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Legal Loggerheads

Stewing Conflict Between German High

Court and the EU Could Boil Over
The European Union's highest court and Germany's Constitutional Court are facing off over
which institution has the last say when it comes to major political issues. The government
in Berlin is desperately trying to play down the severity of the conflict.

By Markus Becker, Sophie Garbe, Ralf Neukirch und Christian Reiermann

18.08.2021, 10.18 Uhr

The ultimate escalation: Justices at the Federal Constitutional Court in Karlsruhe, Germany Foto: Uli Deck / PICTURE ALLIANCE / DPA

How do you eliminate a problem you can’t solve? The German

government has chosen a pragmatic approach: It is denying that the
problem even exists.

Last week, the government announced it had sent a "communication

from the Federal Republic of Germany to the European Commission"
in Brussels. It is the answer to an infringement procedure that the
European Commission initiated against Germany because it disliked a
ruling made by the country’s high court, the Federal Constitutional
Court.
 DER SPIEGEL 33/2021

The article you are reading originally appeared in

German in issue 33/2021 (August 14th, 2021) of
DER SPIEGEL.

SPIEGEL International

On the surface, the proceedings are about who has the last word when
it comes to European law – the European Court of Justice (ECJ) or the
Federal Constitutional Court. But behind the legal conflict lies a much
bigger question: How deep should European integration go, and who
gets to make that decision?

The EU initiated the proceedings ANZEIGE

following a ruling made by the German

high court in May. The justices found
that the European Central Bank (ECB)
hadn’t sufficiently examined the
proportionality of its PSPP bond-buying
program.

Worse yet, the German court claimed

that the European Court of Justice
(ECJ), which took a different view,
wasn’t doing a thorough enough job reviewing the ECB's activities.
Moreover, it said the European court in Luxembourg had acted "ultra
vires," meaning it had gone beyond its jurisdiction. The German court
ruled that the ECJ’s ruling was "simply not comprehensible" and, as
such, had been "objectively arbitrary."
 ANZEIGE

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The ruling was the ultimate escalation in a long-running dispute. For

the first time, Germany’s Federal Constitutional Court had declared an
ECJ decision to be non-binding. Some commentators at the time, not
only viewed the primacy of EU law over national law as threatened,
but also the very European Union itself. The Federal Constitutional
Court "is a danger to the state," the Süddeutsche Zeitung raged in an
editorial.

From Brussels’ point of view, that couldn’t have been expressed more
aptly. The European Commission stated at the time that the court’s
ruling "constitutes a serious precedent."

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"The last word on EU law is always spoken in Luxembourg," European

Commission President Ursula von der Leyen said right after the ruling.
The Commission then initiated the infringement procedure against
Germany.

It was a delicate step. What is the German government supposed to

do? Put the Federal Constitutional Court in its place and put a question
mark over its judicial independence?

In Berlin, a decision was made to resolve the dispute by declaring it

moot. The letter sent to Brussels by the German government last week
makes no mention of the fundamental conflict between the German
and European understanding of the law. The ruling made by the
Federal Constitutional Court is explained in detail, but much is left out.
It gives the impression that the Karlsruhe court is in line with the ideas
of Brussels and the ECJ.

The court recognizes the autonomy of ANZEIGE

EU law and considers itself bound by AD

the "principle of compatibility with

European law," the document reads. It
goes on to state that the court also
recognizes that the judgments of the
ECJ must, in principle, be observed as a
International Sales Strategy
binding interpretation of EU law. But
the letter ignores the fact that, from the Globalization Partners Download
perspective of the Constitutional Court
in Karlsruhe, the primacy of European
law is by no means unlimited.

Instead, the German government asserts that it will use all means at its
disposal to "ensure full respect for the principles of autonomy, primary
of application and effectiveness and uniform application of Union law."

The letter reflects the attitude of the German government, which has
often been irked by decisions issued on European law by the
Constitutional Court. The justices in Karlsruhe, however, are not
pleased with the contents of the letter, which they view as a snub of the
Constitutional Court.

But the letter is primarily intended as a

peace offering to the Commission, which
must now make a decision on how to
proceed. The "serious precedent" hasn’t
been eliminated by the declaration. And
how could it be? The German government
can’t influence decisions of the Federal
Constitutional Court and it has no power
to overrule them.

Politicians in Brussels knew that before

they initiated the procedure. Above all,
the move was made to send a message to
other countries. The Commission is
concerned that the decision by the Federal
European Commission President Ursula von
Constitutional Court will serve as a der Leyen at the Salzburg Festival in July: One
pretext for countries like Poland to ignore former Constitutional Court justice says the
Commission wants to "coldly” create a "federal
ECJ rulings and further dismantle the rule European state.” Foto: BABIRADPICTURE /
ANDYKNOTH
of law. Polish Prime Minister Mateusz
Morawiecki called the Constitutional
Court ruling "one of the most important decisions in the history of the
European Union."

The approach taken by Brussels hasn’t been very convincing. The

infringement proceedings against Germany "aren’t without irony," says
Alexander Thiele, a professor and European law expert at the
University of Göttingen. "The Commission is taking action against the
Polish government to protect the independence of Poland's judiciary
and is now pursuing proceedings against the German government with
the aim of influencing the judiciary."

How Brussels will react is an open question. A spokesperson said that

the Commission does not provide information about ongoing
proceedings. But there are some indications that it could be dropped
entirely.

The Commission could point out that Germany has conceded the
primacy of EU law. It’s unlikely the Polish government would be
willing to provide such an assurance. It would then be difficult for
Warsaw to cite the Karlsruhe ruling to justify its judicial policy.

Ending the procedure would be a halfway face-saving path for the

Commission to extract itself from a situation that it maneuvered itself
into. After all, if Brussels finds the German explanation insufficient, it
would have to formally demand that Germany respect EU law. If the
situation doesn’t change – and how could it? – the Commission could
refer the case to the European Court of Justice.

The Luxembourg court would then be forced to rule on a case in which

it is a party. This would violate fundamental legal principles and would
be disastrous for the rule of law, Berlin-based international law expert
Christian Tomuschat recently wrote in an article on Verfassungsblog, a
legal website. No one in Brussels is interested in having that happen.

Behind the legal conflict lies a much bigger

question: How deep should European
integration go, and who decides?

If the Commission does not wish to declare the case to be closed, it also
has the option of postponing the procedure. "The Commission can take
as much time as it wants,” Thiele says.

Regardless how the Commission decides, it will not get any closer to
solving the real problem. This lies in the nature of the conflict itself. It
cannot be solved by legal means.

The European Court of Justice argues that it alone can judge how EU
treaties are interpreted and applied and insists that Union law must
have primacy over national law so that the same law applies in all
member states. The court argues this can only be ensured through that
primacy.

In principle, the Federal Constitutional Court does recognize the

primacy of European law. But it also examines which powers Germany
has actually transferred to the EU and whether that has an impact on
Germany’s constitutional identity. Only the German Constitutional
Court can determine a violation of the country’s constitution, the Basic
Law.
Both stances make good sense, but they are also completely
incompatible. What seems like legal hair splitting has a highly political
background. The heart of the matter is the question of who gets to
decide on the future of European integration.

The German Constitutional Court fears that more and more power is
shifting from the member states to the EU without sufficient
democratic legitimacy. Andreas Vosskuhle, the former president of the
Constitutional Court, has expressed this in particularly drastic terms,
complaining at a public appearance that the Commission wants to
"coldly" create a "federal European state."

It may sound a little bit like a conspiracy theory, but there is some truth
to Vosskühle’s accusation. The Commission is keen to regulate as many
things as possible at the European level. The EU often extends "the
transferred powers extremely far, so that that area of competence of
the member states and thus also the field of application of the national
constitution and national democracy is undermined," says former
Constitutional Court justice Dieter Grimm. German justices accuse the
European Court of Justice of giving this behavior pass rather than
keeping the EU institutions in line.

Many constitutional and European law experts were sharply critical of

the German court’s ruling on PSPP. And that criticism may be legally
justified. But rulings by the Constitutional Court on EU policies are
rarely motivated solely by legal considerations. The justices in
Karlsruhe keep a close eye on the consequences their decisions will
have. And politically, the PSPP ruling makes sense.

In June 2016, the court approved the ECB’s OMT program, which
allowed the European Central Bank to buy unlimited amounts of
government bonds during the euro crisis. ECB chief Mario Draghi had
announced at the time that the bank would do "whatever it takes" to
save the euro. These words alone and the ECB decision were enough to
calm the financial markets and the program ultimately didn’t have to
be implemented.

There is much to suggest that the court in Karlsruhe was already of the
opinion at the time that Draghi had overstepped the ECB’s powers. But
if the court had ruled against the bond-buying program, the
consequences would have been immeasurable, and not just for the
common currency zone. The entire EU would have been at risk. So
they ruled the program to be legal despite "considerable concerns."

According to justices at the court, the EU is getting closer and closer to

the point where such allowances will no longer be possible. If, for
example, the rescue package for the bloc for the economic
consequences of the pandemic, which entails the issuance of joint EU
bonds, were to be made a permanent redistribution instrument
without a change to the EU treaties. The ruling is a warning to
politicians not to let things go that far.

It is no coincidence that the conflict between the Federal Constitutional

 Court and the EU over the euro is escalating. The design flaws of the
European Monetary Union (EMU) have been apparent for years now.
It was clear from the outset that it would be problematic to transfer
monetary policy to the European level while leaving financial and
economic policy with the member states. The weakness of the
construct became clear during the euro crisis.

There are plenty of proposals on how to protect the euro in future

crises. But a prerequisite for the implementation of those measures
would be for the member states to amend the European treaties and
transfer responsibility for important parts of their fiscal and economic
policy to the EU. "What the German judges are telling European
leaders … is that decisions for which they ought to take ownership
should not be delegated to an unelected body," French economist Jean
Pisani-Ferry wrote in an editorial in the Spanish daily El Pais in May.
But governments lack the will and the courage to undertake real
reforms.

As long as that remains the state of affairs, any proposals for solving
the problem are futile. It is only a matter of time before the conflict will
heat up again.

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