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Germany's constitutional court upholds participation in rescue fund for euro countries

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FRANKFURT, Germany — Germany's constitutional court has upheld the country's participation in a fund that can bail out troubled governments in the eurozone.

The court in Karlsruhe ruled Tuesday that being part of the fund did not violate the German parliament's right to decide how taxpayer money is spent.

PHOTO: An emergency phone at a tram stop stands near the Euro sculpture in front of the European Central Bank in Frankfurt, Germany, Tuesday, March 18, 2014. Germany's constitutional court has upheld the country's participation in a fund that can bail out troubled governments in the eurozone. The court in Karlsruhe ruled Tuesday that being part of the fund did not violate the German parliament's right to decide how taxpayer money is spent. (AP Photo/Michael Probst)
An emergency phone at a tram stop stands near the Euro sculpture in front of the European Central Bank in Frankfurt, Germany, Tuesday, March 18, 2014. Germany's constitutional court has upheld the country's participation in a fund that can bail out troubled governments in the eurozone. The court in Karlsruhe ruled Tuesday that being part of the fund did not violate the German parliament's right to decide how taxpayer money is spent. (AP Photo/Michael Probst)

Germany is the largest backer of the fund because it is the biggest economy in the 18-country currency union.

The court had already indicated in a preliminary ruling in 2012 that the European Stability Mechanism, or ESM, did not violate German law, enabling President Joachim Gauck to sign off on ratification of the treaty that set up the fund.

The court has referred another important question — whether the European Central Bank can make unlimited purchases of government bonds — to the European Court of Justice.

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