W&L Professor Russell Miller Comments on Recent German Constitutional Court ESM Decision

Here is an excerpt from Professor Miller’s commentary, which is available in full at http://www.aicgs.org/issue/the-euro-rescue/:

Following its surprising, premature exit from this summer’s UEFA European Soccer Championship, it is understandable that Germany has turned its hopeful eyes once again to the international game.  Yes, qualification for the 2014 World Cup is underway.  And Germany is winning again, adding a 2-1 victory over Austria to an earlier 3-0 triumph over the Faroe Islands.  The Nationalelf is well ahead in its qualifying group.  But these are expected victories in the most preliminary stage of Germany’s drive for a fourth star.  The team’s website declares:  “Despite their success, Head Coach Löw and his players are not satisfied.”  The games that matter await them in Brazil two years from now.

We are in much the same position following the German Federal Constitutional Court’s decision, which allowed the country’s ratification of the European Stability Mechanism (ESM) Treaty to go forward.  This game led to an utterly predictable result.  And it was only the latest legal episode in the bigger, never-ending story of Germany’s awkward integration into Europe.

The Court’s Second Senate rejected temporary injunction applications that would have kept Germany out of the ESM until the Court could rule on the substance of several complaints that alleged violations of parliamentary prerogatives and the principle of democracy (Articles 20, 38, and 79 of the Basic Law).  Europe’s flailing effort to contain and ultimately control the debt crisis has been left to stagger on.  But considering the breathtaking implications for the world economy had the Court blocked Germany’s essential participation in the new permanent rescue apparatus, there was as much suspense in this judicial drama as there was in Germany’s recent fixture with the Faroe Islands.  Hours before the Court’s Second Senate announced its decision, a German colleague summed up the result that legal experts were predicting:  “Of course the Court will approve the ESM.  What else can it do?”  Showing their great relief over this anti-climax, currency and securities exchanges nevertheless made gains immediately after this latest victory for Europe was announced in Karlsruhe.  As expected, the decision also pronounced limitations on further or ongoing German integration.  This has been the Court’s game plan across decades:  tolerate the latest manifestation of European integration while using each case to articulate or reassert domestic constitutional limits on that process.  Two balls hit the back of the net in this regard.  First, the Court insisted that Germany’s ratification of the ESM Treaty could go forward only if the Parliament’s ratification established, as a matter of international law, that Germany’s commitment to the ESM could not be pushed beyond € 190 billion without new and explicit approval from the Parliament.  This, the Court explained, is necessary to maintain Parliament’s democratically legitimated budgetary authority, which the Court regards as a fundamental piece of Germany’s unalterable constitutional identity.  Second, the Court reinforced Parliament’s competence for further European integration by demanding that Germany’s ratification contain reservations to the ESM Treaty’s confidentiality provisions.  If strictly construed, the Court worried, such confidentiality rules might have been invoked to hinder or prevent the flow of information about ESM policy to the German Parliament.  The first of these limitations was the slightly more impressive of the two shots.  But in the event, it was nothing spectacular.  In making the point about Parliament’s budgetary prerogative, the Court relied extensively on its decision from last September in which it upheld Germany’s participation in Europe’s ad hoc efforts to stave off Greece’s financial collapse.

Read the rest of the commentary at http://www.aicgs.org/issue/the-euro-rescue/.

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