German court approves European Stability Mechanism plan

Germany's constitutional court has given the eurozone bailout fund the green light.

The ruling dismissing a challenge to the European Stability Mechanism (ESM) plan has been handed down this morning, but the court has attached a number of conditions to their decision.

The court said any financial cost for Germany arising from the ESM must be strictly limited to its share of the fund's capital or €190bn.

If the costs were to be increased beyond that, it could only be done with the approval of the German parliament.

Markets had been expecting the outcome, and the euro had surged in value in recent days.

The €500bn ESM will replace the European Financial Stability Facility.

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