World / Europe

German president ready to ratify ESM

(Xinhua) Updated: 2012-09-14 14:22

BERLIN - German President Joachim Gauck signed the treaty of establishing European Stability Mechanism (ESM) and the EU fiscal pact Thursday, but shelved the final ratification until conditions set by top German court are met.

"President Joachim Gauck issued laws of so-called 'euro rescue package'," said his office in a statement, adding that it included ESM treaty and fiscal pact.

Gauck would not give a final ratification to the treaties until German government had met conditions set by German Federal Constitutional Court Wednesday, the office said.

The court gave a long-awaited verdict over the suspended ratification process of European permanent bailout fund ESM and fiscal pact, which aims to strengthen budget discipline, on Wednesday, rejecting demand by plaintiffs to issue a temporary injunction to prevent Gauck from signing the treaties into law.

The Karlsruhe-based court set conditions which protect parliament's power for the final ratification of ESM and fiscal pact. The parliament should "receive comprehensive information" over future decisions made by ESM and Germany's financial burden in the fund should be limited to its share of the capital stock or 190 billion euros.

Increase of German liability in ESM, if any, should not happen "without agreement of German representatives", and Germany must express that its interest should be respected in ESM, reserve the right to opt out of mechanism.

These conditions must be met by German federal government before "a final ratification by the president", said the Thursday statement.

Legal experts expect German government to work out a kind of addendum or protocol attached to ESM to express German reservations. And this is expected to be accepted by other eurozone member states in a short time.

Germany is the last eurozone country to ratify the ESM, which was set to come into force July 2012, but suspended for months by complaints in Germany.

The permanent bailout fund has a bailout capacity of 500 billion euros and is expected to work together with its predecessor, European Financial Stability Facility, and European Central Bank's open-end bond purchasing program to battle against the three-year-old crisis in Europe.

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