The signing of the formal agreement to lend 100bn euros to recapitalize Spain’s banks was expected to be made on July 20. However, Germany’s Constitutional Court ruled July 16 that they will not pass a ruling until September 12. The majority of German politicians have backed the loan but the court must ratify it.
Ninety percent of the European bailout funds must be signed off by member countries before the European Stability Mechanism (ESM) can go into effect. Because Germany will contribute 27% of the loan, the ESM will stall until the German courts pass their ruling. There’s a jittery summer ahead for the euro market, and yet more uncertainty for European countries in dire need of help.