'A decisive day'

President of the European Parliament Martin Schulz opened Wednesday (12.09.2012) morning's plenary session in Strasbourg with the words, "this will be a decisive day for Europe." Just over an hour later, when the news of the German Constitutional Court ruling came through from Karlsruhe, the announcement was greeted with a 20-second round of applause by European parliamentarians. The head of the Liberal group, Guy Verhofstadt, called out to the chamber that "this is the first good news of the day."

Minutes later reactions flooded Twitter. Matina Stevis, a European journalist born and raised in Greece, tweeted: "ESM cap appears problematic to me. We've seen the 'war-chest' falling short before."

The center-right European People’s Party (EPP) tweeted, "We welcome the Karlsruhe Court decision in favour of the ESM, waiting for the details."

Crucial conditions

And the devil was indeed in the detail: After the initial sighs of relief at the ruling, the complex legal caveats had to be digested. The court specified that any financial burden for Germany arising from the European Stability Mechanism (ESM) should be strictly limited to its share of the funds capital - or 190 billion euros ($244 billion). If the burden were to increase beyond that amount, it could only be done with the express approval of the German parliament, and both houses must be kept fully informed, the court said.

Guntram Wolff, deputy director of the European think-tank Bruegel, pointed out that the ruling included these two major "buts."

"The Karlsruhe judges now demand that these two objections are removed in a 'völkerrechtlich bindend' way, meaning in a way that is binding in international law," Wolff wrote in a statement shortly after the ruling. "My first reaction would be that this probably cannot be done by just agreeing in the German implementation law that the conditions are met. It may require changes in the ESM treaty or a new side treaty to the ESM. So my suspicion is that it will significantly delay the implementation of the ESM."

'About time'

It's "about time," European Commission President Barroso said of the ruling, during a debate on the future of the European Union in Strasbourg.

The French government welcomed the ruling, saying it was "excellent news."

"This decision allows us to take the next step towards stabilizing the eurozone via the possibility of ESM intervention and that is very good news as far as we are concerned," said European Affairs Minister Bernard Cazeneuve following a cabinet meeting.

The ESM board will now hold its inaugural meeting on October 8, according to Jean-Claude Juncker, head of the Eurogroup.

"I look forward to the completion of the outstanding procedures," Juncker said in reference to the new measures to protect the eurozone.

"Both treaties represent a major step forward towards closer fiscal and economic integration and stronger governance in the euro area," Juncker added.