News Column

Eurozone Bailout Advances

September 26, 2012

Germany's government approved Wednesday a supplement to the treaty setting up the European Stability Mechanism (ESM), a key step in shoring up the eurozone against its three-year-old debt crisis.

The rider, described as an "interpretative declaration," meets demands from Germany's Constitutional Court for an explicit ceiling on German liability and guarantees that the parliament in Berlin will be kept briefed.

Chancellor Angela Merkel was to meet the head of the International Monetary Fund (IMF), Christine Lagarde, after the cabinet meeting. No press conference was planned, but the meeting centres on the eurozone crisis.

The ESM, which was originally meant to go into operation in July, has been on hold because of the German court case. Judges two weeks ago cleared the ESM, provided the rider was attached. Once Germany has ratified the treaty, it will take effect, likely next month.

The declaration says, "No provision of the treaty may be interpreted as leading to payment obligations higher than the portion of the authorized capital stock corresponding to each ESM member."

It also states that other parts of the treaty "do not prevent providing comprehensive information to the national parliaments."

The text issued in Berlin as a parliamentary document said the rider was to be jointly adopted by all the ESM nations in Brussels.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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