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| Global Stocks Rise on German Court Approval of Euro Bailout Fund | Global Stocks Rise on German Court Approval of Euro Bailout Fund |
| (about 1 hour later) | |
| PARIS — Global stocks and the euro rose on Wednesday after a German court gave its approval to an expanded euro zone rescue plan. | PARIS — Global stocks and the euro rose on Wednesday after a German court gave its approval to an expanded euro zone rescue plan. |
| The Constitutional Court in Karlsruhe found that the new European Stability Mechanism, the permanent bailout fund the euro zone has concocted, did not conflict with German law. It did find that Germany’s liabilities must be limited, and said both houses of the German Parliament had responsibility for monitoring the fund. | The Constitutional Court in Karlsruhe found that the new European Stability Mechanism, the permanent bailout fund the euro zone has concocted, did not conflict with German law. It did find that Germany’s liabilities must be limited, and said both houses of the German Parliament had responsibility for monitoring the fund. |
| The court rejected a case brought by a group of German lawmakers and citizens that called for a temporary injunction against their country’s participation in the mechanism. | The court rejected a case brought by a group of German lawmakers and citizens that called for a temporary injunction against their country’s participation in the mechanism. |
| Germany’s participation is essential for the bailout fund’s operation, and the court’s rejection of the plan would have destroyed the underpinnings of the European Union’s hopes for overcoming the crisis of confidence in government finances that has rocked the bloc beginning late 2009. | Germany’s participation is essential for the bailout fund’s operation, and the court’s rejection of the plan would have destroyed the underpinnings of the European Union’s hopes for overcoming the crisis of confidence in government finances that has rocked the bloc beginning late 2009. |
| In afternoon trading, the euro rose to $1.2922 from $1.2855 late Tuesday in New York. The Euro Stoxx 50 index, a barometer of euro zone blue chips, gained 0.8 percent. Trading in Standard & Poor’s 500 index futures suggested Wall Street stocks would get a lift at the opening bell. Asian stocks were higher across the board. | |
| In the debt market, the battlefield on which the euro crisis has played out, the reaction was also positive. Spanish and Italian 10-year bonds rose in price, and their yields, which move in the opposite direction, fell. And in an auction in Rome, the Italian Treasury on Wednesday sold one-year and three-month debt at sharply lower rates than it had obtained in the last such auctions. | |
| On a fraught day for the future of the euro, Michel Barnier, the E.U. commissioner in charge of trade, was to present a plan for banking supervision in the euro zone to come under the responsibility of the European Central Bank. European leaders agreed in June to implement so-called “banking union” to bring new scrutiny and discipline to the lenders. | |
| José Manuel Barroso, the president of the European Union’s executive arm, the European Commission, on Wednesday called for more political integration within the Union, and for another change to the bloc’s governing treaty to make a success of its single currency. | |
| “A deep and genuine economic and monetary union can be started under the current treaty, but can only be completed with changes in the E.U. treaties,” Mr. Barroso said to the European Parliament in his annual “state of the union” address in Strasbourg, France. | “A deep and genuine economic and monetary union can be started under the current treaty, but can only be completed with changes in the E.U. treaties,” Mr. Barroso said to the European Parliament in his annual “state of the union” address in Strasbourg, France. |
| Changes to the E.U. treaties require unanimous agreement among the 27 national governments in the bloc and, sometimes, referendums in some countries, making them extremely difficult to secure. | Changes to the E.U. treaties require unanimous agreement among the 27 national governments in the bloc and, sometimes, referendums in some countries, making them extremely difficult to secure. |
| Mr. Barroso said that his successor should have more democratic legitimacy, and that political groupings in Europe should each propose one nominee for the job before the next elections to the European Parliament. Currently the European Commission president is selected by national governments then approved by the European Parliament. | Mr. Barroso said that his successor should have more democratic legitimacy, and that political groupings in Europe should each propose one nominee for the job before the next elections to the European Parliament. Currently the European Commission president is selected by national governments then approved by the European Parliament. |
| “I call for a federation of nation states, not a superstate,” said Mr. Barroso, adding “we must not allow the populists and nationalist to set the agenda” | “I call for a federation of nation states, not a superstate,” said Mr. Barroso, adding “we must not allow the populists and nationalist to set the agenda” |
| Mr. Barroso also warned of the dangers of populism in Europe and said the euro crisis was contributing to the rise in extremism. | Mr. Barroso also warned of the dangers of populism in Europe and said the euro crisis was contributing to the rise in extremism. |
| And in the Netherlands, voters were going to the polls Wednesday for an election in which the euro zone bailouts have figured heavily, with many Dutch opposed to further aid to Europe’s ailing southern tier. No single party is expected to take a majority, with a likelihood that political horse-trading to form a coalition government could go on for some time. | And in the Netherlands, voters were going to the polls Wednesday for an election in which the euro zone bailouts have figured heavily, with many Dutch opposed to further aid to Europe’s ailing southern tier. No single party is expected to take a majority, with a likelihood that political horse-trading to form a coalition government could go on for some time. |
| The growing confidence that the bailout fund will see the light of day, along with the European Central Bank’s strong support for ailing governments in Spain and Italy, has helped to restore some normality to a European market that has at times appeared | The growing confidence that the bailout fund will see the light of day, along with the European Central Bank’s strong support for ailing governments in Spain and Italy, has helped to restore some normality to a European market that has at times appeared |
| The E.C.B. made its support clear on Sept. 6, when the central bank’s president, Mario Draghi, said the institution would give unlimited financial backing to Spain and Italy, signaling his readiness to buy their government bonds to drive down yields in return for their commitment to budgetary discipline. | The E.C.B. made its support clear on Sept. 6, when the central bank’s president, Mario Draghi, said the institution would give unlimited financial backing to Spain and Italy, signaling his readiness to buy their government bonds to drive down yields in return for their commitment to budgetary discipline. |
| One of the questions hanging over the new bailout fund is whether and when Spain, the most urgent candidate for support, will ask for a rescue. Newspapers in Finland on Wednesday reported that the Spanish prime minister, Mariano Rajoy, might ask for the central bank’s bond-buying support without requesting a full bailout, Reuters reported. | One of the questions hanging over the new bailout fund is whether and when Spain, the most urgent candidate for support, will ask for a rescue. Newspapers in Finland on Wednesday reported that the Spanish prime minister, Mariano Rajoy, might ask for the central bank’s bond-buying support without requesting a full bailout, Reuters reported. |
| Stephen Castle reported from London. |