Thursday, April 12, 2012

Eurozone bailouts in the dock

Whenever there's a new, big EU-related initative, say a Treaty or a new bailout fund, you know that one thing will follow: a legal challenge at the German Constitutional Court - the Bundesverfassungsgericht, or BVerfG. And when the heavyweight Court rules, Europe holds its breath (see here, here, here, here, here, here, here and here for example). The Court's rulings on the Maastricht Treaty, the Lisbon Treaty and, most recently, the eurozone bailouts have very much set out the parameters for further EU integration.

While taking the German Constitution, or Basic Law (Grundgesetz) extremely seriously, the BVerfG usually opts for the 'here but no further' approach, and have never fully overturned an EU measure, though it did have some strong things to say about the Lisbon Treaty, while also striking down the German law that implemented the EU's Data Retention Directive. Likewise, the Court has made the introduction of Eurobonds, should it ever come to that, far more complicated (see here for background).

As the Bundestag gears up to ratify both the euro's permanent bailout fund, the European Stability Mechanism, and the German driven 'fiscal treaty' on budgetary discipline within the eurozone, get set for another series of launches. Interestingly, today, we learn from Der Spiegel that none other than former German justice minister Herta Däubler-Gmelin - from the Social Democrats - has said she will bring a legal challenge to the Court against both the ESM and the 'fiscal treaty' on behalf of the 'More Democracy' campaign group, on the basis that the budgetary sovereignty of the Bundestag is being threatened. She claims that the EU plans "cross a red line", and that:
"I'm all for Europe, but not for a Europe that is determined only by the governing elites… It can not be that Europe takes away the rights of national parliaments, without strengthening the European Parliament and the participation rights of citizens accordingly. Europe must be democratic."
We hear you Herta.

Less surprisingly, Germany's far-left party, Die Linke, and CSU MP Peter Gauweiler (a regular litigator) are planning legal challenges as well.

Some people seem to have this strange idea that even in a crisis, the rule of law should be upheld (yes, we are being sarcastic).

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