Once again, the German constitutional court could throw the euro into chaos when it issues a preliminary ruling on Germany’s participation in the rescue mechanism for fiscally troubled euro members.
Analysts say the judges may eventually impose restrictions on the German government that could make decision making even more cumbersome than it already is. The court could well require a vote by the German Parliament every time the bailout fund, the European Financial Stability Facility, makes a big move. The court might also make it more difficult for Europe to issue common debt in the future or take other steps toward a more intimate fiscal union.
In this context it is not surprising that many pessimistic editorials have recently appeared in Europe.
Here is one, from Andrzej Talaga’s blog in the Polish paper Rzeczpospolita (July 4):
“The ESM European bailout mechanism simply doesn’t work and the EU is going to have to split up. The collapse of the German–French motor for integration is just a matter of time. Greece and perhaps even Spain will have to leave the Eurozone. The UK will exit the EU of its own volition. And the Germans will form a coalition with those who share their views. In the end everyone will breathe a sigh of relief, even if this ‘revolution’ causes great pain initially.”