Rising risk that German court will block Bundesbank rescue for Southern Europe

The risk is rising that the German constitutional court will severely restrict the eurozone bond rescue scheme for Italy and Spain, and may reignite the euro debt crisis by prohibiting the German Bundesbank from taking part.

The Frankfurter Rundschau newspaper reports that the verdict has been delayed until April due to the complexity of the case and "intense differences of opinion" among the eight judges.

The longer the case goes on the less likely it is that the court - or Verfassungsgericht - will rubber stamp requests from the German government for a ruling that underpins the agreed bail-out machinery.

"This is potentially very serious, particularly at a time when people are already worried about emerging markets," said one expert close to the case. "We doubt that the Court will ban bond purchases outright but they could demand changes that greatly complicate the picture."


[link to www.telegraph.co.uk]