The constitutionality of the new European bailout fund is under question in Germany, and could bring down the country’s support for the program, according to Handelsblatt.Our rough translation of the report suggests that the new ESM would grant automatic funds for the bailout measures taken in Europe from sovereign members of the European Union. If one member didn’t have the means to pay, more money would be taken from other members, according to Reuters.
This measure has the potential to break the balanced budget rule in Germany, and thus it could be ruled un constitutional.
The warning on the issue came from Germany’s Federal Court of Auditors, which has now led to calls to require a parliamentary veto on ESM payments, according to Reuters.
This could destabilize the progress of the latest EU reforms and is also likely to put German Chancellor Merkel under further pressure in an already difficult domestic situation.