Julian Arato on the Eurozone Crisis and the German Federal Constitutional Court

Continuing our series of posts related to Eurozone governance issues, I have invited Julian Arato to offer the following two part comment on the role of the German Federal Constitutional Court (FCC) in the EZ crisis and its resolution.  The first part of his comment lays out some background to the role of the FCC; the second part specifically addresses the FCC’s 2009 Lisbon decision.  Julian Arato is an LLM candidate at NYU Law School, where he is also an Institute of International Law and Justice scholar.  OJ’s thanks to him for these contributions.

Thanks so much to Ken Anderson and OJ for the chance to weigh in on the European implications of the German Federal Constitutional Court’s (FCC) emerging stance on political (and financial) integration.   As both Ken and Peter Lindseth have recently noted—here and at eutopia law blog, respectively—the FCC appears poised to assert a strong role in European governance with regard to the ongoing financial crisis within the Eurozone (not to mention everywhere else).  Indeed, as a matter of law, the Court has long proclaimed its critical role in European governance, as a gate-keeper charged with determining the extent of Germany’s integration into the wider European polity, as well as identifying and vindicating the limits to any such integration under the German constitution (the Basic Law).  What has changed is the political context: until recently the Court’s most important opinions on integration have concerned law-making at the European level in relatively normal times—either through legislation by the constituted European bodies (Solange) or more recently through painstakingly and publicly negotiated efforts at further treaty-making (Maastricht and Lisbon).  By contrast, the FCC’s recent assertiveness comes in an exceptional moment of fiscal crisis—a moment at which, moreover, Germany appears to hold the future of the Eurozone within its purse.  While the Court’s legal stance on integration is nothing new, its political clout seems to have grown exponentially.

I agree with much of what has already been said.  It is especially important to recognize that the Court is not opposed in principle to further fiscal integration as a means of mitigating the deepening crisis (even at potentially high monetary cost to Germany)—as Lindseth forcefully notes in his commentary on a recent interview with outgoing FCC judge Udo Di Fabio in Der Spiegel.  The Basic Law is explicitly open to European integration, and indeed encourages the process.  At the same time, everyone understands that there are some constitutional limits to integration.  The Court has repeatedly made clear since Solange I that the openness of the Basic Law to integration is limited in light of other provisions of the Basic Law: integration may not be accomplished by ordinary legislation, but only by constitutional amendment pursuant to Article 79; as such all movement toward integration is subject to the conditions of the amendment rule, particularly the eternity clause of 79(3) (entrenching human rights and Germany’s democratic “identity” as unamendable features of the Constitution) (Solange I, ¶22).   What is not always sufficiently appreciated, and remains especially obscure in the present context of the economic crisis, is the full extent and nature of these constitutional limitations on integration in the Court’s jurisprudence.

That’s by way of background to the controversy.  In a second installment, I propose to add a little context, by emphasizing the Court’s strongest statement of principle on the possibilities and limits of integration under the Basic Law—expressed in the Lisbon case of 2009 (a decision which I’ve discussed more extensively in a longish post over at EJILTalk!).  Properly understood, the decision in Lisbon looms like a specter over the Eurozone crisis. But how it does so, I’ll hold for a second post.