The Bundestag approved the EU's plans to raise €750 billion in loans for helping states recover from the pandemic, but once again Germany's constitutional court in Karlsruhe has stepped in to insist that it will have the final word. Karlsruhe last week issued an injunction delaying German ratification of the plan pending its ruling on claims by a group of Eurosceptics that the EU is acting ultra vires, a move which could see urgently needed funding delayed or force Germany to quit the fund.
Will the judges, aware how much is at stake, really be prepared to rule against Brussels on the substantive issue?
Karlsruhe, which has intervened on a number of occasions in the past to hold up EU measures, holds that it, rather than the Court of Justice of the EU (CJEU), has the final word on interpreting EU law and, despite EU treaty clarity on the issue, rejects the primacy of EU law over German law. In that regard last year it overruled the CJEU on the legality of bond-buying by the European Central Bank, a legal confrontation overcome by the government simply seeking extra missing clarifications from the ECB.
An important innovation
But the issue of the primacy of the CJEU was not resolved – the commission could have issued infringement proceedings against Berlin for accepting the Karlsruhe ruling. And the current case could jeopardise not only the fund but the ability of the union collectively to raise money by borrowing. That is seen as an important innovation that can contribute to the evolution of a genuine fiscal union. The plaintiffs insist that the EU treaty requires that loans should be taken out by member states rather than by the EU itself.
But, will the judges, aware how much is at stake, really be prepared to rule against Brussels on the substantive issue? Not least when German MPs are so strongly in support of the fund. The notoriously Eurosceptical court’s record suggests that it revels in brinkmanship in its tussles with its own government, but tends to leave an escape route in its rulings. In the longer term, however, Berlin will have to grapple with the anomaly that its own internal legal order – or specifically its constitutional court’s interpretation of it – remains at odds with its international treaty obligations.