Euro bailout fund backed by German court

Germany's top court has rejected calls to block the permanent eurozone rescue fund - the European Stability Mechanism (ESM) - and the European fiscal treaty.

But the Constitutional Court imposed conditions including a cap on Germany's contribution, which it said could only be overruled by the German parliament.

Some 37,000 people had signed a petition to the court asking it to block the ESM, and make it subject to a referendum.

Gavin Hewitt reports.