Tuesday, February 28, 2012

German Constitutional Court bolsters German Parliament

The Chicago Tribune reports as follows:

The German constitutional court ruled that parliament may not delegate most decisions on disbursing bailout funds to a special committee meeting in secret, as Merkel had planned after a previous ruling bolstered lawmakers' oversight powers....

In a case brought by two opposition lawmakers, the court said a nine-member sub-committee created to approve urgent action by the bailout fund was "in large part" unconstitutional because it infringed on the rights of other deputies.

The judges said the panel may approve price-sensitive debt purchases on the secondary market by the EFSF bailout fund, since confidentiality was essential in such operations.

But they denied it the power to authorize loans or preventive credit lines to troubled states or for the recapitalization of banks.

While not a show-stopper, the decision means parliamentary deliberations on future rescue operations could be slower and more cumbersome, since the full 41-member budget committee or the entire 620-member lower house will have to decide.

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