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German court rejects request to block Greece aid

Reuters
Saturday 08 May 2010 11:52 BST
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Germany's highest court said on today it had rejected a request from a group of academics to block the immediate release of a German loan to Greece, allowing the financial aid to flow to debt-stricken Athens.

The five academics had argued that the financial aid - part of a euro zone/International Monetary Fund package - was not provided for under European Union treaties and would give rise to inflationary policies.

The constitutional court rejected their request to prevent the immediate flow of loans to Greece, which asked for the aid to cope with a debt crisis that has rocked financial markets and brought the future of European integration into question.

"The complainants did not present concrete evidence that their rights, in particular as regards article 14 (on property rights) of the basic law (constitution), would be severely and irreversibly affected as a result of the guaranteed loan," the court said in a statement.

A spokeswoman for the court said it had yet to decide on the plaintiffs' parallel challenge to the legality of the aid but that this would not happen any time soon - meaning any ruling would be probably be academic as Germany would likely have already released the funds to Greece.

Four of the academics had previously lost a challenge to the introduction of the single currency in Europe.

Germany's parliament yesterday approved a bill on Germany's contribution to the multi-billion euro rescue package for Greece, despite widespread public opposition to the measure, and President Horst Koehler signed it into law.

The law could see Germany lend 22.4 billion euros (£19.3 billion) to Greece over three years.

Despite initial resistance to agreeing Greek aid due to massive popular opposition to a bailout, German Chancellor Angela Merkel said earlier this week the future of Europe depended on approving the package.

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