All eyes on ESM ruling

The rest of the week is devoted to budget debate in the German parliament, or Bundestag, but the direction the discussion takes will likely be influenced by a decision Germany's Constitutional Court is scheduled to make on Wednesday.

Tuesday, the court in Karlsruhe said it would not postpone its long-awaited ruling, despite a last minute challenge from euroskeptic politician Peter Gauweiler.

Alongside a number of other opponents, Gauweiler - a backbench lawmaker in Chancellor Merkel's conservative bloc - had argued that the European Stability Mechanism (ESM) and the European fiscal pact would violate Germany's constitution. They say it would result in Berlin no longer having complete control over budgetary decisions.

But in a short statement issued on Tuesday, the Federal Constitutional Court said it would nevertheless go ahead with its long-anticipated ruling.

Finance Minister Wolfgang Schäuble is confident that the court will uphold the measure and defended the role of the European Central Bank in the eurozone debit crisis.

"The independence of the ECB must be upheld and respected," he said on Tuesday during the Bundestag debate. He added that the causes of the eurozone crisis came from "mistakes in the financial and economic policies of eurozone members." Therefore the eurozone, he said, was where the problems needed to be solved.

Schäuble also addressed Germany's role in helping to turn the crisis around. Should the ESM be approved, Germany would be one of the leading contributors to the eurozone's bailout fund.

"We are, in all modesty, an example for many European countries," he said.

The Bundestag approved the ESM and the European fiscal pact in a parliamentary session two months ago, but President Joachim Gauck delayed signing the legislation into law after a number of legal challenges were filed against it.

Should the Constitutional Court rule against the ESM and the fiscal pact, both would be essentially rendered dead in the water, and the eurozone will be left without the cornerstone of its strategy to combat the sovereign debt crisis.

mz,ccp/ rc (dpa, AFP, Reuters, AP)