Fate of eurozone rests in the hands of German judges

So the eyes and ears of the eurozone will be on the eight red-robed judges of Germany's highest court this week when they deliver a long-awaited verdict over whether a financial rescue fund considered crucial to the future of the euro gets the green light.

The constitutional court is under international pressure to rule in favour of the European stability mechanism and fiscal pact. A dissenting ruling from the court, based in Karlsruhe, southwestern Germany, would probably cause havoc on money markets and cast doubt on the future of Europe's single currency.

"The German constitutional court cannot afford to be seen as not being independent, but it also cannot afford to be seen as the court that brought down the government," said Constanze Stelzenmüller, a senior transatlantic fellow at the German Marshall Fund in Berlin. "They're going to have to try to square the circle; in other words, not bring down the government at the same time as asserting their independence."

The ruling, due on Wednesday, is expected to give the go-ahead to the ESM, a permanent bailout mechanism, and the fiscal pact, but with caveats such as constraints on future decision-making or a ruling that Germany's basic law has to be rewritten if there is to be further EU integration, Kazinform has learnt from the Guardian.

A government insider told the Observer, on condition of anonymity, that the court "is very independent and always good for a surprise. Nobody knows what will happen on 12 September." A poll published on Friday on Spiegel Online showed that 54% of Germans were in favour of the court blocking the legislation, reflecting the degree to which public opposition to bailouts is increasing.

The poll was released a day after the European Central Bank president, Mario Draghi, divulged plans for making unlimited bond purchases to lower borrowing costs for crisis countries in the eurozone. The announcement unleashed a wave of condemnation across much of Germany's media and among a growing band of eurosceptics, who said the scheme would stoke inflation. German fears of a repeat of its 20th-century experiences of hyperinflation and the catastrophic consequences run deep.

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