German court backs eurozone's ESM bailout fund

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

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

The German government welcomed the decision, while markets rose in relief.

Member of the ruling coalition Joachim Spatz told BBC news that the ruling was "clear landmark" that the German parliament was in control of the country's financial obligations to the eurozone.

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