BERLIN, July 27 A group of professors has lodged
a complaint with Germany's Constitutional Court against Europe's
planned banking union, which starts work in November, Welt am
Sonntag newspaper reported on Sunday.
The union is Europe's main confidence-building response to
the financial sector crisis. Under the plans, the European
Central Bank will take over as banking watchdog and will have
the means to shut lenders it decides are too weak to survive.
"The banking union has no legal basis in European treaties
and so represents a breach of the Basic Law," Berlin lawyer
Markus Kerber, a professor in public financial and economic
policy, was quoted as saying in the paper.
He added the rules represented a first step towards new
liabilities for German taxpayers for banks outside national bank
"A European banking union could have only been introduced
with a change to the EU treaties," Kerber said in the Welt am
No-one was available at the Constitutional Court to comment
on the report.
Germany's cabinet passed a package of draft laws on the
banking union earlier this month.
Once in place, the European plans will mean there is one
supervisor for euro zone banks, one set of rules to close or
restructure troubled banks and one pot of money to pay for
To minimise the expense to euro zone taxpayers, EU
policymakers have drawn up rules under which shareholders,
creditors and very large depositors will lose money first in the
event of a bank failure.
The Constitutional Court, based in the south-western city of
Karlsruhe, has a history of delaying, but not blocking, EU
treaties to test their compatibility with German law. Its judges
have several times imposed the condition that Germany's
parliament has to be fully consulted.
Earlier this year the Court upheld the legality of the euro
zone bailout fund.
(Reporting by Madeline Chambers; Editing by Toby Chopra)