German court considers challenge to EU bail-outs

Judges arrive for a trial on euro bail-out at the German Constitutional Court in Karlsruhe, 5 July 11
Image caption The Karlsruhe-based Constitutional Court is the highest court in Germany

Germany's Constitutional Court is hearing a challenge to the country's participation in bail-outs of Greece, the Republic of Ireland and Portugal.

A Berlin professor argues that the process violates constitutional provisions and should be blocked.

Germany's finance minister rejected the claim, saying all rescue packages had been made on solid legal ground.

The complaint comes as EU negotiations continue over a second Greece bail-out, worth about 120bn euros (£108bn).

The BBC's Stephen Evans in Berlin says it is unclear how the court will rule, but acceptance of the plea could throw the bail-outs into disarray, sparking a political crisis.

However, experts say the court is unlikely to block Germany's participation in the eurozone bail-outs altogether.

'Not an easy path'

The plaintiffs argue that the rescue packages go against certain German and European constitutional clauses, ranging from the right to democratic representation to the protection of property.

They also say it breaks the EU's "no bail-out clause", which says neither the EU nor member states should take on a government's liabilities.

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Media captionProfessor Markus Kerber told the BBC's Stephen Evans why he believes bail-outs are illegal

Professor Markus Kerber said the bail-outs were negotiated between international bodies, such as the European Central Bank and International Monetary Fund, denying parliament its right to control German public funds.

Other plaintiffs include Peter Gauweiler, an MP from the Christian Social Union, the Bavarian sister party to Chancellor Angela Merkel's conservatives.

On his way into court, German Finance Minister Wolfgang Schaeuble said the government had complied with both the German constitution and European treaties.

He also said that strict conditions had been put on countries which had received aid.

"If you look at the arguments in Greece, then you won't have the idea we gave Greece an easy path," he said, according to AP news agency.

Our correspondent says that, whatever the outcome, the government will have to justify its position in court and will be mindful of what the court will say.

He says that ministers will consider this when negotiating the second Greek bail-out, so they do not have to face the court again.

Together with the IMF, the EU has approved packages for Greece, Ireland and Portugal totalling 273bn euros ($395bn; £247bn).

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