Greek ‘Sovereignty’ and European ‘Democracy’—a bit of a walk-back, due to some ‘colossal’ concerns

Prof. Peter Lindseth

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.

I stand by much of the post’s claims regarding the evolving nature of sovereignty and democracy in the face of functional and political demands, not least flowing from past choices.  But there was an element of my discussion that has always caused me a bit of concern.  Here are the key passages:

Certainly the Greeks are paying a severe price for their past profligacy, as well as for their failure to live up to legal commitments as members of the Eurozone.  And perhaps the Greeks did not fully understand, or did not want to understand (out of a prestige imperative), what these commitments entailed when they first undertook them nearly a decade ago. . . .

( . . . )

Whether the delegation of power is to an institution operating inside or outside the nation-state, the key moment of democratic and sovereign decision necessarily comes at the moment of delegation itself, subject to forms of ongoing national participation in subsequent decision making pursuant to that delegation.

It is in this sense that the situation of Greece today is better understood, not as the negation of its sovereignty or democracy, but rather as the (very) painful realization of these concepts in their modern guise.  Greece is now paying the price for its prior commitments.  And if the Greek people did not understand that price initially, they certainly understand it now.

There is much that remains true in these statements.  But the problem is not merely that they are insensitive to the plight of the Greek people.  Rather, they are also not entirely accurate as to what the law is, or should be, with regard to democracy, delegation, and the enforcement of prior commitments, whether supranational or otherwise.

Ironically, I am led to this view by statements of Udo Di Fabio, until very recently a judge on the German Federal Constitutional Court, in his December Der Spiegel interview that was the subject of a post here last month.  When Di Fabio got to the question of supranational policing of national commitments in the integration process, he was (surprisingly for his interviewers at least) somewhat flexible.  But he noted this ‘sticking point’: ‘If financial guarantees were to become colossal or Germany were to be made liable against its will, then the judges would perhaps say: This can no longer conceivably be regarded as covered by the principle of democracy’.  Note that the test articulated by Di Fabio is two-fold: not merely ‘liable against its will’ (the standard delegation concern) but also ‘colossal’ liability (even if entered into knowingly).

It is the second, ‘colossal’ test that my last post failed to explore more fully. My thoughts on this point are still inchoate, and I certainly invite readers’ comments to help me clarify.  My sense here, based on conversations with a few German colleagues, is that Di Fabio was driving at a subtle distinction in German constitutional law between, on the one hand, the so-called Parlamentsvorbehalt (or the scope of normative power that, in any instance of potential delegation, must be reserved to the national parliament), and, on the other, the Wesentlichkeitstheorie (the ‘theory of essentialness’, or the notion that ‘essential’ questions cannot be delegated outside the parliamentary realm at all).  Obviously, the two concepts are related, with the Parlamentsvorbehalt (or Vorbehalt des Gesetzes, as it is sometimes called) perhaps being merely the operationalization of the theory of essentialness.  But arguably the theory of essentialness is more demanding, in that it implies that there are some matters that are not merely NOT subject to delegation, but also NOT subject to legislation, consistent with maintaining the democratic character of the state.  Even if the German Bundestag wanted to do so, it could not undertake such ‘colossal’ financial commitments to the EMU that would undermine the democratic capacities of future parliaments.  (German readers, please correct me if I’m wrong on this.)

Let’s assume that the German jurisprudence in fact expresses more general principles as to the relationship between democracy and delegation.  Might we then say that Greece, in its ill-considered accession to the currency union, with all the attendant downside risks that that choice entailed, made such a ‘colossal’ commitment?  Might we then say that, on this basis, the original legislative decision was itself unconstitutional?  If the answer to this question is ‘yes’, then obviously I need seriously to reconsider (or at least to qualify) my earlier statement that ‘the situation of Greece today is better understood, not as the negation of its sovereignty or democracy, but rather as the (very) painful realization of these concepts in their modern guise’.

I am led down this path of reflection after reading a passage from an opinion piece by the always-excellent Ambrose Evans-Pritchard.  An extended quotation is worthwhile:

Premier Lucas Papademos [of Greece] pleaded for national unity . . . . “We are just a breath away from ground zero. A disorderly default would set the country on a disastrous adventure. Living standards would collapse and it would lead sooner or later to an exit from the euro.”

Well, perhaps, but remaining in EMU is also a disastrous adventure, and living standards will certainly collapse, which is why it ultimately makes no difference whether or not the Greek parliament backs the latest accord (I write before knowing the outcome of Sunday’s vote).

The policy cannot command democratic consent over time. The once dominant Pasok party has collapsed to 8pc in the polls. Support is splintering to the far Left and far Right, just like Weimar Germany under the Bruning deflation.

(. . . )

If you think, as I do, that Greece did indeed commit a host of sins but is also the first of several victims of a mad ideological experiment that shackled together economies with different growth rates, wage bargaining systems, productivity patterns, sensitivity to interest rates, and inflation proclivities – without fiscal transfers or sufficient labour mobility to cushion the effects – and that this disaster was compounded by Germany’s (beggar-thy-EMU-neighbour?) wage squeeze, and compounded yet further by sharp monetary and fiscal contraction at the wrong moment in the states most at risk, then you will expect the crisis to grind on whatever happens in Greece.

This last paragraph is critical, because it summarizes so succinctly the problems with the EMU, not just in implementation but also in actual design.  Although national high courts are loathe to involve themselves in the ‘expediency’ of a particularly policy choice (l’opportunité as the French put it), the ‘colossal’ test suggests that, at the outer margins at least, where the policy choice is so thoroughly risky (or when those risks are sadly realized, as in the ‘mad ideological experiment’ that is the EMU), then judicial intervention may be appropriate.

And I am not just talking about Greece here (I frankly don’t know the jurisdiction of its high courts).  Rather, as Andreas Voßkuhle, the President of the German Federal Constitutional Court, was quoted as saying in a speech last week, ‘It would be tragic and fatal if we were to lose democracy on the road to saving the euro and to more integration’.  Indeed, Voßkuhle is apparently much more concerned than Di Fabio about the democratic implications of delegating supranational authority to enforce national commitments to fiscal discipline.  But beyond that question, there is the problem of Germany’s ‘colossal’ exposures in the event of a Eurozone break-up (a topic that takes us into the risks associated with the so-called TARGET2 payment system, which will have to await another post).  As Evans-Pritchard concluded:

The EMU end-game is harrowing for Greece, but it is also ghastly for Germany. Berlin has accumulated ruinous liabilities without yet solving anything, and is fast squandering sixty years of diligent statecraft.

By demanding a budget viceroy for Greece, and now an escrow account to seize Greek revenues at source, the Merkel-Schäuble government has crossed a diplomatic line and brutalised EU politics. “Memorandum Macht Frei”, as one Greek newspaper splashed.

Would Konrad Adenauer ever have made such a blunder?

I’ll leave it at that for now.  There is still a great deal I need to think about.  But the question that is pressing on me is this:  Is Germany’s blunder not merely political or economic, but also constitutional?  If that is the case for Germany, it is certainly the case for Greece.  And the costs of unwinding that disaster, not just for the Eurozone but the world, may truly be ‘colossal’.

5 thoughts on “Greek ‘Sovereignty’ and European ‘Democracy’—a bit of a walk-back, due to some ‘colossal’ concerns

  1. Let’s assume that the German jurisprudence in fact expresses more general principles as to the relationship between democracy and delegation. Might we then say that Greece, in its ill-considered accession to the currency union, with all the attendant downside risks that that choice entailed, made such a ‘colossal’ commitment? Might we then say that, on this basis, the original legislative decision was itself unconstitutional?

    Well, there’s the first problem: when are we supposed to judge this “colossalness”? Ex tunc or ex nunc? At the time, all Eurozone states made the same commitment. But now, one might feel the picture looks differently.

    In any event, you’re overlooking the fact that the Greeks have a different constitution than Germany does. To the extent that Di Fabio makes a legal argument – as opposed to simply a moral or philosophical one – his argument is rooted in art. 79(3) GG, the eternity clause. Without it, the argument does not survive. As the then-justice minister Piet Hein Donner explained a few years ago, if the Dutch people want Sharia law in a sufficiently large majority, they can have it. I assume the same goes for Greece.

    If, on the other hand, you want to take it as a moral or (political) philosophical argument, then the question becomes whether countries ought to have eternity clauses, whether they can democratically abolish democracy, whether the current arrangement constitutes a reduction in democracy, etc. In other words, familiar territory.

  2. Martin, all points well taken. Yes, familiar territory, but crucially important territory as well.

    Let’s first consider the timing issue. Undoubtedly judicial deference at the outset was the only plausible approach, particularly given the broad consensus in favor of (or broad inattention to the risks of) the common currency. But at what point does abandoning such deference become necessary if the damage to domestic democracy becomes evident? Is deference always the correct approach? Voßkuhle’s most recent comments suggest some growing judicial impatience and willingness to forego the usual deference, at least in Germany. Might the same principle apply in Greece?

    As to the differences between the German and Greek constitutional texts, no doubt you’re probably right (although, as the post pointed out, I’m no expert). Few if any other countries have either an eternity clause or the constitutional commitment to ‘militant democracy’ that that the Federal Republic adopted after the catastrophe of 1933-1945. That said, do ‘sufficiently large’ majorities in any more run-of-the-mill democracy (say, the Netherlands) actually have the leeway you suggest, at least without overtly voting to replace their old constitution? Certainly human rights operates as a constraint. But what about the democratic commitments of the collectivity as a whole? Even if not enshrined in an eternity clause, I have a hard time believing any court possessing a constitutional jurisdiction would allow the negation of ‘democracy’ simply on the basis of an implicit policy choice in favor of, say, a common currency. My sense is that any polity self-conscious of itself as self-governing would need to make this choice knowingly, overtly opting to replace their constitution, rather than doing so implicitly via some other, seemingly more narrow policy choice.

    In other words, we need a lot more research on comparative delegation constraints in postwar constitutions. We are talking about rules of constitutional interpretation that operate in such a moment of crisis. This is thus not merely a ‘moral or (political) philosophical argument’, as you suggest. It goes to the Grundnorm underlying any democratic-constitutional text, which, in extremis at least, a constitutional jurisdiction must enforce.

    In that regard, if you’ve got the time or inclination, I’d love to know more about the rules that govern delegation (or constitutional amendment or constitutional replacement, for that matter) in the Dutch constitutional text. Perhaps your high court hasn’t had the chance to articulate these constraints over the last half-century, but the crisis may force it to. Of course, de facto, any polity is free to govern itself as it sees fit — again subject to the demands of human rights (i.e., the sovereignty of the individual), which in my view no polity should be free to override. But what about the collective constitutional commitments to a democratic form of government? (Sorry to repeat the question.) In Dutch law, can these be unknowingly relinquished in the way you seem to be suggesting?


  3. @Peter: That is a very interesting comment. My sense would be that you’re right about judicial resistance to implicit delegation, except for one thing. I think most courts, no matter how militant, would prefer to avoid the question of whether delegation to the EU implies a delegation to an undemocratic (or at least less democratic) body.

    Then again, we have the historic examples of the Polish, Czech and Italian supreme or constitutional courts, all of which clashed with the CJEU at one point or another. (Cf. here for the Czech case from yesterday. The Polish case is discussed on the Verfassungsblog in an entry from November 17 last year.) So some courts clearly don’t mind the confrontation.

    More generally, resistance against delegation would normally come not through the courts – we’re not Americans after all – but on the streets. That’s certainly what’s happening in Greece. I can’t assess very well to what extent demonstrations in other countries also focus explicitly and deliberately on this democracy issue, as opposed to austerity generally, but I’d imagine that an EU crackdown would normally lead to demonstrators wondering why their government is doing what the EU says. The only reason why this didn’t happen in Italy is because the people were mostly happy to be rid of Berlusconi.

    The Netherlands is a bit of a strange case. Our constitution explicitly bans judicial review of statutes, while giving Treaties a higher rank than any national law. So under Dutch law this would never come up, unless someone tried to use art. 3 of the 1st Protocol against the EU Treaties. Domestically, any delegation of powers that is in a statute is untouchable for the courts, and given the high degree of monism in the relationship between parliament and the crown, delegation to the executive branch is not generally frowned upon anyway.

  4. From what I understand, the Greek constitution is not that different from the German one. Amendments in certain articles are prohibited as well; those articles have to do with human and social rights, the form of government and the seperation of powers. As for the constitutional commitment to “militant democracy”, the last clause of the Greek constitution states that “Observance of the constitution is entrusted to the patriotism of the Greeks who shall have the right and the duty to resist by all possible means against anyone who attempts the violent abolition of the Constitution”, but is not protected by the constitutional limitation to amendments.

    The other problem that arises in the “Greek sovereignty vs. European democracy” debate is that the Greek Constitution does not define the exact position the European law holds among the legislative sources. It states that the rules of international law and ratified international conventions shall prevail over national law, but it does not acknowledge any superiority over the Constitution itself. There has been a debate over this issue amidst Greek IR academics, at least at the time I was a student, but it is generally accepted that the Constitution is superior to any other legislative source, the European law included.

    In any case, if one accepts Di Fabio’s argument for Germany, I cannot find a reason why it is not applicable for Greece.

  5. Anna (if I may), thanks for adding this. I did not see your comment until just now, but it’s very helpful in providing key background on the Greek constitution. Based on what you’ve said, I would tend to agree with your final paragraph, particularly in view of the “patriotism” article you quote at the tail end of the first paragraph. thanks again — Peter

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