{"id":28567,"date":"2020-05-15T09:27:00","date_gmt":"2020-05-15T06:27:00","guid":{"rendered":"https:\/\/eliamep.lncdoo.com\/i-apofasi-weiss-os-apotychia-tou-germanikou-syntagmatismou\/"},"modified":"2024-08-28T11:05:33","modified_gmt":"2024-08-28T08:05:33","slug":"i-apofasi-weiss-os-apotychia-tou-germanikou-syntagmatismou","status":"publish","type":"post","link":"https:\/\/www.eliamep.gr\/en\/i-apofasi-weiss-os-apotychia-tou-germanikou-syntagmatismou\/","title":{"rendered":"The German Constitutional Court\u2019s Weiss judgment is a Failure of German Constitutionalism"},"content":{"rendered":"

In this paper Prof. Pavlos Eleftheriadis<\/strong> offers a first reaction to the judgment of the German Federal Constitutional Court in Weiss regarding the ECB’s bond buying programme. He argues that the judgment is an unprecedented revolt against the law of the European Union.<\/p>\n

\u2022 The judgment of the German Federal Constitutional Court in Weiss is an unprecedented revolt against the shared law of the European Monetary Union<\/p>\n

\u2022 The Court has departed from its prior case law and especially the well-established precedents in Lisbon (2009) and Honeywell (2010) which explained how a democratic constitution is open to European integration<\/p>\n

\u2022 The Court\u2019s arguments seem to ignore the clear constitutional obligation created by Article 23 of the German Basic Law to comply with EU law in all cases, except when there are very serious constitutional reasons not to do so.<\/p>\n

\u2022 The Court promotes an unusual theory of the \u2018constitutional identity\u2019 of Germany as a matter of the continuing \u2018popular sovereignty\u2019 of the German people, which according to the Court can only be expressed through the present Bundestag and \u2013 it appears – cannot be delegated, shared or exercised in common with other nations.<\/p>\n

\u2022 The Court\u2019s statist theories, which have no imitators in other European courts, place it now well outside the European mainstream.<\/p>\n

\u2022 The Court\u2019s doctrines create a potential constitutional crisis in Germany, since they antagonise the clear democratic choice of the German people to remain a member of the Eurozone, on the basis of novel doctrines about identity, democracy and popular sovereignty.<\/p>\n

You may find the full text in pdf here<\/a>.<\/p>\n

Pavlos Eleftheriadis<\/strong> is Professor of Public Law at the University of Oxford and a\u00a0Fellow of\u00a0Mansfield College, Oxford.\u00a0\u00a0He teaches\u00a0European Union law, constitutional law and jurisprudence.\u00a0He is also\u00a0 barrister in England and\u00a0Wales and practises before the English courts in public law, environmental law, EU law and human rights\u00a0from Francis Taylor Building in the Temple.\u00a0\u00a0He is the author of\u00a0L<\/a>e<\/a>gal Rights<\/a><\/i>\u00a0(Oxford University Press, 2008) and\u00a0\u00a0A Union of Peoples: Europe as a Community of Principle<\/em><\/a>\u00a0 (Oxford University Press, 2020).<\/p>\n

\n

The judgment of the German Federal Constitutional in Weiss<\/em><\/a>, <\/em>2 BvR 859\/15 and others of 5 May 2020, is an unprecedented decision. It holds that the ECB and the Court of Justice of the EU have violated EU law by failing to apply correctly the principle of proportionality. It declares their decisions unlawful and effectively non-existent in Germany. It departs from EU law in a radical way, because it refuses to follow the Judgment of the Grand Chamber of the Court of Justice of the EU in Case C-493\/17 Weiss<\/em><\/a> of 11 December 2018, which was the response to the German Court\u2019s preliminary reference under Article 267 TFEU. The Court issued a decision that requires the ECB to re-issue a Decision with better reasoning, even though the ECB was not a party to the case. The judgment is also written in an ill-tempered style very rarely seen in judicial decisions of that status. How did this happen?<\/p>\n

The Judgment<\/h2>\n

The case concerns a very substantial bond buying programme known as Public Sector Asset Purchase Programme (PSPP), which has been pursued by the ECB in various ways since 2015. The PSPP is part of a broader programme of bond buying by the ECB, which is called \u2018Expanded Asset Purchase Programme\u2019 (EAPP), which aims to expand the money supply in the Eurozone in order to stimulate consumption and to increase the inflation rate to just below the limit of 2 per cent. Under that programme the ECB and the National Central Banks purchase government bonds and similar debt instruments issued by the governments of the members of the Eurozone, international organisations and multilateral development banks. It is reported that by late 2019 the ESCB had acquired bonds totalling approximately EUR 2,5 trillion under the EAPP, of which more than EUR 2 trillion were part of the PSPP.<\/p>\n

The case arose by four separate applications to the German Constitutional Court by Eurosceptics politicians, including a former leader of the nationalist AfD party. They argued that the PSPP was in violation of their individual rights under the Constitution, because it was a breach of the prohibition of monetary public sector financing in Article 123 TFEU, of\u00a0 the principle of conferral of powers of Article 5(1) TEU and of the principle of proportionality. The German Court stayed the case and referred it to the Court of Justice of the EU (CJEU) for a preliminary ruling. In its judgment, in Case C-493\/17 Weiss<\/em><\/a>,<\/u><\/em> the CJEU agreed with the earlier Opinion of the Advocate General and found that the PSPP did not go beyond the ECB’s mandate, did not violate the prohibition of monetary public sector financing and did not violate the principle of conferral. The Court also found that the ECB Decisions satisfied the principle of proportionality.<\/p>\n

\u201c\u2026<\/em>the judgment holds that the ECB\u2019s Decision to launch the PSPP programme was legally flawed in having not taken into account the full economic consequences this programme it was likely to have. The German Court adds that the same failure was repeated by the Court of Justice of the EU which in its own judgment also failed to apply proportionality correctly\u201d<\/em><\/p><\/blockquote>\n

The judgment of 05 May is the response of the German Court. In its more than one hundred pages of text, the judgment holds that the ECB\u2019s decision to launch the PSPP programme was legally flawed in having not taken into account the full economic consequences this programme it was likely to have. The German Court adds that the same failure was repeated by the Court of Justice of the EU which in its own judgment also failed to apply proportionality correctly. The German Court found that the PSPP constitutes a violation of the strict mandate of the ECB to pursue monetary policy, unless its own assessment on proportionality can show that the \u2018economic\u2019 effects are \u2018proportionate\u2019 to its monetary aims, in some way. It gave the ECB three months to correct the error, if possible.<\/p>\n

The question of \u2018Proportionality\u2019<\/h2>\n

The case turned in the end on the application of proportionality to the competences granted to the ECB by Article 127(1) TFEU. This Article is not at all easy to interpret since it includes this permissive provision: \u2018<\/em>Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union\u2019. <\/em>It is not clear how proportionality applies here.<\/p>\n

\u201c\u2026the CJEU concluded giving it a clean bill of health in terms of \u2018proportionality\u2019 and saying that the Decision is not \u2018vitiated by a manifest error of assessment\u2019.\u00a0 Th<\/em>e German Constitutional Court disagreed\u201d<\/em><\/p><\/blockquote>\n

In the normal case, proportionality organises restrictions to some overriding right, for example a human right or one of the four freedoms of the Treaties. There is a presumption there in favour of some freedom. Here, the various economic considerations do not seem to be organised in such a way. There is no presumption for or against any given purpose. What needs to be done is to promote monetary and not economic policy. As a result, the Court of Justice performed a review that was in practice closer to what English lawyers call \u2018rationality\u2019 review, which gives the decision maker very wide leeway to make policy decisions. After noting that\u00a0 the PSPP \u2018is intended to ease monetary and financial conditions, including those of non-financial corporations and households, thereby supporting aggregate consumption and investment spending in the euro area and ultimately contributing to a return of inflation rates to the levels sought over the medium term\u2019 (par. 76) the CJEU concluded giving it a clean bill of health in terms of \u2018proportionality\u2019 and saying that the Decision is not \u2018vitiated by a manifest error of assessment\u2019 (par. 78).<\/p>\n

\u201crather than accepting that proportionality applies in a slightly different way in Luxembourg, the German Court demanded that the CJEU \u2013 and by extension all other jurisdictions of the EU – adopt the German sense as the only \u2018methodologically\u2019 acceptable\u201d<\/em><\/p><\/blockquote>\n

The German Constitutional Court disagreed. It considered that the court had to decide matters by \u2018balancing\u2019 the economic arguments more fully. Remarkably, the German Court was very clear on the differences between the EU and the German accounts of proportionality. In a very detailed discussion the German Court cited thirty six <\/em>different judgments of the CJEU that confirm the differences of approach (par. 126).\u00a0 Nevertheless, rather than accepting that proportionality applies in a slightly different way in Luxembourg, the German Court demanded that the CJEU \u2013 and by extension all other jurisdictions of the EU – adopt the German <\/em>sense as the only \u2018methodologically\u2019 acceptable. This by itself shows that the Court was not willing to tolerate any departure from German law at all.<\/p>\n

The Strange Doctrine of \u2018Budgetary Autonomy\u2019<\/h2>\n

One may find the reason for the Court\u2019s insistence, if one looks at another novel and strange doctrine that the Court added to proportionality. The doctrine of \u2018budgetary sovereignty\u2019 or \u2018budgetary autonomy\u2019 means that the current<\/em> German Parliament must have complete control over all \u2018financial matters\u2019 that concern the state. It cannot share decision making powers with any foreigners nor can it share risks with them.<\/p>\n

This doctrine is stated in Weiss<\/em> as follows:<\/p>\n

\u2018Art. 38(1) first sentence, Art. 20(1) and (2) and Art. 79(3) GG protect, in particular, the budgetary powers of the German Bundestag \u2026 and its overall budgetary responsibility as indispensable elements of the constitutional principle of democracy<\/u> \u2026 It is for the German Bundestag, as the organ directly accountable to the people, to take all essential decisions<\/u> on revenue and expenditure; this prerogative forms part of the core of Art. 20(1) and (2) GG, which is beyond the reach of constitutional amendment\u2019<\/u><\/em> (par. 104, emphasis added).<\/p>\n

This is in my view the strangest part of Weiss<\/em> because it directly contradicts the idea that Germany should be a member of the Eurozone at all.<\/p>\n

As is well known the European Union\u2019s main principle is that states should share economic decision-making with one another. They do so either through the Treaties, and the freedoms established there, or through secondary law. This is the basis of the single market. For example, the free movement of goods, services, persons and capital exposes all member states to economic uncertainties that are caused by the free and uncontrolled movement of goods, persons and capital. The Union is based on these shared risks and the associated transfers of wealth from one country to another. The EU member states joined willingly on the basis of the treaties, having considered that the benefits of openness in the single market \u2013 economic, political and ethical – outweighed the costs.<\/p>\n

This is even more clearly so in the case of the EMU, where the members of the Eurozone have decided to give up something extremely valuable to them, namely their monetary and exchange rate policies. All states are now exposed to the decisions of the ECB which they cannot fully control, although they are being represented in its Governing Council. They have made a democratic decision to share economic and fiscal powers. This the whole point of the European Union. How can you enjoy budgetary \u2018autonomy\u2019 when your budget is written in a currency you have no control over?<\/p>\n

How then did Germany manage to join the single market and the EMU? The answer is that this doctrine did not exist at the time. The Weiss<\/em> judgment cites only the Lisbon<\/em><\/a> judgment of 2009 as the original statement of the principle, but the principle there was something entirely different. The contrast is rather striking.<\/p>\n

In Lisbon<\/em><\/a> (BVerfGE 123, at par. 256) the Court had stated that the Bundestag only needed to have \u2018overall responsibility\u2019. The Court said:<\/p>\n

\u2018The openness to legal and social order and to European integration which the Basic Law calls for, include an adaptation to parameters laid down and commitments made, which the legislature responsible for approving the budget must include in its own planning as factors<\/u> <\/em>which it cannot itself directly influence<\/u>. What is decisive, however, is that the overall responsibility<\/u>, with sufficient political discretion regarding revenue and expenditure, can still rest with the German<\/em> Bundestag\u2019 (Lisbon <\/em>judgment, <\/em>par. 256, emphasis added)<\/em>\u00a0<\/em><\/p>\n

That was in 2009, at a time of openness. The current Court takes a very different view.<\/p>\n

\u201cThe main reason, therefore, why the proportionality review of the CJEU was inadequate from the German point of view was that it did not consider the potential \u2018losses\u2019 of the PSPP bond buying programme, from the point of view of \u2018budgetary autonomy\u2019.<\/em><\/p><\/blockquote>\n

The main reason, therefore, why the proportionality review of the CJEU was inadequate from the German point of view was that it did not consider the potential \u2018losses\u2019 of the PSPP bond buying programme, from the point of view of \u2018budgetary autonomy\u2019. One of the losses was precisely the impact to the \u2018budgetary autonomy\u2019 of the states, as the Court explains:<\/p>\n

\u2018In that regard the CJEU does not make it clear which opposing interests these two safeguards serve; objectively it can be assumed that they serve the budgetary autonomy<\/u> of Member States and thus promote fiscal policy interests, which do not fall within the ambit of monetary policy, as follows from Art. 126 TFEU. However, it appears that other opposing interests are not taken into consideration\u2019<\/em> (par. 132, emphasis added).<\/p>\n

In this respect, the idea of \u2018budgetary autonomy\u2019 was also at the very heart of the case.<\/p>\n

\u201cMember states normally accept the primacy of EU law through an understanding of the required division of labour among courts and through a principle of \u2018institutional tolerance\u2019 […] They accept that they have to recognise the primacy of EU law in all cases, unless something is required of them that violates a deeper principle of the constitution\u201d<\/em><\/p><\/blockquote>\n

The German Court has abandoned the European mainstream<\/h2>\n

This brief description of the case shows that the German Constitutional Court has abandoned the established way that most European courts understand the primacy of EU law. Member states normally accept the primacy of EU law through an understanding of the required division of labour among courts and through a principle of \u2018institutional tolerance\u2019 (as I explain in detail at ch. 4 of my recent book A Union Peoples<\/em><\/a>, <\/em>OUP, 2020). They accept that they have to recognise the primacy of EU law in all cases, unless doing so violates some important principle of the constitution. This means that EU law has effect equal<\/em> to the rest of the constitution. Precisely this is recognized by the German Constitution in Article 23(1). Until recently this was also recognized in Germany under the Honeywell<\/em><\/a> judgment of 2010, which reserved an \u2018ultra vires\u2019 review only on what we could loosely call \u2018constitutional essentials\u2019. Very surprisingly, the German Constitutional court has now turned its back on this case. The Court cites it, but it is now pursuing an entirely different path.<\/p>\n

\u201c<\/em>The court now overlooks Germany\u2019s constitutional obligations to the EU and focuses instead on a strange construction of a principle of \u2018constitutional identity\u2019 that relies on a mystical idea of the \u2018sovereignty of the people.\u201d<\/em><\/p><\/blockquote>\n

The court now overlooks Germany\u2019s constitutional obligations to the EU and focuses instead on a strange construction of a principle of \u2018constitutional identity\u2019 that relies on a mystical idea of the \u2018sovereignty of the people\u2019 (and whose intellectual origins go back to Carl Schmitt). It lies \u2018beyond the reach\u2019 of any requirements of EU law, even though those requirements are explicitly included in the constitution\u2019s text. The Weiss<\/em> judgment says:<\/p>\n

\u2018The democratic legitimation by the people of public authority<\/u> exercised in Germany belongs to the essential contents of the principle of the sovereignty of the people <\/u>and thus forms part of the Basic Law\u2019s constitutional identity protected in Art. 79(3) GG; it is therefore beyond the reach<\/u> of European integration in accordance with Art. 23(1) third sentence in conjunction with Art. 79(3) GG\u2019<\/em>.<\/p>\n

This is a very strange doctrine indeed. Why is Germany\u2019s constitutional \u2018identity\u2019 dependent on the unidentified object of the \u2018sovereign people\u2019? Why is \u2018constitutional identity\u2019 not a matter of the constitutional<\/em> text<\/em>, which has been created through democratic processes over many years? Why does \u2018constitutional identity\u2019 not involve a moral duty to cooperate with the other member states on the basis of reciprocity according to the terms of EU law, as required by Article 23(1) of the Basic Law?<\/p>\n

Conclusion<\/h2>\n

If this analysis is correct, then Weiss<\/em> marks a very serious departure of the German Constitutional Court from its earlier case law, which was open to the transnational institutions of the EU as required by Article 23. It would thus be wrong for the other member states to believe that the problem will just go away. It will not go away, as long as the German Court refuses to accept that sharing power and risks with transnational institutions do not compromise \u2018popular sovereignty\u2019, democracy or \u2018constitutional identity\u2019, but are ordinary and principled features of a liberal and democratic constitution.<\/p>\n

There is, thus, no other alternative, in my view, to having the European Commission launch infringement proceedings against Germany before the Court of Justice for the violation of EU law. This may not solve the problem, of course, since the German Constitutional Court may still choose to disobey the resulting judgment of the CJEU. But it may be an opportunity for German legal scholars to discuss openly and frankly the strange and novel doctrines of the Constitutional Court. It may be a chance for the judges themselves to see that these doctrines are paradoxical and false. They have been rejected \u2013 I believe \u2013 by all other senior courts in Europe. The judges\u2019 duty is to interpret the Constitution as it is, on the basis of its text, not to make it up as they wish according to their public policy preferences. The cause of this crisis lies firmly within the German Constitutional Court\u2019s strange and misguided doctrinal innovations.<\/p>\n

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In this paper Prof. Pavlos Eleftheriadis offers a first reaction to the judgment of the German Federal Constitutional Court in Weiss regarding the ECB’s bond buying programme. He argues that the judgment is an unprecedented revolt against the law of the European Union. \u2022 The judgment of the German Federal Constitutional Court in Weiss is […]<\/p>\n","protected":false},"author":14,"featured_media":28568,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[492,102],"tags":[380,381,382,383],"program":[17],"acf":[],"_links":{"self":[{"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/posts\/28567"}],"collection":[{"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/comments?post=28567"}],"version-history":[{"count":2,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/posts\/28567\/revisions"}],"predecessor-version":[{"id":44868,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/posts\/28567\/revisions\/44868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/media\/28568"}],"wp:attachment":[{"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/media?parent=28567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/categories?post=28567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/tags?post=28567"},{"taxonomy":"program","embeddable":true,"href":"https:\/\/www.eliamep.gr\/en\/wp-json\/wp\/v2\/program?post=28567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}