THE GERMAN CONSTITUTIONAL COURT

Constitutional judges take themselves seriously. Governments may come and go, but the judges (or, at least, their decisions) do not bend to the political winds. Many of them (eg those of the U.S. Supreme Court) are appointed for life, and literally die in office.

The German Constitutional Court, based in Karlsruhe, is of this ilk. Germany's post-war society (and, many would say, its economic success) is founded on its Grundgesetz or Basic Law, and the court is its diligent guardian. In no area is this demonstrated more clearly than in Germany's dealings with the E.U., of which Germany is a founder member and the main locomotive. The European Court of Justice has always claimed that E.U. law takes precedence over national law (not least on the grounds that anything less would lead to possible inconsistencies across Member States), but this can give problems for national constitutional courts. In its famous "Solange" (as long as) decisions, the GCC accepted the primacy of E.U. law only "as long as" the E.U. upheld the fundamental principles enshrined in the Basic Law. A cop-out, fumed Eurosceptics; a nuanced judgment, that took account of political realities, in the view of Europhiles.   

The GCC had recently been asked to rule on another crucial E.U. issue, namely whether the bail-outs of Euro-zone countries are legal (in German terms). Yesterday, the judges gave their answer. Yes, they are; but only if the Budget Committee of the German Bundestag gives its approval in advance, thereby preserving Parliament's right to control the spending of taxpayers' money. The positive decision was widely expected, but the Solange-type twist in the tail was not. Indeed, it may cause problems in practice. Financial bail-outs, almost by definition, have to be arranged in a hurry, often over a weekend before the markets open on Monday morning. If Chancellor Angela Merkel has to get a committee's approval on Friday evening before flying off to Brussels to bargain with her fellow Heads of Government, then Europe-wide financial policy may well end up hostage to the petty domestic considerations of one or two national legislators. Speedy decision-making could well go out the window. 

One way out of that dilemna would be to get on with integrating fiscal policy amongst Member States, so that the E.U. could issue Eurobonds backed jointly and severally by all Member States. Not surprisingly, some of the weaker members rather like that idea, but again not surprisingly, Germany (including Ms. Merkel) does not. However, that issue is unlikely to crop up in the near future, since the GCC also said that there could be no deal, which involved a pooling of national debts. This has been interpreted as ruling out such Eurobonds.

The E.U. has survived a major test of its proposed route out of the financial black hole it currently sits in. But there is still a long way to go. And the GCC will be peering over its shoulder as it moves forward.

Walter Blotscher