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Forgive Us Our Debts

Spain looks north for a bailout.

Jul 30, 2012, Vol. 17, No. 43 • By CHRISTOPHER CALDWELL
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Maybe. For now, the very means by which the money is to be delivered is in doubt. The ESM was supposed to be up and running this month. But in June Germany’s Left party asked the constitutional court to rule on its constitutionality. The court has taken the suit with the utmost seriousness. Germany has always found it hard to say “No” outright to the mendicant nations of the European south. Even seven decades after World War II, its first priority is always to prove itself a good neighbor. But for the very same reason, it insists on doing so only in strict accordance with constitutional forms. The ESM is a semi-accountable authority dreamed up by two dozen panicked foreigners at 3 o’clock one morning last winter. To give it billions in taxpayers’ money raises questions of due process and taxation without representation. The constitutional court decided the Left party’s question was a worthy one. It will rule September 12 on whether the ESM can be used at all. Until then, Spain’s bailouts will be carried out under the EFSF, an older bailout mechanism.

Finance Minister Schäuble wanted the court to move faster than that. He warned that too slow a vote could make investors nervous and cause “significant disturbances” in the markets. Such pronouncements leave one with an uneasy feeling. Under pressure of the financial crisis, the eurozone has become a place where countries’ laws follow investors’ whims, and not vice versa.

Christopher Caldwell is a senior editor at The Weekly Standard.


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