In a speech that many onlookers called her most important, Merkel said the constitutional court's ruling reinforced her government's policies and paved the way for further reforms to the way the EU manages its debt.
Merkel faces growing dissent in her national parliament, the Bundestag, as her government is blamed for rubber-stamping bailouts without seeking parliamentarians' approval and for increasing taxpayers' financial liability in tackling the debt crisis.
In an evocative speech about the euro's future the leader took a stab at her erstwhile socialist opponents, who are blamed for killing the credibility of the EU's debt rules (the Stability and Growth Pact) by sidelining calls from the European Commission to bring down its budget deficit.
"It is quite a paradox that virtually all violations of EU rules, whether economic or environmental, lead to verdicts from the European Court of Justice, but that violations of the Stability and Growth Pact cannot be looked at by the court. We need to think about these issues," Merkel said.
The leader also insisted that the EU needs to think seriously about treaty change to forge a stronger union capable of pressuring wayward economies into making the necessary cuts to counteract their mounting debts.
The Stability and Growth Pact is currently being redrawn in Brussels to make sure that sanctions for budget offenders are more automatic and that countries cannot dismiss the Commission's demands.
Yesterday the European Parliament issued a statement which heralded progress in the pact's review but big bones of contention still stand in the way of an agreement.
Parallel to these talks, Merkel has been forging plans for a fiscal union with Germany's traditional ally, France. The union envisaged by Merkel would give Brussels more power over the country's fiscal policies, requiring a change to the EU's Lisbon Treaty.
Bundestag vote on EFSF
But before the chancellor can make any more bold moves she faces a growing challenge to her leadership. Some of Merkel's supporters have threatened to oppose new powers for the euro zone's rescue fund in a parliamentary vote later this month.
The Bundestag is unhappy that the bailout fund, the European Financial Stability Facility, has been earmarked to make straight bond purchases, a move which could up Germany's already large share of rescuing the euro zone by a substantial amount.
The constitutional court's ruling yesterday is therefore a relatively small hurdle compared to the pending Bundestag vote on the EFSF.
In addition, the court's decision may have made matters worse for the chancellor as each bailout will first require the approval of the Bundestag's budget committee before it can be agreed at EU level.
Members of parliament must be given the opportunity to review the aid and also stop it if needed, the ruling said.
Claire Davenport
COMMENTS
The Lisbon Treaty must be at least repaired and consequently re-ratified:
1. Annex I to the Lisbon Treaty (very important list of products supported by the CAP) is constructed on the basis of Brussels nomenclature -- the system which does not exist for more than 20 years.
2. Articles 174 and 178 of the Lisbon Treaty (TFEU) refer to non existing European Agricultural Guarantee and Guidance Fund (EAGGF). Thus support of Rural development under the CAP through European Agricultural Fund of Rural Development (EAFRD) goes beyond the mandate provided by the Lisbon Treaty.
3. Support for forestry and forestry products implemented as a part of CAP measures is illegal in accordance with provisions of the Lisbon Treaty.
It is time to oppose this German led drift into the most rigid economic and financial policies imaginable. Public deficits have to be allowed to fluctuate as stabilisers as the economic cycle develops. When the downturn is massive, the public sector deficits have to rise to counteract this trend; If the German led "Golden Rule" is imposed on the rest of the Euro zone, there will be a Japan like situation of prolonged recession. It must be opposed.
So that's two opposing views to the British, even using the final view to skewer the British held one with really twisted thinking.. as if the British are ever going to be fore this (or the Germans for that matter).
Even Marta used to work inside the EU, until she realised the corruption and blew the whistle.
You couldn't make it up.
To think Brussels should be given any further role in the mess they have created is obscene. The scheme is dysfunctional by design, it is designed to serve individual countries interests by doing nothing of substance. It is not by chance that the Beligians don't have a government, illustrative of their extreme capability to serve only the interest of the countries emloyment machine, full of graft and corruption. Time to end the charade.
Help, I've been infmored and I can't become ignorant.
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