot proceed without German ratification.

But, after weeks of deliberation, the court's Chief Justice Andreas Vosskuhle said it "rejected the injunctions", since there was a "high probability" that the ESM did not violate the constitution.

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http://www.bbc.co.uk/news/world-europe-19567867