ESM undemocratic and unconstitutional

(Die Welt 30
juni 2012) The European Stability Mechanism (ESM) and the Fiscal Pact have been
approved by the German parliament. But thousands of Germans have joined forces
to take legal action against these measures.

The Euro Stability Mechanism’s capital stock of 700 billion euros is
intended to provide a buffer against the convulsions of the euro debt crisis.
The 17 signatory states will each pay a proportional amount into the ESM –
irrevocably and without restrictions – or set the money aside to be handed
over, if required.

Capital not yet paid in can be called on at any time by the Board of
Governors, the main body of the ESM. And this Board, consisting of the
respective members of governments with responsibility for financial matters,
has the power to change the level of the authorized capital stock, i.e.
increase it. The ESM can make loans and accept collateral from banks.

Prominent opponents

The signatory states came to an agreement on the ESM because, as is stated
in the treaty, they are “committed to ensuring the financial stability of
the euro area”.

Herta Di¤ubler-Gmelin (left) and Christoph Degenhart (right) of the
“More Democracy” alliance

But opponents say that this should not be done at any cost, and using any
means available. Dissenters are calling for more democracy, and there are a lot
of them. More than 12,000 German citizens have joined “Mehr
Demokratie” [“More Democracy”], the “Alliance for
Constitutional Objections to the ESM and the Fiscal Pact”.

They plan to file suits with the German Constitutional Court in Karlsruhe
against the instruments being deployed to save the euro. Christoph Degenhart, a
Leipzig-based expert on constitutional law, and Herta Di¤ubler-Gmelin, a former
federal justice minister, are spearheading the alliance, which also includes
some of Germany’s smaller political parties.

Another prominent critic is Peter Gauweiler, a parliamentary representative
of the conservative Christian Social Union who has experience with lawsuits
against euro bailout funds. He is fighting the bailout on two fronts: with a
constitutional complaint, and with legal action against the federal government.
He says, to date, parliament has not discussed the bill because important
passages on the ESM are missing.

The Left party has launched a similar action against the government, and
its delegates have also lodged constitutional complaints.

Erosion of
budgetary rights

Was the German Bundestag sufficiently consulted?

”The fiscal pact and the permanent bailout package should be created in
such a way that they conform to the constitutional principles of Germany and of
Europe; that is to say, in consultation with their citizens,” Herta
Di¤ubler-Gmelin explained a few days before the parliamentary vote on the ESM
and the fiscal pact.

Serious criticisms are being made that, on the one hand, it will mean
abandoning the principle that no member state will have to guarantee the debts
of another. On the other, according to a memorandum released by the eminent
lawyer Christoph Degenhart, should the Board of Governors so decide, the member
states would ultimately have unlimited liability, which is contrary to the
German parliament’s participation rights.

Degenhart’s position is that the fiscal pact – which is intended to grant
European institutions controlling powers over the budgets of member states – is
thereby also eroding the budgetary sovereignty of the parliament. He goes on to
say that the European Parliament also has no participation rights on such
issues – despite the fact that there is criticism on all sides about the lack
of democracy at the European Union level.

For a
constitutional Europe

Action to save the euro: German Chancellor Angela Merkel and Italian Prime
Minister Mario Monti

“We are very pro-Europe, but for a constitutional and democratic
Europe,” says Herta Di¤ubler-Gmelin. However, she goes on to say that if
sovereign powers of the German lower house of parliament, the Bundestag, were
to be transferred, it should be to the democratically elected representatives,
i.e. to the European Parliament.

The people spearheading the complaints draw the following conclusion from
their criticisms: that measures to save the euro require democratic
legitimization, both from parliament and from the people. Christoph Degenhart
says that this also requires the strengthening of the rights of the European
Parliament. In his memorandum he quotes the Lisbon verdict of the German
Constitutional Court, which states that “an extensive transition to
independent political sovereignty for the EU” can, according to German
constitutional law, only take place “on the basis of the freedom of action
of an autonomous people”.

Gauck should
not sign

The German Constitutional Court must rule on the complaints filed against
the government

On Friday evening, immediately after the votes in the lower and upper
houses of the German parliament, the constitutional court received not only the
constitutional complaints and the lawsuits against the parliament but also the
relevant applications for the remission of an interim decree. This is aimed at
using interim legal protection to prevent German President Joachim Gauck from
signing the laws before the Constitutional Court makes its decision, which
would allow them to become law.

Whether they can then in fact be implemented is another matter. The ESM and
the fiscal package are agreements under international law to which Germany is
bound. The federal government, in turn, is trying to make its arguments in
favor of the ESM and the fiscal pact clear to the court in what is called a

Prospects of

It is hard to say what prospects of success the legal actions have at the
Court. On the one hand, the Federal Court of Justice – the country’s
second-highest court – has repeatedly made clear that the participatory rights
of the Bundestag must be safeguarded, also and indeed especially with regard to
plans to rescue the euro. On the other hand, economists tend to view the
measures as constitutional.

Patrick Sensburg, a conservative Christian Democrat delegate and chairman
of the Bundestag’s Subcommittee on European Law, points to the explicit new
regulations governing parliament’s participatory rights with regard to the
creation of the ESM. Sensburg believes these give no cause for complaint.
“There was extensive participation of the plenary assembly,” he says.
“The Bundestag has to be consulted on all measures of stabilization aid;
all such measures have to be put to the budgetary committee.” Sensburg
goes on to argue that the acquisition of bonds on the secondary market has also
been examined and deemed legitimate by a special committee, and in 2011 the
Constitutional Court accepted this as sufficient.

Author: Daphne Grathwohl / cc

Editor: Gregg Benzow