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A ruling by the German constitutional court has raised serious fears about the collapse of the European Union.
It is a delayed trial of an old fight that has hit the EU at its most vulnerable point. A group of German academics, including a former leader of the far-right Alternative für Deutschland party, Bernd Lucke, presented a case in 2015 to challenge the European Central Bank’s (ECB) bond purchase program.
They hardly expected to win, but they thought they could make a political point. During the eurozone crisis, as now, the ECB was buying the debt of economically weaker EU countries to reduce their borrowing costs and rescue them from the threat of a debt spiral, and ordering national central banks to do the same.
This is an emergency measure taken to keep the eurozone together when its economic imbalances threaten to tear it apart, but it has been hated by German conservatives who believe it hurts savers and pension funds.
Last week, the German constitutional court unexpectedly upheld them. It decided that the ECB did not conduct a “proportionality” analysis of the effect of its bond purchase policies on “public debt, personal savings, pension and retirement plans, property prices and the afloat maintenance of economically unviable companies.”
In a painstaking 110-page judgment, the court ordered the German central bank to stop buying bonds if the ECB failed to produce such an assessment within three months. This immediately raised fears that it could jeopardize current bond buying efforts and trigger a run on Italian debt.
This is dangerous for the eurozone, but not as damaging to the EU as another part of the ruling, which has pulled a thread that some fear may lead to the collapse of their own order.
Previous failure
The German court declared that it was free to ignore an earlier ruling of the Court of Justice of the European Communities (ECJ) on the subject because “the Court of Justice of the European Union exceeds its judicial mandate”.
This is contrary to the concept of primacy of EU law. Under this precept, if the laws of a member state conflict with EU law, EU law takes precedence, and the ECJ is the final authority to judge it. For him European Commission, accepting this is what it means to be a member state.
“The case goes to the heart, to the very base of the European Union,” said an EU official.
“The union is based on uniform interpretation and application of the law,” he added. “Otherwise we will have no union.”
The German court managed to make such a decision because “it slipped through the door of attributed jurisdiction,” according to the official. This refers to the fact that the governments of the member states grant the EU institutions some powers, while retaining others for themselves.
The ruling of the German constitutional court was music to the ears of EU critics in
Poland and
Hungary
The court found that it had the authority to govern because the ECJ had strayed from its jurisdiction into an arena of national power. This is contrary to EU treaties, which hold that the ECJ is the arbiter of EU law, including determining where the limits of the EU’s institutional powers lie.
The EU is weighing its options and will watch the reaction of the German government as it evaluates whether it can prosecute it for breaking EU law.
But a set of fundamental principles links the responsiveness of both Brussels and Berlin.
Under the principle of judicial independence, the German government is unable to interfere with the court’s ruling.
“Eternity clause”
Although the Republic has amended its Constitution several times to bring it into line with EU law, the German puzzle cannot be redressed in this way. It is based on the “eternity clause” of the German constitution. Adopted after World War II to ensure that there can never be a dictatorship again, the clause guarantees certain fundamental principles and can never be changed.
The German constitutional court is highly influential in the region. His decision was music to the ears of EU critics in Poland and Hungary.
These countries are already fighting against the judgments of the ECJ, which has been found against them for interfering with the independence of their courts. Following the German precedent, its courts may simply consider that the ECJ has overstepped its powers and can therefore be ignored.
The EU is not a state and has no army or national guard. Its powers of execution are limited. Its legal order is based on the voluntary compliance of the Member States and their courts.
“If the national courts stop cooperating, the whole system stops,” said Ronan McCrea, professor of constitutional and European law at University College London. “Member states have been defending it for 40 years. Maybe we became complacent about how weak the system is to ensure that. “
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