Germany’s current liability to the bailout is a bit over $240 billion. The court said that the national legislature must vote on any addition to that.
Germany’s ability to participate does not mean it will expand its commitments. The population of the country remains against aid to countries that it believes have gotten themselves into their own trouble, and should pay the price to get themselves out, even if it means default on sovereign obligations. Many politicians have broken ranks with Angela Merkel, who has given limited support to bailout conditions. The politics of Germany may pressure her to change that support.
And Germany continues to insist on severe austerity budgets, which it says have to be put in place before nations get aid. Even the ECB, which recently said it would buy the paper of troubled nations to bring down their borrowing costs, agrees that for countries to get aid they must ask for it and show something beyond an inclination to get their financial houses in order.
The court’s approval allows Germany to lead the way to bail out parts of Europe. But it does not mean Germany will do so.
Douglas A. McIntyre
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