Germany’s Federal
Constitutional Court (or the Bundesverfassungsgericht, if you are
so inclined)
will not rule on the constitutionality of the European
Stability Mechanism and the fiscal pact until September. The
announcement caused
European stocks to fall and has increased the level of
uncertainty in Europe among some European politicians. Valentin
Marinov, Director of FX Strategy at CitiFX said: 

This adds to the uncertainty about the ability of the euro zone
officials to respond adequately to any potential further
deterioration of the debt crisis.

While the court is likely to rule in favor of the
constitutionality of the bailout mechanism and closer fiscal union,
the eight-week delay may be too long to wait before the eurzone
deteriorates further. Paul Krugman
was saying that it was hard to see how Greece could remain part
of the eurozone back in June. Michael Saunders, chief economist
from Citigroup,
warned that Greece only had seven months left in the euro back
in March, which is close to when the Federal Constitutional Court
is scheduled to make its ruling. 

A ruling in favor of the measures will almost certainly come
with attachments. The most likely of these will be an increase in
the amount of influence Germany will have on the bailout
conditions. In Germany patience with Greece and Spain is wearing
thin and German politicians will be under pressure to make the
future bailouts conditional on further austerity measures that
would be very unpopular. In fact, it was members of German
Chancellor Angela Merkel’s own party who were among those who made
complaints to the Federal Constitutional Court against the
measures. It will be difficult for most Mediterranean countries to
comply with the bailout conditions that Merkel will almost
certainly have to implement due to pressure from her own party and
an upcoming reelection campaign to worry about.