German Constitutional Court ruling on European Stability Mechanism (ESM) expected in session today (said to be around 05:00 ET (09:00 GMT)
- Germany's highest court will make its final ruling on the legality under national law of the European bailout fund, the ESM
- It has previously backed ESM in principle **Note: (In September 2012 it saw no obstacles to Germany taking part in the mechanism if given sufficient parliamentary oversight)
**Note: Germany's share of these guarantees amounted to €190B (most of any other country). Germany was one of the last countries in the region to ratify the ESM, in late 2012)
**Reminder: On Feb 7th the German Constitutional Court refered the ECB's OMT Bond Buying scheme to the European Court of Justice (ECJ) and stated that it had substantial reasons to believe that OMT bond buying scheme exceeded the ECB mandate (German justices expressed this doubt in a 6-2 vote)
- German Court did not seek fast track EU court probe of OMT ("Under the normal timetable, the European Court of Justice could take 18 months to issue its ruling (16 months on average), though under fast-track provisions, a decision could be made this year. Fast track process would alow a case to be handled in as little as 4 months)
** Note: The ESM program offers funds (bailouts) to Eurozone members in financial difficulty; ESM currently has a total lending capacity of €500B
** Note: The OMT program allows the ECB to purchase sovereign bonds on the secondary market of a troubled country that makes a request for assistance. The ECB initiative had been credited with restoring calm in Europe after the famous Draghi London speech in 2012 in which he declared that he would do 'whatever it take's to save Europe from the crisis