A German economist plans to launch a Constitutional Court challenge to the 30 billion euro aid package for Greece agreed by euro zone finance ministers, a German newspaper reported on Wednesday.
The prospect of a challenge - the court said it has yet to receive such a request - highlights the problems Chancellor Angela Merkel faces in convincing a skeptical public that it is right to offer support for Greece, for the sake of the euro.
The timing is particularly sensitive for Merkel, who faces a state election next month that could see her coalition lose its majority in the Bundesrat upper house of parliament. Any legal bid could take months, and adds to uncertainty about details of the euro zone package. A further complication is that the German parliament would have to approve any aid for Greece, according to a finance ministry spokesman.
Joachim Starbatty, professor at Tuebingen University and a euro skeptic allied to a previous legal challenge to the introduction of the single currency, was quoted by the Rheinische Post paper as saying the aid package breached the EU's Maastricht Treaty.
We will file a suit at the Constitutional Court against the credit from euro states, Starbatty told the paper which said several other academics and constitutional lawyer Wilhelm Hankel were working together on the case.
A court spokeswoman said no petition had yet been filed and declined to speculate on how the court might respond to one. Starbatty was not immediately available for comment.
The Rheinische Post said Starbatty viewed the aid package as a subsidy which was forbidden as the interest rate offered was under the market rate for Greek bonds.
Some experts said the court may even put Greek aid on ice.
This was expected and the court will have to make, as a first step, a decision on whether it needs to react immediately or not, wrote a Goldman Sachs economist in a research note.
The court might have to consider suspending the aid to assess whether it was legal or face the risk of later deciding it breached the constitution, said the bank.
However, some legal experts said the court would not put the package on hold and that any case would face major hurdles.
The constitutional complaint -- and we assume without knowing for sure that this is what the professor is up to -- is not successful in the vast majority of cases, said Martin Trybus, Director of Birmingham University's Institute of European Law, adding that did not mean they never succeeded.
Hankel failed in a bid to prevent the introduction of the euro in 1998 at the Constitutional Court.
Keenly aware of public hostility to a Greece bailout and determined to try to impose tougher fiscal discipline on euro zone states, Merkel had been reluctant to agree on aid before a May 9 vote in the state of North Rhine-Westphalia.
But Germany caved at the weekend in and accepted Greece would not be forced to pay going market rates to secure loans.
If Merkel's coalition cedes power in the state, it would also lose its majority in the Bundesrat upper house of parliament which would have to approve laws such as planned tax cuts and a major health reform.
A Forsa poll for Stern weekly showed Merkel's conservatives and her Free Democrat (FDP) coalition partners short of majority, on 45 percent. Merkel's Christian Democrats (CDU) were on 39 percent, down 5 points from the last vote in 2005.
Some conservative politicians and newspapers have criticized the deal. Conservative deputy floor leader Michael Fuchs said he thought the EU was making life too easy for Greece and other states would see less need for budget consolidation.
Handelsblatt attacked politicians for hypocrisy in failing to describe the deal as a bailout.
The founders of the European currency excluded the possibility that the euro zone members would take on each others debt. Bailouts are banned. But that isn't stopping the euro zone. They are simply avoiding the term. The deception of the public continues, the paper said in an editorial.
(Additional reporting by Dave Graham)
(Writing by Madeline Chambers, editing by Janet McBride)