German Chancellor Angela Merkel's court victory on policy for saving the euro was hailed by southern Europe as well as her northern allies as German bailout critics failed to stop the joint currency's permanent rescue fund.

With an extension of Greece's bailout still undecided and Spain holding out on seeking a sovereign rescue, today's German constitutional court verdict avoids worsening the debt crisis as it approaches its third anniversary. It also hands Merkel ammunition against domestic opponents who see German taxpayers' money at risk in the name of a united Europe.

Italian Prime Minister Mario Monti, who has introduced budget austerity measures to keep the crisis from engulfing the euro area's third-largest economy, said the court decision is "excellent news." Spanish Deputy Economy Minister Fernando Jimenez Latorre called it "very positive."