For Merkel and European capitals, a sigh of relief

It is these two letters - U and N - that make the whole difference. The legal challenges against the euro bailout fund were "predominantly founded," said Andreas Vosskuhle, chief justice of the German Federal Constitutional Court, on Wednesday. Then, within a second, he corrected himself:

The challenges were "predominantly unfounded."

With that, Germany became the last country to ratify the contract creating the European Stability Mechanism.

The court's decision provoked huge relief for German Chancellor Angela Merkel, other European countries, and, to a degree Wednesday, the financial markets. The ESM is designed to provide money to cash-strapped euro states. In exchange, the nations must commit themselves to rigorous austerity measures.

Major turbulence in the financial markets was likely if the court would have ruled it was unconstitutional for Germany to participate. After all, government officials had pointed out several times there was no Plan B.

Without Germany, the ESM would have been pointless. Being the strongest economy in the eurozone, the country is giving more than a quarter of the money for the $900 billion bailout fund. Whether she likes it or not, Merkel is supposed to be the key player in resolving the euro crisis, since the British are not part of the common currency and the French face spending problems of their own.

The complaint in Germany against the ESM fire wall was filed by the opposition Left Party and by a nonprofit organization that calls itself More Democracy. Some fiscally conservative economists and a member of parliament, Peter Gauweiler, were among the petitioners. And Gauweiler is a part of the same political faction as Merkel.

More Democracy argued that such a big and permanent commitment requires asking the consent of the German people in a referendum. Yet the judges obviously understood that a government has to be able to make decisions in a crisis.

Germany's Federal Constitutional Court is famous for its "Yes, but" rulings, as far as European issues are concerned. In fact, it has never ruled that the European integration is against the German constitution. Still, it often adds conditions to such rulings. There is a "but" this time - a manageable one. Vosskuhle said Germany must get legal guarantees that its financial liability to the ESM could not grow further without the approval of the German parliament.

The fact that 37,000 Germans had joined the complaint, making it the largest case in the history of the court, proves that Merkel is not doing a superb job in explaining to the citizens of her country what she is doing in the euro crisis - and why. Political observers often say Merkel has never delivered a speech on the crisis that was considered vital. She fears it will hurt her chances to get reelected if she appears to be too eager to give German taxpayers' money to other European countries unable to keep to their budgets.

However, some urge Germany to provide more money to prevent a depression in Europe. Billionaire financier George Soros called for Germany to accept its role as de facto leader of the eurozone. Soros believes austerity alone will not solve the crisis.

Many economists contend that countries such as Greece need substantial financial aid to reboot their struggling economies. Merkel, however, seems not at all eager to do for Greece and others what was done for Germany after World War II - a U.S.-delivered Marshall Plan.