As I predicted in the Wall Street Journal in July and discussed earlier in the week in the Asia Times, the German Constitutional Court last week deferred to the German government and approved the ESM Treaty subject to minor qualifications. Since the judgment the markets and politicians throughout the eurozone have been in jubilant mood. Even the German ambassador in London lost his guard when, in an interview with the Guardian newspaper, boasted that there was no other country in the world where ‘all but one political party’ would consistently vote to pay out ‘billions and billions’ on euro rescue packages which are ‘not very popular’, and, he should have added, would cost the German taxpayer hundreds of billions even in the unlikely event that they ‘succeed’. Germany’s europhile political establishment have not only ‘have quit reason’, they may have rejoiced too early.
As many readers already know, the German Federal Constitutional Court (FCC) handed down another important decision on Tuesday regarding national parliamentary oversight in the Eurozone crisis. The Court’s official press release is here, and the full decision is here (both in German). Der Spiegel’s English language website provides an overview of the basic elements of the Court’s ruling here, along with some excerpts from the German media commentary.
The ruling deals with the unconstitutionality of the special nine-member committee established last fall to serve as the Bundestag’s oversight mechanism for Germany’s participation in the European Financial Stability Facility (EFSF), the Eurozone’s temporary bailout fund. (The EFSF is supposed to be replaced by, or perhaps even merged into, the permanent European Stability Mechanism (ESM) later this year, depending on how things develop.) As discussed previously on this blog, the FCC last October issued a preliminary injunction against the operation of this committee pending final decision.
A ‘walk-back’ is American political jargon to describe the strategic retreat that politicians sometimes make when an initiative stirs more political controversy than expected, or when they simply say something stupid or ill-considered. Barak Obama’s recent effort to find a compromise on the exemption for religiously-affiliated employers providing contraception and other reproductive health coverage under his new health-care plan is an example of the former; Newt Gingrich’s innumerable efforts to dig the toenails out of his gums after shoving his foot in his mouth are examples of the latter (moon base anyone?).
Alas, sometimes scholars must also do some walking back from time to time—albeit never of the import, say, of the Obama example, or (hopefully) required to correct the sheer stupidity of the many Gingrich examples.
In my case, I’d like to walk back a bit from a post of November 9, 2011, entitled Greek ‘Sovereignty’ and European ‘Democracy’, whose imprecision on a key point has been troubling me for a while. The vote of the Greek parliament on Sunday night on the most recent round of austerity measures (under Eurozone, and particularly German, pressure), combined with rioting in the streets of Athens, have shown that the time is right to make plain some of my reservations about that earlier post.
On 7 September 2011 the FCC handed down its most recent decision on the relation between EU and national constitutional law. The ‘euro aid’ judgment concerned three constitutional complaints which are directed against German and European legal instruments and other measures in connection with the aid to Greece and with the euro rescue package. The complainants had invoked their right to elect the Bundestag, which is protected by Article 38 GG, to challenge a loss of substance of their power to rule, as it is organised in a constitutional state, by a far-reaching, or even comprehensive, transfer of duties and authorities of the Bundestag. They argued that Article 38.1 GG protected competences of the present or of a future Bundestag from being undermined, which would make the realisation of the citizens’ political will legally or practically impossible. The complainants submitted that the financial commitment involved in the Euro Stabilisation Mechanism Act represented a threat of the act of voting being devalued in such a way if authorisations to give guarantees are granted in order to implement obligations which the Federal Republic of Germany will incur under international agreements concluded in order to maintain the liquidity of currency union member states.
The FCC rejected the complaints as unfounded and held that the Monetary Union Financial Stabilisation Act (Währungsunion-Finanzstabilisierungsgesetz), which grants the authorisation to provide aid to Greece, and the Act Concerning the Euro Stabilisation Mechanism Act (Euro-Stabilisierungsmechanismus-Gesetz), did not violate the right to elect the Bundestag under Article 38.1 of the not unduly impair the budgetary autonomy of future Parliaments nor in unconstitutional manner the government’s control over the budgetary decisions.
Dr. Gunnar Beck outlines the history of the German Constitutional Court’s complicated relationship with the EU in a series of posts. Part 1 is below.
In its Lisbon Judgment of 30 June 2009 the FCC broadly affirmed its position as set out in the earlier Maastricht judgement. However, whereas in the Maastricht and Solange judgments on the formal constraints on the transfer of powers to the EU, in the Lisbon judgment it asserted its own jurisdiction of the final resort’ to review future EU treaty changes and transfers of powers to the EU on two distinct grounds: (i) ultra vires review, and (ii) identity review. Ultra vires review refers to position as characterised in the Maastricht decision: the transfer of powers to the EU and the latter’s exercise of its powers must be properly approved by the Bundestag (the German Parliament), respect fundamental rights, and be sufficiently legally certain. Identity review goes further. The institutions of the EU including the Court of Justice must respect the national identity of the Member States, the ‘non-transferable identity of (their) constitution(s)’ and the principles enshrined therein, and a minimum core of sovereignty vested in national political institutions.
The primacy of national constitutional law will remain in place for as long as the EU remains founded and is developed further on the basis of treaties and treaty amendments by sovereign states as the signatory members. It would and could change only if Member States abandoned their national constitutions and adopted a common European Constitution in their place. The FCC does not, however, state how such a supra-national constitutional revolution could or should be brought about.
On the day that Parliament’s sovereigntist Eurosceptics have got together to hold a debate on Britain’s future in Europe and contemplate the UK leaving the EU. Dr. Gunnar Beck outlines the history of the German Constitutional Court’s complicated relationship with the EU in a series of posts.
In his post entitled ‘The People’s Court’ (a presumably unconscious allusion to the Volksgerichthof under Roland Freisler) Dr. Oliver Gerstenberg provides an admirably clear overview of the recent ‘Greek bailout’ judgment of the German Federal Constitutional Court (the “FCC”). Dr. Gerstenberg expresses apprehension at the growing self-assertion and alleged populism of the FCC. I beg to differ. To call the kernel of German identity ‘its openness to Europe’ confuses a debatable ought with a simple is. It is also unclear why the FCC should not be the appropriate forum for considering the course of EU integration if the political establishment has over fifty years coherently favoured views either not shared or only reluctantly acquiesced in by the German electorate. Dr Gerstenberg is not concerned with political debate – the German political system has never allowed for genuine debate of anything to do with EU integration. Unfortunately however – and here I agree with Dr. Gerstenberg – the FCC is indeed not the appropriate forum for articulating political debate about EU integration. The reasons for this are historical and institutional. The FCC has been self-assertive for four decades, but merely in theory. In practice it submits to the political establishment, at least in matters involving the EU.
The judgments of the FCC together with the extra-judicial writings of some of its judges, provide what is perhaps the most comprehensive analysis of the issues of primacy, legal pluralism and the problem of Kompetenz-Kompetenz in the relationship between national and EC law. The FCC developed its analysis in a series of seminal judgments which go back to the 1970s.
In the Solange I case, the FCC ruled in 1974 that, in the hypothetical case of a conflict between Community law and the guarantee of fundamental rights under the German Constitution, German constitutional rights prevailed over any conflicting norm of EC law. The FCC thus impliedly rejected the position of the doctrine of the primacy of Community law, which had first been laid down by the ECJ in the 1964 decision Costa v ENEL and then extended by it in 1970 in the Internationale Handelsgesellschaft case to cover even the fundamental constitutional norms of the Member States. However, on the facts of the case the FCC held that the rules of Community law in issue did not represent a violation of the fundamental rights under the German Constitution