‘Give Up Sovereignty!’: Germany debates whether democracy is compatible with the European project.
The German Constitution Court plans to issue a judgment of vital importance to the ongoing crisis of the Euro on September 12, 2012. Several rounds of European negotiations have led to the proposal for the establishment of the European Stability Mechanism (ESM), an international organization designed to provide funding to Eurozone member countries in need of financial support. The ESM emerged in tandem with the so-called Fiscal Compact, an intergovernmental treaty among Eurozone members placing certain restrictions on national fiscal policies.
Although the German Bundestag adopted both the ESM and the Compact in late June, they faced significant objections domestically—from across the political spectrum—and German President Joachim Gauck has refrained from signing off on them until the Court rules on their constitutionality. Germany is the largest economy in the European Union, and its participation in the ESM and the Fiscal Pact is central to their credibility. Yet the objections raised were serious enough for the Court to take up the case. So the next steps in the Euro drama are on hold until September.
When the Court does speak, several different outcomes are possible. The Court might find that the objections are not grievous enough to outweigh the two-thirds vote in the Bundestag, regardless of the policy merits. (This calls to mind Chief Justice Roberts’ reasoning in his opinion in the Affordable Health Care ruling that the Court’s role is not to protect the country from bad political choices; on the contrary, it is reasonable for the judiciary to defer to the will of the electorate as expressed by its representatives.) In that case, the ESM would be established, it could make loans to countries burdened by sovereign debt, and the Eurozone members would be expected to adopt the budgetary rules spelled out in the Fiscal Compact.
Alternatively, the Court could issue a qualified green light, stipulating that Gauck can sign the legislation, but only if he is willing to articulate reservations on particular points. There is, for example, considerable angst in Germany about the scope of the financial liability the country would take on if it approves of the ESM. The Court might therefore advise Gauck to lend his approval only if he places an upper limit on that cost. Finally, the Court, given its methodical character, may well choose to issue only a temporary injunction against the signing, pending a more thorough hearing. This would of course delay the process even further.