Germany's high court on Wednesday upheld the country's participation in eurozone bailout funds, but ruled that lawmakers should be more involved in such decisions.
The ruling means that while Germany's agreement to take part in the financial rescue of Greece will not be affected, participation in future bailouts might become more complicated.
Presiding Judge Andreas Vosskuhle said even though the Federal Constitutional Court had rejected lawsuits arguing that Germany's participation had violated parliament's right to control spending of taxpayer money, it was not giving a rubber-stamp to the chancellor's office.
The verdict "should not be misinterpreted as a constitutional blank check for further rescue packages," Vosskuhle told the court.
Chancellor Angela Merkel greeted the ruling, telling parliament that the judges had "absolutely confirmed" her government's policies.
"The Federal Constitutional Court said personal responsibility and solidarity, naturally with the absolute approval of the parliament, is the way," Merkel said.
In an impassioned defense of the 17-nation euro, she told lawmakers that the euro meant more to Europe than just a common monetary zone, noting that no countries with a shared currency had ever gone to war with one another.
"The euro is the guarantor of a unified Europe," she said. "If the euro collapses, Europe collapses."
She again rejected, however, the possibility of introducing eurobonds.
"Eurobonds are the way to a debt-union; we need a stability-union," she said.
In a rushed vote, Germany's parliament agreed to join in the May 2010 bailout of Greece to keep it from defaulting on its debts, and to back the euro440 billion ($620 billion) European Financial Stability Facility with some euro147 billion ($207 billion) in loan guarantees.
In future, Vosskuhle said there should be greater involvement from parliament in such decisions.
"The government is obligated in the cases of large expenditures to get the approval of the parliamentary budgetary committee," Vosskuhle said.
The suits were filed by Conservative legislator Peter Gauweiler and a group of professors who challenged the bailout.
They argued that parliament's budgetary rights were undermined by the country's participation in the bailout packages, among other things.
Europe's response to the debt crisis has already been criticized as too slow, and additional requirements to consult parliament could slow the fund's reaction time to the crisis.
European leaders agreed to increase the bailout fund's flexibility at a July 21 summit, giving it the right to buy the bonds of financially weak governments, help recapitalize banks, and quickly loan money to countries before they get into a full-blown debt crisis.
But the changes have run into hurdles. Finland has demanded collateral from Greece for its contribution, leading to more negotiations, while a junior governing party in Slovakia says no vote can be held until December.
The ruling comes ahead of a vote in Germany's lower house of parliament at the end of the month on whether to increase the size and scope of the EFSF, which is widely expected to pass.
Meanwhile in France, the country's lower house of parliament is voting Wednesday on whether to approve the Greek bailout and an austerity budget meant to trim France's deficit and help it afford rescuing fellow eurozone economies.
The National Assembly, dominated by President Nicolas Sarkozy's conservative party, is near certain to approve the measure, though leftist critics have attacked some of the spending cuts in the new budget.
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