A Moment of Truth in the Schloβbezirk?

Oliver Gerstenberg

On September, 12, 2012, the German Bundesverfassungsgericht (BVG) passed its anxiously awaited decision—heralded as a Schicksalsentscheidung—on whether or not to issue a “temporary injunction,” prohibiting the German President from signing the statutes passed by the Bundestag and the Bundesrat dealing with the sovereign debt crisis in the euro currency area. With its ruling, the Second Senate of the BVG provided the German chancellor Angela Merkel—who was backed by a 2/3 majority of the German Bundestag—with an important victory in the effort to stem the Euro debt crisis. The court struck a tone of deference. Subject to a set of conditions, the court ruled, Germany could move ahead with its contribution the European Stability Mechanism, in concert with the other 16 countries of the eurozone. Those conditions include, among other things, a requirement for parliamentary approval of any increase in the agreed German contribution of 190 billion euros; a requirement that the Bundestag and the Bundesrat be adequately informed; that ubiquitous Bundestag approval is needed for all activations of the ESM; a ban on direct borrowing by the ESM from the European Central Bank; Germany’s right to terminate the ESM at any time.

On the one hand, the decision involved a sense of high drama: indeed, about 37.000 (!) citizens had joined the constitutional complaint (although, in fairness, joining is as easy as signing up to any petition of your choice on highstreet, as a former president of the BVG remarked). According to a Yougov poll, 54% of German citizens hoped the BVG would not let the rescue package pass; anecdotical evidence would suggest the number being even larger. The constitutional complaint itself was submitted by a broad and colourful coalition, spanning from the notorious Peter Gauweiler of the quasi-separatist right-fringe of the Bavarian CSU to the equally notorious Gregor Gysi of the Left Party to Herta Däubler-Gmelin, a social democrat (who years ago had to step down from her position of justice minister for comparing George Bush to Hitler). Leading journalists, pundits and academics had weighed in, demanding that the BVG finally seize the opportunity to issue a Machtwort—by forcefully exercising its authority or at the very least to require a a public constitutional discourse that would lead to a public referendum.

And, in a sense, the court delivered. Nothing less was at stake, the court reasoned, restating its long-standing philosophy, than, well, the citizens’ “right to elect the German Bundestag”—a right, which is “equivalent to a fundamental right” and which “guarantees the citizens’ self-determination and [their] free and equal participation in the state authority exercised in Germany.” The “European Union,” the court warned, must not “ta[ke] possession of the Kompetenz-Kompetenz […] or otherwise violate the Basic Law’s constitutional identity, which is not open to integration.” The German Bundestag must “remain[] the place in which autonomous decisions on the revenue and expenditure are made, including those with regard to international and European liabilities.” The “core of identity of the constitution” demands that “the budget legislature makes its decisions free of other-directedness,” thus leaving it “permanently ‘the master of its decisions’.” The BVG restated the basic principle familiar from its previous decision on the Greek bailout: “from the democratic basis of budget autonomy” it follows: no “consent to an internationally or supranationally agreed automatic guarantee or performance which is not subject to strict requirements and whose effects are not limited” and which is “removed from the Bundestag’s control and influence.” All that, of course, was déjà vu.

Yet, on the other hand, despite all this high-flying rhetorics and the drama, the BVG struck a tone of deep deference vis-à-vis the legislature, which, after all had approved of the measures with a 2/3 majority across the major political parties in the Bundestag; majority required for changing the constitution. As the court’s president, Justice Vosskuhle—notice that the judges of the BVG, in English translation, do refer to themselves “Justices”—explained extra curiam, nobody quite knows with any certainty which measures will be best for Germany or Europe in the current crisis and, indeed, the elected lawmakers of the German Parliament, as representatives of the people, are first and foremost those who should decide, and not the court. So, there’s a limit to what a national constitutional court can do—a firewall between law and polics. Somewhat meekly, and on countless occasions (I’ve stopped counting), the BVG said that “it can be assumed” that the requirements it had set out were being met. The court’s sense of uncertainty is palpable. So the decision comes as an anticlimax—a sobering memento of the very limited role a national constitutional court can play in the highly uncertain and volatile context of the euro-crisis and in the European integration process more broadly; a moment of truth.

In the end, two questions concerning democracy thrust themselves forward. First, it is a fair and open question whether the emergent form of “direct-populist” democracy is really so desirable; a form of democracy, that is, where you can bypass representative democracy, if you’re unhappy with one of its specific outcomes—never mind the 2/3 majority in the Bundestag—and exercise your right to vote, as it were, a second time, by signing up to a constitutional complaint in Karlsuhe, where you need to persuade only 8 “Justices.” The court’s oracular high rhetorics is an open, self-conscious invitation to doing so; yet the tone of deference, of course, comes as a climb-down of sorts.

Second, democracy, of course, is a recursive concept. The hyper-doctrinaire conception of democracy, stubbornly upheld by the BVG—against the odds and come what may—in terms of a “core identity” of the national constitution, which is “not open to integration”—an open-textured concept the meaning of which has remained the arcanum of the court—is out of place and quaint—vieux chou, as the French would say. As to its function, it is a deeply self-serving trope, allowing the court to assert itself despite its own looming uncertainty over its role and, if you will, identity. The conception immediately reveals its extremely formulaic-formalistic, decontextualized character, once you bear in mind—as Martin Schulz, president of the European Parliament, rightly asks us to do—that individual nations no longer have sovereignty over currency matters. Not introducing the euro together with a political union was a mistake. The euro—largely a Franco-German creation—was an incomplete currency in the sense that it had a central bank but not a treasury. As a consequence, by giving up their right to print their own money, countries exposed themselves to the risk of default. But government bonds were, in the early days, treated as riskless. Yet, of all euro-zone countries, Germany is the one which by far has benefitted most from the euro, politically (when it came to German reunification) as well as economically. Leaving or losing the euro would be disastrous, or at least immensely costly, especially for Germany on both accounts. Germany will have to accept the true costs of membership (or leave) and will not be able to hide behind the argument of moral hazard—the risk that debtors will abandon reforms as soon as market pressure is relaxed. The problem with the Karlsruhe-conception of democracy is that those systemic and structural effects are ignored. In the very short term, Europeans need to find a solution for the excessive interest rates that are making it hard for many countries to get their debts under control. A reverse moral hazard is that without a fear of the euro’s collapse, creditors will shirk action to solidify the euro through greater economic, financial, fiscal and political integration and risk-sharing. The Karlsruhe decision is welcome, if only because of its deference to politics, and in the future, the BVG may well, and for the first time, refer to the CJEU—which would be a welcome move.

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