Italy's Prime Minister Mario Monti on Wednesday spoke highly of the verdict of the German Federal Constitutional Court to back the European Stability Mechanism (ESM).

"The news of the verdict is a very good piece of news, because it removes the last hurdle for the implementing of the ESM and fiscal compact," Monti said, commenting on the decision.

Speaking of the court's conditional yes that limits bailouts to 190 billion euros (245 billion U.S. dollars,) Monti said "this limitation which is being included will not hamper the stability mechanism."

"Actually, the verdict of the court talks about the overall commitment that Germany can take and says that this has to be discussed by the parliament," he added.

Monti said questions raised about the European Central Bank possibly overstepping its mark "should be handled by the European Union, not the German courts."

Earlier Wednesday, Germany's top court cleared the way for the country to ratify the long-awaited 500-billion-euro (644-billion-U.S. dollar) permanent bailout fund.

The court ruled that the fiscal pact, a treaty aimed at strengthening budget discipline in Europe but opposed by plaintiffs in Germany, "does not grant the bodies of European Union powers which affect the overall budgetary responsibility of the German Bundestag."

Italy's one-year borrowing yields dropped to their lowest since March on Wednesday after the German verdict. Rome sold 9 billion euros (11 billion U.S. dollars) of one-year bills and 3 billion euros (3.8 billion U.S. dollars) of three-month bills at the auction.