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FOCUS, BERLINER MORGENPOST (Germany), LES ECHOS (France)

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BERLIN - The German Constitutional Court has upheld the legality of the European Stability Mechanism (ESM), which had been set up to help bail out countries in the euro zone on the verge of financial collapse.

With the decision Wednesday, a great source of anxiety was lifted for both top European politicians and many investors: had the ESM been nullified by Europe's largest economy, it could have risked throwing out the euro as we know it.

Instead, the Court decided that the entire ESM was legal, but that parliamentary control over it must be made stronger.

Paris-based business daily Les Echos explains that the German Constitutional Court, set up after World War II with an eye to avoiding the problems of the weak Weimar Republic government that preceded Hitler’s National Socialists, has extraordinary power in present-day Germany. It can legally remove the President, reject international treaties, and overrule German laws. Any citizen of Germany can ask the Court to rule on standing measures, which is exactly what 70,000 of them did, asking the Court’s opinion on the ESM.

Worry had been palpable before the decision. German Chancellor Angela Merkel said, “If the euro fails, Europe fails,” and was forced to explain her country's legal system to French President François Hollande and Chinese premier Wen Jiabao. IMF International Monetary Fund director Christine Lagarde supposedly quipped about the weight of the Constitutional Court: “If I hear that word Bundesverfassungsgericht once more, I’m leaving the room!”

The Court’s decision had an immediately favorable effect on interest rates for loans to the governments of euro-zone countries in crisis. Rates on 10-year Italian government bonds fell to 5.053 % and on Spanish bonds to 5.628 %. The euro rose back to its level of May 2012.

The Court’s decision was welcomed by most German politicians and also by the public. According to a recent poll by a German television news channel, 53 % of Germans want to save the euro even if it means continuing to provide financial help to countries in crisis.

Andreas Rees, chief economist in Germany for the Uni Credit bank, says, “This is a good day for the euro zone,” Focus reports.

But conservative CDU member Wolfgang Bosbach was more skeptical: “It’s a good sign that parliamentary rights have been strengthened. On the other hand, the liability limit of German 190 billion euros is reassuring only at first glance.” If the European Central Bank decided to buy government securities in unlimited amounts, the German share of the responsibility would also grow, he added.

Jean-Claude Juncker, Prime Minister of Luxembourg and head of the Euro Group that holds political control over the single currency, says that the ESM could now be put into effect as early as October 8th, reported the Berliner Morgenpost.

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Economy

In Uganda, Having A "Rolex" Is About Not Going Hungry

Experts fear the higher food prices resulting from the conflict in Ukraine could jeopardize the health of many Ugandans. Take a look at this ritzy-named simple dish.

Zziwa Fred, a street vendor who runs two fast-food businesses in central Uganda, rolls a freshly prepared chapati known as a Rolex.

Nakisanze Segawa

WAKISO — Godfrey Kizito takes a break from his busy shoe repair shop every day so he can enjoy his favorite snack, a vegetable and egg omelet rolled in a freshly prepared chapati known as a Rolex. But for the past few weeks, this daily ritual has given him neither the satisfaction nor the sustenance he is used to consuming. Kizito says this much-needed staple has shrunk in size.

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Most streets and markets in Uganda have at least one vendor firing up a hot plate ready to cook the Rolex, short for rolled eggs — which usually comes with tomatoes, cabbage and onion and is priced anywhere from 1,000 to 2,000 Ugandan shillings (28 to 57 cents). Street vendor Farouk Kiyaga says many of his customers share Kizito’s disappointment over the dwindling size of Uganda’s most popular street food, but Kiyaga is struggling with the rising cost of wheat and cooking oil.

Russia’s invasion of Ukraine has halted exports out of the two countries, which account for about 26% of wheat exports globally and about 80% of the world’s exports of sunflower oil, pushing prices to an all-time high, according to the Food and Agriculture Organization, a United Nations agency. Not only oil and wheat are affected. Prices of the most consumed foods worldwide, such as meat, grains and dairy products, hit their highest levels ever in March, making a nutritious meal even harder to buy for those who already struggle to feed themselves and their families. The U.N. organization warns the conflict could lead to as many as 13.1 million more people going hungry between 2022 and 2026.

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