12 Sep 2012

European shares hit new high on German court ruling

9:06 pm on 12 September 2012

European shares climbed to their highest in nearly 14 months on Wednesday after Germany's Constitutional Court rejected complaints against the euro zone's new bailout fund and allowed its ratification under certain conditions.

The court said Germany could ratify the European Stability Mechanism and budget pact - as long as it could guarantee there would be no increase in German financial exposure to the bailout fund without parliament's approval.

Approval of the ESM is a vital part of a European Central Bank plan to defuse the euro zone debt crisis by buying struggling peripheral countries' bonds in the secondary market, Reuters reports.

The FTSEurofirst 300 index of top European shares was up 0.5% after rising as far as 1,114.33 points at one stage - its highest since July 2011.