UPDATE 1-German academics challenge Greece aid in top court

* Academics argue aid bill has inflationary impact

* Experts sceptical about suit’s chance of success

* Complaint may help Germany push for tougher budget rules

(Adds statement, background)

By Diana Niedernhoefer

KARLSRUHE, Germany, May 7 (BestGrowthStock) – A group of German
academics have filed a challenge to Germany’s aid package for
Greece at the country’s highest court and asked that no German
loans should flow to the debt-stricken country before a ruling.

As expected, the five academics, including eurosceptic
economist Joachim Starbatty, filed their complaint with the
Federal Constitutional Court in Karlsruhe. It is unclear how
long the court will take to decide on the complaint.

Four of the academics had previously lost a challenge to the
introduction of the single currency in Europe, and legal experts
were doubtful about the latest suit’s chances of success. One
former judge from the court has said he did not think the Greek
aid would be delayed by it.

“The financial aid is not provided for in the EU treaties,
and gives rise to inflationary policy,” the five said in a
statement to the media.

“The ban on member states assuming responsibility for the
liabilities of other member states is clear.”

Earlier on Friday, Germany’s upper and lower houses of
parliament approved a law to free up Germany’s contribution to a
multi-billion euro rescue package for Greece, despite widespread
public opposition to the measure.

The bill means Germany could contribute up to 22.4 billion
euros to a 110 billion euro, 3-year rescue plan agreed by the
International Monetary Fund (IMF) and euro zone members.

German President Horst Koehler, a former IMF managing
director, must now sign the bill into law.

Martin Ibler, an expert on constitutional law from the
University of Konstanz, said he did not believe the academics’
complaint, nor their attempt to seek a court injunction to
prevent Koehler signing off the aid bill law, would succeed.

However, the constitutional court could set out arguments in
a justification for its ruling that would “state more precisely
and limit the scope” of the government and parliament’s ability
to act on future cases like Greece, he added.

This could help Chancellor Angela Merkel press home her
stated intention of toughening European Union rules on breaches
of budgetary discipline by member states.

“If the chancellor has the support of the constitutional
court, then other member states would have to pay more attention
to what Germany is saying,” said Ibler.

One former judge of the court, who declined to be named,
told Reuters this week he was sceptical the bid would succeed
and that he did not expect the Greek loans to be held up by it.

Investment Research
(Additional reporting by Dave Graham; editing by Philippa

UPDATE 1-German academics challenge Greece aid in top court