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Europe’s Crisis Goes to Court

TILBURG – Throughout Europe and beyond, economists are debating potential solutions to the eurozone’s sovereign-debt crisis. But these discussions often neglect, or at least downplay, one crucial element of any resolution: the German Constitutional Court (Bundesverfassungsgericht) in Karlsruhe, which is responsible for determining whether measures taken by Europe’s leaders are legal under German law.

On September 12, the court will determine whether the European Stability Mechanism (ESM), Europe’s permanent emergency fund, complies with Germany’s constitution. Although German policymakers backed the ESM in June, ratification is on hold until the court’s ruling.