Germany's parliament will vote in mid-March on a motion opposing most of potential solutions to Europe's debt crisis, possibly tying Chancellor Angela Merkel's hands ahead of a summit aimed at agreeing a deal.

A keenly-awaited decision by Germany's highest court on the efforts to stem the crisis, however, will probably not be made before the second half of the year, legal experts and members of parliament said.

The parliamentary motion, put forward by ruling coalition deputies this week, seeks to rule out bond buybacks by the euro zone's permanent rescue fund after 2013 and takes a hardline stance that could make it harder for Merkel to compromise with her euro zone partners in next month's talks.

Reflecting the depth of opposition in Germany to any deal that makes it stump up for the fiscal policy failings of Greece, Portugal and others, a group of 189 German economists published an appeal to Merkel not to agree to bond-buying by the current temporary bailout fund (EFSF) or the European Central Bank.

That would endanger the reputation and the independence of the ECB, the economists wrote in a joint statement, excerpts of which were published in the Handelsblatt newspaper and Frankfurter Allgemeine Zeitung daily.

The assumption that either the EFSF or the ECB would be tasked with stepping in to buy sovereign bonds is seen as central to any solution to the crisis and was the key to a fragile recovery for Spanish and Portuguese debt last month.

But concerns that domestic politics may make it impossible for Merkel to commit to a package that would end the crisis has prodded premiums respectively around 40 and 80 basis points higher so far in February.

The lower house of parliament said it will vote on the motion on March 17, after a euro zone summit to thrash out a deal on further steps in the crisis but before a full EU meeting on March 24/25 that would approve the deal.

BETWEEN SUMMITS

The court verdict on efforts to block the rescue package for Greece and the European Financial Stability Facility (EFSF) may also have an impact on the planned permanent bailout fund. A ruling was originally expected in spring 2011.

I expect a decision in the second half of the year,

Michael Stuebgen, European policy spokesman in parliament for Chancellor Angela Merkel's Christian Democrats, told Reuters.

Karl Albrecht Schachtschneider, an attorney who is a leading eurosceptic in Germany and plaintiff in the case, said the decision could even be delayed further.

It is quite well possible that a hearing will only take place at the end of the year, he told Reuters. A ruling might then be delayed until the beginning of next year.

The constitutional court could also decide to defer the case to the European Court of Justice in Luxembourg to assess whether the mechanisms constitute a breach of the European No Bailout clause in the European Treaty.

Observers say this unprecedented step was quite possible in this particular case but it was impossible to estimate how likely that scenario is.

The case would then go back to the German court for a final decision. In that case, a ruling would be delayed for another three years, Schachtschneider said.

LONG AFTER

Stuebgen, a member of parliament in Merkel's CDU, welcomed the fact a court decision is now likely to come well after any adoption of the ESM by euro zone leaders in March, replacing the EFSF mechanism in 2013.

This would make sense, because the court could then evaluate the various aid mechanisms and their national implementation in one package, Stuebgen said.

He said the court's pending ruling was an important motivation behind the decision of German ruling coalition MPs to press Merkel to rule out purchases of debt by the ESM.

The court is taking the complaint very seriously, he added.

Schachtschneider and his group of Eurosceptics have already announced they will also try and block the ESM at the top court as soon as it is passed by the two chambers of German parliament.

(Editing by Patrick Graham)

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