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Julian Arato on the Eurozone Crisis and the German Federal Constitutional Court, Part 2

(This is the second part of a guest post by Julian Arato, LLM candidate at NYU Law School; our thanks to him.  The first part can be found here.) In my last comment, I said that the 2009 decision in Lisbon looms like a specter over the Eurozone crisis.  Let me explain a bit more why and how. The key point is that in Lisbon the Court construes the entrenchment of Germany’s “democratic identity” in Article 79(3) as establishing two different types of limitations to German integration with Europe under the Basic Law: one relative and surmountable, the other absolute.  Everyone recognizes that Lisbon affirms limits of the first type, meant to protect democratic forms of government.  Less well appreciated is the Court’s assertion that the Basic Law includes limits of the second type, absolutely prohibiting any delegation that would irreversibly vitiate the sovereignty of the German state (meaning, more concretely, the ultimate ability of the German authorities to determine and interpret the nature and extent of German integration into Europe). The first type of limit seeks to protect democratic participation in governance.  It takes the Solange model: integration cannot proceed if it would transfer significant power from German democratic authorities to European authorities that are insufficiently democratically accountable.  Solange-type limits are not absolute but relative: the FCC is willing to permit the transfer of powers from democratic national authorities to supranational authorities so long as the latter are sufficiently democratic, and offer suitable avenues for participation by the German people.  A potential delegation of power to Europe may breach this relative limitation of democracy today, in light of the oft-noted democratic deficit in the European institutions as we know them; but with adequate institutional reform, the Basic Law could permit the very same delegation of power tomorrow. The critical move in Lisbon is the Court’s assertion of a deeper, absolute limit to integration.  The Court asserts that the German Federal Parliament must always retain “functions and powers of substantial import” as a matter of constitutional principle—irrespective of the level of democracy at the European level.  Under no circumstances can integration proceed if it involves a transfer of competences to Europe that would strip Parliament of sufficiently “substantial” power, nor if it entails the transfer of overly open-ended powers with the potential to similarly deprive Parliament in the future.  This absolute limit is meant to protect the political existence of the German people as such, within the sovereign German State.  The decision makes clear for the first time that the ultimate sovereignty of the German State can never be completely subsumed into a European federal State—to do so would breach the principle of democracy, protected from even constitutional amendment under Article 79(3).  And indeed, for all its language echoing Maastricht on reviewing for democracy, the Court admits in an aside that its review of European legislation according to the principle of democracy-qua-participatory/voting-rights is only a secondary constraint—a conditional limitation which sets “limits to the transfer of sovereign powers…which do not already result from the inalienability of the constituent power and of state sovereignty.” (Lisbon, ¶247 (my emphasis)). To be clear: in the view of the FCC, as a matter of principle German authorities may not commit Germany to a federal state of Europe through normal constitutional amendment; as corollaries integration may not entail the delegation to European institutions of too many spheres of competence, overly broad and open-ended competences of any kind, and especially not the competence to decide upon the extent of their own competences (Kompetenz-Kompetenz).  (Lisbon, ¶233).