Lawyers demand injunction against German bailout

24th October 2008, Comments 0 comments

The challenge alleges that the act of parliament is unconstitutional because it lacks a provision requiring financial aid to be repaid to the state.

Nuremberg, Germany -- A group of lawyers is demanding an injunction from Germany's highest court to stop one of the biggest financial rescue plans in the world.

Germany last week legislated 480 billion euros (605 billion dollars) in aid to troubled banks as part of a uniform plan by western nations to guarantee interbank lending and inject new equity.

Klaus Kratzer, a Nuremberg lawyer, said Thursday the challenge alleges that the act of parliament is unconstitutional because it lacks a provision requiring financial aid to be repaid to the state.

Kratzer, who specializes in business law, three law professors and two other legal practices would file suit Friday with the Federal Constitutional Court in Karlsruhe, he told DPA.

The legislation was rushed through on Oct. 17, six days after Britain and the eurozone nations agreed in Paris on the concerted scheme.

The first German bank, Bayern LB, has already announced it will seek aid from the 70-billion-euro equity fund. Also in the plan is a 400-billion-euro guarantee fund.

DPA/Expatica

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