The euro is under pressure as the launch of the euro zone permanent bailout fund has been delayed. The European Stability Mechanism (ESM) was supposed to begin operations on July 1st. However, it is faced with a road block after Germany has delayed its ratification.
The German Federal Constitutional Court heard testimony on several complaints lodged by plaintiffs trying to block the German government’s ratification of the ESM.
The court may take several months in order to examine the case and issue a verdict, keeping the 500 billion euro bailout fund from beginning its work.
German Finance Minister Wolfgang Schaueble said on Wednesday he hoped Germany’s Constitutional Court would pass a judgement on the EU’s bailout fund and the fiscal pact before autumn.
“We are in a very serious situation. Nobody can predict what will happen,” Schaueble said.
But he says he will not put pressure on the German government.
He added that he was confident the court would rule that the European Stability Mechanism (ESM) and fiscal compact were compatible with the constitution.
In early European session trading, euro hit a fresh 3-1/2 year low against the British pound, touching 78.85 pence. Against the dollar, euro is hovering at a two-year low of $1.2234 reached on Tuesday.