The People’s Court

Dr Oliver Gerstenberg

The German Constitutional Court (Bundesverfassungsgericht) in a 7:1 decision on September 7, upheld Germany’s participation in the bailout of Greece. But the Court simultaneously required a strengthening of the role of the parliament by requiring the prior approval of the Bundestag to any larger scale aid measure “taken in a spirit of solidarity.” Overall, the Court’s ruling  expressed a longstanding undertone of Euroscepticism, which increasingly falls in tune with changing public opinion in Germany.

Art. 38(1) of the German Basic Law stipulates that “Members of the German Bundestag shall be elected in general, direct, free, equal, and secret elections. […].” Read in conjunction with Art 20 (1), which enshrines the democratic principle, and with Art 20 (2), “[a]ll state authority is derived from the people” and with the eternity clause of Art. 79(3), Art 38(1) guarantees the sovereignty of the people and, concomitantly, the right of citizens to participate in politics through their vote, as a “quasi-constitutional” [grundrechtsgleiches] individual right, rooted in human dignity. Was the “act of voting” devalued by recent German aid measures for Greece and the Euro rescue package? The complainants, a group of four prominent professors and Peter Gauweiles, argued that it was. In particular, they argued that the rescue measures amounted to a wholesale transfer of an essential and inalienable competence of modern German democratic statehood, the autonomy and democratic control over the national budget, away from German Bundestag  where that control naturally belonged as the locus of democratic legitimacy and accountability, to an abstract “system of intergovernmental governance.”

The professors’ complaint closely dovetailed with longstanding concerns about Germany and the EU expressed by the Bundesverfassungsgericht on many previous occasions. But the Court refused to accept the invitation to invalidate the rescue package as unconstitutional, while at the same time signaling sympathy for the sceptics’ cause itself. Of course, the consequences of a decision annulling the act would have been dramatic: an outright “no” to the bailout would have meant the end of it, by way of a simple German judicial fiat: no German participation; credits already granted would have had to be paid back; the EFST would have lost its AAA rating; the Euro might well have been pushed over the brink. The Court’s response resembles an uncomfortable “yes, but …”

An important first strand in the Court’s reasoning was pragmatic. The Court recognised that the German legislature, being capable of drawing on a wide array of expertise and input, must for that very reason be accorded an extremely wide margin of appreciation in matters of economic and financial policy. The Court refused to put itself into the place of the legislature with an expertise of its own. Hence, only “evident transgressions of outer-most boundaries” [evidente Überschreitung von äuβersten Grenzen] of the principle of budgetary autonomy could ever be justiciable (par. 131), as the Court acknowledged. But, again, when it comes to determining those boundaries, there is no financial ceiling which could conceivably be inferred from the democratic principle in advance and in the abstract. So, the judicially approved margin of appreciation covers, for example, the legislature’s unflinching assessment that the authorisations to give guarantees to the amount of a total of approximately € 170 billion were within the capacity of the federal budget. The margin of appreciation also extends to assessments concerning the future sustainability of the federal budget.

The only hard and fast rule, which the Court aimed at establishing by invoking the idea of a “sufficiently definite” nature of constitutional authorisation to confer powers on to Europe, is that the German government cannot commit Germany to indeterminate and unlimited financial liabilities, which may increase or vary without any continuing control and supervision of the Bundestag: the German government has no power to sign a blank cheque to support the Euro-zone. But according to the Court neither of the two impugned acts led to such a situation, because they met three conditions: the authorisation to give guarantees was clearly defined; the giving of guarantees was contingent on agreeing with the Member State affected – Greece – on economic and financial policy programmes; and a “determining influence” [bestimmender Einfluβ, par 140] of the German Government was secured by the requirement of mutual agreement of all the Euro-zone states.

A second important strand of the Court’s ruling lies in the Court’s endeavor to safeguard and reinforce the role of the national democratic process, meaning the Bundestag. “Every larger scale aid measure of the Federation taken in a spirit of solidarity and involving public expenditure at the international or European Union level must be specifically [im Einzelnen] approved by the Bundestag,” the Court insisted (Leitsatz 3b). So, any future aid package must have the Bundestag’s consent and meet the three conditions outlined above. In practice, this means that it is not sufficient for the government to “strive to reach an agreement” [zu bemühen, Einvernehmen … herzustellen] with the Bundestag’s Budget Committee: the government is obliged to obtain prior approval by the Budget Committee before giving guarantees. Anything less would be unconstitutional. But in a potentially explosive obiter dictum the Court deduced, without quite being asked, that in its view the European Treaties (which only the European Court of Justice may interpret) not only recognized but even actually required the existence of national budget autonomy as an essential, inalienable competence.

So, the Bundesverfassungsgericht has cast itself in the role of a supreme guardian of democracy – as the people’s court. The Court’s ruling has been met with widespread approval in Germany and with relief abroad. The Court has taken it upon itself to enhance the role of the Bundestag and to exhort it to take action even where the Bundestag itself has not expressed concerns and remained silent or inactive. The court-centric nature of German democracy will appear paradoxical to those who believe in the parliament and believe that the parliament ought to (and indeed can) know best, and is sovereign and competent in what it does because of its inclusive and discursive character. Yet there is another closely related, potentially more serious, problem to the Court’s approach. What the Court invariably means by “democracy” is democracy at home, at the national level. The Court’s outlook has been, and continues to be, fundamentally dualistic by relentlessly pitting the EU against German statehood; the Court consistently portrays the EU as a “system of intergovernmental governance” and sharply contrasts the allegedly intergovernmental character of the EU to the Identitätskern—the core identity—of the German constitution, which has to be defended against heteronomous determination (Fremdbestimmung) through the EU. But wherein lies the core of that identity if not in Germany’s openness to Europe?

The Court’s vocabulary reverberates with a shifting, increasingly self-protective and self-assertive, public opinion in Germany and illustrates the increasing political resistance that exists in Germany against further steps towards European integration. “Why”- many Germans nonchalantly ask – “should we, the paragons of probity, fiscal and otherwise, be liable for other countries’ misfortune or even irresponsibility?” Yet such steps towards more political integration, controversial though they may appear in some quarters, may well prove necessary in order both to regain the capacity to tame global financial markets and to extend democratic and constitutional principles beyond the state to the EU itself. Germany itself has been the main beneficiary of the EU politically and of the Euro economically. The sense of unease raised by the decision is that constitutional courts may be the wrong forum for a necessary political debate about whether Europe should be allowed to unravel or creatively developed in ways both democratic and subsidiarity-friendly.

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