August 14, 2012 / 9:06 AM / 7 years ago

UPDATE 1-German top court sees no reason to delay ESM ruling

KARLSRUHE, Germany, Aug 14 (Reuters) - Germany’s Constitutional Court sees no reason to delay a ruling scheduled for Sept. 12 on the legality of the euro zone’s permanent bailout fund and a separate pact on budget discipline.

On Monday, a group of German academics said it was seeking to delay the hotly anticipated ruling by the country’s top court on whether the European Stability Mechanism (ESM) and the so-called fiscal compact violate German law.

“Delaying the date of the verdict is currently not indicated,” a spokeswoman for the court said.

Europolis, a group led by German academic Markus Kerber, said the Karlsruhe-based court should make no decision until the European Court of Justice has ruled on a similar case brought by an Irish member of parliament.

Alternatively, Europolis said, Karlsruhe should refer its own decision to the higher court, following the example of Ireland’s High Court.

The German court said last month it would announce its decision on the bailout fund and fiscal pact on Sept. 12, a verdict that will be watched closely around Europe as the fund cannot be launched without German approval.

Germany cannot legally ratify the two treaties without the go-ahead from the court. Constitutional experts expect the court to approve the treaties but to set hurdles and limits.

The ESM, which would boost the firewall against debt crisis contagion to 700 billion euros, had originally been due to come into effect on July 1.

It needs ratification by countries representing 90 percent of its capital to be implemented - meaning it cannot be launched without Germany, whose parliament has already approved both pieces of euro crisis legislation by a large majority.

The court will rule on complaints from eurosceptic academics and some lawmakers from Chancellor Angela Merkel’s own coalition that the ESM and fiscal pact violated German law by taking away responsibility for the budget from parliament.

A European Court of Justice official declined comment and could not say when a decision would be reached on whether to give the Irish case accelerated procedure status, which would reduce delays to a minimum but has no timeline set to it.

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