German Court Backs Euro Rescue Fund KARLSRUHE, Germany - Germany's Federal Constitutional Court on Wednesday gave Chancellor Angela Merkel a significant victory in her bid to master the debt crisis that has buffeted the continent for years and endangered its common currency, granting approval to one of the key pillars of her strategy. Michael Probst/Associated Press The curve of the German DAX index is seen rising as Andreas Vosskuhle, the head of Germany's constitutional court, speaks on TV Wednesday morning. With the ruling, the 17 countries of the euro zone will be able to move ahead with the establishment of the European Stability Mechanism, something like a continental version of the International Monetary Fund. The mechanism will handle bailouts and work in tandem with the European Central Bank to buy the bonds of countries such as Italy and Spain that are straining under high interest rates. The court ruled that Germany could proceed with its contribution to the mechanism but set certain conditions, including a requirement for parliamentary approval of any increase in the agreed German contribution of 190 billion euros, or about $240 billion. While unlikely to still the crisis entirely, a rejection could have unleashed new waves of instability on the financial markets and thrown the fitful march toward European integration into question as the architects of the rescue rushed back to the drawing board. The court ruling cheered investors, with the Euro Stoxx 50 index of euro zone stocks rising 1.1 percent in morning trading to its highest point since March. The euro rose to $1.2885, its highest since May. Trading in index futures showed Wall Street stocks poised to gain at the opening bell. In explaining the decision, Andreas Vosskuhl, the court's president, said, "No one can say with certainty which measures will be best for the Federal Republic of Germany and the future of our united Europe in the current crisis." As such, it was "first and foremost those directly elected by the people," who should decide, he said. Underlining the powers of Germany's legislators, he said that the "elected lawmakers of the German Parliament, as representatives of the people, must retain the control over decisive budgetary questions." The court was not formally ruling on the constitutionality of what is intended as a long-term fund to bail out countries in financial trouble, but on requests to block the German president from signing the bill into law. The question before the court was whether the new fund would weaken the German Parliament's right to control the spending of German taxpayers" money. The ruling dealt a clear blow to euroskeptics in Germany who had tried to block the country's contributions, citing concerns that it would allow German taxpayers" money to be spent without their approval. Another judge, Peter Huber, rejected this idea, saying that the fund "does not hand over rights of budgetary decisions to any other actors." The fund, with its 500 billion euros, is intended to buoy struggling countries and help protect the common currency, an impossible mission without Germany, the European Union's largest economy. The hour of reckoning for the euro seems to arrive again and again, like clockwork, whether in a decisive vote in the Slovakian Parliament, a tough negotiation with Finland over its contribution to a bailout or the wee-hours summit meetings among European leaders in Brussels. The crisis has served as a crash course in the messy, circuitous nature of European decision-making. The winding path of the euro crisis, with its headspinning array of overlapping authorities found its way once again to this city in southwestern Germany. Indeed, spectators might be forgiven for a sense of déjà vu: little more than a year ago, the court ruled that bailouts of fellow euro zone member states did not violate the German constitution, known as the Basic Law. But now, with the court's evident support for the permanent bailout fund, Europe is moving beyond its common monetary policy into encouraging its core group of countries to develop a more unified fiscal policy as well.