German court gives parliament more say in bailouts

Germany's top court said on Tuesday a parliamentary panel set up to approve urgent action by the euro zone bailout fund was "in large part" unconstitutional, in a ruling that may hamper Berlin's ability to tackle Europe's debt crisis.
In the second sign in two days of Chancellor Angela Merkel's shrinking political room for manoeuvre in the euro crisis - she only narrowly mustered her own majority in Monday's vote on a new Greek bailout - the Federal Constitutional Court demanded fuller consultation of MPs. The verdict means either a full session of the 620-strong Bundestag (lower house of parliament) or its powerful 41-member budget committee will have to be convened each time a decision has to be made on the use of the euro zone's bailout fund.
The special panel of nine MPs, which meets in secret, will only be allowed to approve the purchase of debt on the secondary bond market by the fund - a facility unused so far. It may not approve loans or precautionary credit lines for troubled euro member states like Greece or the capitalisation of banks.
The red-robed president of the court in Karlsruhe, Andreas Vosskuhle, cited the need to guarantee "as much parliamentary legitimisation as possible" in upholding a complaint by two opposition MPs that the panel infringed the basic right of lawmakers to decide on budgetary matters. "The smaller the size of the committee, the less representative it is," said fellow judge Peter Huber.
Finance Minister Wolfgang Schaeuble had urged the court to leave intact the powers of the special parliamentary panel, warning that the European Financial Stability Facility's (EFSF) ability to act with the requisite speed might be harmed. His deputy Steffen Kampeter told reporters the verdict would reinforce the budget committee's role "as the finance ministry's point of contact" on bailouts, while letting the panel decide on bond buying was "an important signal to capital markets".
The ruling will not affect Monday's decision by the Bundestag to approve a second, 130-billion-euro ($174-billion) bailout package for Greece. But that vote showed that lawmakers, like the public, are tiring of having to keep making new commitments to bail out the likes of Greece, Portugal and Ireland, and object to their powers over such budget-related issues being curtailed.
"This should be a lesson for parliamentary floor leaders to think these things through," said Peter Danckert, one of two MPs from the opposition Social Democrats who filed the complaint. "The ruling gives more power to parliament," Volker Beck of the opposition Greens told reporters at the courthouse. Norbert Lammert, the speaker of the Bundestag from Merkel's Christian Democrats who is a strong defender of parliamentary control, welcomed the ruling as "logical and convincing".
"In terms of atmosphere it's not good when the population think there is a small panel that can make enormous decisions that the taxpayer will later have to pay for," said economic policy professor Manfred Neumann of Bonn University.
With Merkel's ability to pass legislation on the euro crisis increasingly at risk - 17 MPs from her centre-right coalition rebelled against the Greek package on Monday, up from 13 who defied her in a vote on the bailout fund last September - the panel would have given her more room for manoeuvre. It was set up to take urgent decisions on behalf of the powerful Bundestag budget committee when it comes to especially urgent or confidential matters.