Let the Eurozone be competent: the German Federal Constitutional Court continues to bless the EU.

Author:Anderson, Adam
 
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  1. INTRODUCTION II. BACKGROUND A. How Do Divided Countries Form United Solutions? B. Can the EU Be More Competent than the Sum of Its Parts? C. The German Constitution: Barrier or Bridge? III. THE CRISIS ZONE A. The Euro Crisis B. Rough Drafts to a More Permanent Solution IV. THE PERMANENT SOLUTION THAT ALMOST DIED A. The Creation of the ESM V. LEGAL CHALLENGES A. Pringle: From Ireland to the European Court of Justice B. The Last Word: Enter the Bundesverfassungsgericht VI. IRELAND LOOKS TO EUROPE WHILE GERMANY LOOKS WITHIN VII. CONCLUSION I. INTRODUCTION

    As of this Comment, the world is still grappling with recovery from the 2008 financial crisis that rocked the West and reverberated across the globe. The European Union, a still growing, supranational organization, is coming to grips with just how to react to grave financial crises given its limitations as a federation of sovereign states. The Eurozone in particular, a monetary and fiscally united union within a union, (1) is grappling with its own unique set of financial problems. (2) Eurozone skeptics have speculated as to whether Greece will either leave the Eurozone on its own cognizance or be forced out. Many fear that the Greek financial problems are systemic, and contagion will spread to other countries that show financial vulnerability. (3) Although the problems belong to the European Member States as a whole, one thing is certain: it will be the EU's main power player, Germany, who will shape the roadmap going forward.

    Germany is the Eurozone's largest member in both population and economic power; (4) this makes it a major player in deciding the future of the European Union and Eurozone alike. When German legislation lends its input and influence to shaping EU policy, it is often challenged from within. (5) This can create a headache for EU policy makers who might be able to get legislation enacted but who nonetheless must always deal with the uncertainty that future legislation could be invalidated by the Bundesverfassungsgericht ("BVerfG"), (6) thereby removing German support that may have already been given. Adding to this stress, and perhaps exasperation, is the idea that the European Union was created in a way that allows its Member States to decide policy with a European Court of Justice. This Court was instituted as a judicial watchdog over all Member States, (7) and it is anathema that the BVerfG should indirectly hold the same power, essentially giving Germany a special veto status.

    This Comment attempts to define European policy-making in a more concrete way by showing both the agreeability but yet ultimate authority of the BVerfG in sanctioning EU legislation. It cannot be stated as a matter of fact that the BVerfG considers the political moves of its rulings. However, it has a track record of affirming Bundestag EU legislation, which almost always requires German support. This Comment will show that even the latest EU Treaty, the European Stability Mechanism, was given the BVerfG's green light with minor restrictions on future use of the mechanism.

    Part II of this Comment will describe how the European Union enacts legislation that creates mechanisms to deal with crises, e.g., Europe's debt crisis, as well as lay out a brief history of German constitutional challenges to European crisis legislation. Part III will discuss the European financial crisis generally, and examine Europe's swift reaction to it by establishing the European Financial Stability Mechanism and European Financial Stability Fund. Part IV will then detail the creation of the European Stability Mechanism, a more permanent solution to the current European financial crisis as well as future crises, and the eventual court rulings by the European Court of Justice, as referred to it by the Irish Supreme Court, and BVerfG that followed. Part V will then examine the contrasting paths taken by the Irish and German Supreme Courts, shedding some light on the shadow cast over the former by the latter. It will attempt to highlight the reality for EU Member States that might wonder about the validity of future Eurozone legislation: practically speaking, all roads lead to the BVerfG. Consequently, it might give some consolation to note that this is not necessarily such a bad thing.

  2. BACKGROUND

    1. How Do Divided Countries Form United Solutions?

      Years of cooperation, legislation, and court battles have gone into constructing what is now the European Union. (8) Members of the Eu envisioned a European Economic and Monetary union ("EMU") whose goals were, to name just a few, the coordination of economic policies and the implementation of a single currency, allowing for higher efficiency in cross-border trade and purchasing. (9) In order to facilitate legislation that acts as mechanisms to shape common policy within the Eurozone, the European Council, (10) empowered under the EMU, may craft legislation dealing with financial affairs, such as the EFSM and EFSF. (11) Such legislation was enacted to fend off the worsening Euro Crisis originally taking shape in Greece. (12)

      The creation of legislative mechanisms is no easy task. The EU's decision-making process consists of multiple bodies of elected and appointed officials, the first of which is the Commission. (13) The Commission has the power to initiate legislation that it then recommends for adoption by the European Parliament (14) and the Council. (15) The latter two bodies work together to pass legislation. (16) It is worthwhile to note that these three bodies are designed to comprise a broad European demographic. (17) The Commission, which is supposed to represent Europe's interests as a whole, rather than the interests of individual Member countries, (18) is headed by a president who is nominated by the Council and then approved by a majority vote of the European Parliament. (19) The president then selects the commissioners from a list of candidates put forth by EU countries and submits them for approval by the Council and then the EU Parliament, followed by official appointment by the Council to serve five-year terms. (20)

      The exclusive right of the Commission to initiate EU legislation stems from an attempt to balance the interests of the EU as a whole. (21) This was meant to facilitate further EU integration. (22) The EU is made up of a union of countries, some of them much larger than the others. As such, the Commission was meant to give equal representation to Member States, regardless of size, as opposed to the Parliament to which nationals are elected based on proportions of their population. (23)

      The Council, on the other hand, is comprised of governmental representatives from the Member States. (24) This body is made up of the heads of EU Member States, along with the president of the Commission and a permanent Council President. (25) The focus of representation, therefore, is to represent the interests of Member States, unlike the Commission which was designed to represent the EU as a whole. The Council ministers have many responsibilities, such as passing EU laws, signing agreements with non-EU countries, approving the EU budget, and coordinating broader policies among the Member States. (26) There are ten different configurations in which the Council ministers sit, each based upon the topic to be discussed, one of which is the Finance Ministers Council ("ECOFIN'). (27) This is done by countries sending council members who are government ministers in the area of policy to be discussed. (28) Meetings are chaired by the minister belonging to the country that holds the EU presidency. (29) Currently, a qualified majority is required for the Council to approve a decision. (30)

      It is the job of the Council to define the broad guidelines under which the European Community will function, including policies dealing with economics and defense, as well as crafting treaty reform and setting a framework for the accession of new Member States. (31) The Lisbon Treaty, which expanded the powers of the Council, calls for the Council to define the guidelines dealing with implementing legislation. (32) This last aspect dealing with legislation seemingly forces the Commission to work within a framework set by the Council. (33)

      Council decisions are made by voting, except where treaties provide for exceptions. (34) As previously noted, a qualified majority vote is required. (35) This is increased to a supermajority when a vote is taken on a resolution not proposed by the Commission. (36) This does not mean that minority members are completely without recourse. A minority of Member States can vote to delay passage of a decision in order to prolong negotiations so that a state's vital interests may be more fully considered. (37) Treaties, however, require a much higher standard for amendments to be made: a "common accord" made within an Intergovernmental Conference, signatures of all Member State governments, and ratification by all Member States in accordance with their respective constitutional requirements. (38)

      While the Council is representative of national governments in the EU, the members of the European Parliament are elected directly by EU voters to serve five-year terms. (39) Essentially, this chamber was meant to be co-decisive with the Council. (40) Within the Parliament, members represent a political persuasion rather than a national identity. (41) Each Member State is given a set number of seats that are up for election which are proportioned according to Member States' populations. (42) The Parliament must be in agreement with the Council on the exact legislative text before it is passed, and passage requires the signatures of presidents from both the Parliament and Council. (43)

      Furthermore, the EU follows the guiding principle of subsidiarity, to maintain limits on the EU's competences, and national parliaments "must see to it that the principle of subsidiarity is respected." (44) This principle calls for EU action...

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