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Relief rally on German ruling

Wednesday, September 07, 2011 - 01:42

Sept 7. - European markets are boosted by a decision by Germany's top court which approves participation in the euro zone bailout with some reservations. Ciara Sutton reports.

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Markets got a much anticipated relief rally in early trade as Germany's top court cleared the way for Berlin to contribute towards bailout packages. But the court says further aid for debt-ridden countries will require parliamentary approval, and is by no means a "blank cheque". Shortly after the ruling, the DAX was up 2.85 per cent. Robert Halver is from Baader Bank. (SOUNDBITE) (English) ROBERT HALVER FROM BAADER BANK AG, SAYING: "The decision of our Supreme Court did not come in as a big surprise. The markets had already expected this and I guess in the future, we will have more rescue packages for the euro zone." World stocks steadied after a two-week low, with Asian stocks closing higher after 3 days of losses. The euro also rebounded after positive data from the U.S. and Australia. But sceptics called the rebound short-term, as fears over the euro zone debt crisis continue. The decision puts Germany in a similar position to Finland. Parliament will make the decision over aid rather than the government. And Peter Dixon from Commerzbank says this could jeopardise the euro zone recovery. SOUNDBITE (ENGLISH) PETER DIXON, COMMERZBANK SAYING "This will potentially slow the rate of progress needed in the euro zone debt crisis problem, and also risks the likelihood that many of the more radical and necessary measures which will have to be put forward, will be struck down". Their decision may have brought initial relief to markets - but German politics will now have even more influence on the euro zone debt crisis. Ciara Sutton, Reuters

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Relief rally on German ruling

Wednesday, September 07, 2011 - 01:42