Austria hails euro court ruling as 'important step'

(VIENNA) - Austria welcomed on Wednesday the German constitutional court's decision to allow the ratification of a new eurozone firewall, hailing it as a "an important step" and a "milestone."

The court's ruling was "an important step for the euro's stability and is crucial for Europe's future," Chancellor Werner Faymann said in a statement.

In a landmark ruling watched around the world, Germany's top court ruled that President Joachim Gauck could sign the European Stability Mechanism (ESM) and fiscal pact -- two crucial crisis-fighting tools -- into law, overturning a raft of legal challenges that sought to prevent him from doing so.

"The ESM is one of the most important instruments that the eurozone states have to ensure stability," Faymann said following the decision.

"The ESM is an investment in the future and it should ensure, together with the European Central Bank's recently agreed monetary policy measures, that confidence in government bonds rises again."

The ECB unveiled last week a new programme under which it could buy unlimited volumes of the bonds of struggling eurozone countries in a bid to drive down their borrowing costs.

Austria's parliament already approved the ESM and the eurozone fiscal pact in July.

However, the 500-billion-euro ($650-billion) mechanism, designed to come to the aid of debt-stricken countries such as Spain and Italy, was held up pending the German constitutional court ruling.

"I am relieved that such a clear ruling was made," Austrian Finance Minister Maria Fekter said Wednesday, describing the ESM and the ECB's unlimited bond-buying as "a milestone with regards to a stable crisis infrastructure."

These measures demonstrated the eurozone members' "overwhelming desire" to stick together and tackle the crisis with a united front, she said.

Vice-chancellor Michael Spindelegger meanwhile hailed the German ruling as a "good and important decision," which sent "a final starting signal for the euro bailout fund."