All eyes to turn to Karlsruhe on 10 July

German Constitutional Court.jpg

On 10 July, the eyes of Europe will be on Karlsruhe, where Germany’s Constitutional Court is located. Judges will examine appeals brought against the European Stability Mechanism (ESM), the main European bailout fund, and the fiscal pact. EURACTIV Germany reports.

During a public hearing, the Constitutional Court will decide whether the German president has the right to finalise the ratification of the new institution by signing documents approved by the Parliament.

The court will not make a decision on the more complex question of the constitutionality of the documents, which will be discussed at a later date. Also, the Karlsruhe judges will examine the consequences of bringing the ESM and fiscal pact into being, which cannot occur until Germany has given its full consent.

Germany would provide €23 billion of the €80 billion ESM fund. Within five years a total capacity of €700 billion will be created from which 500 billion may be given as credit.

President Joachim Gauck announced on 21 June that he would await the court decision on the treaties’ compatibility with German law before putting pen to paper.

Meanwhile the German Parliament approved the ESM and fiscal pact on 29 June after a round of voting, which saw the bill receive a majority of two-thirds.

But the prospect of new treaties has been met with opposition, with the far-left parliamentary group “Die Linke” and more than 12,000 German citizens signing an appeal against its ratification, which they fear could affect their national sovereignty.

In their view the ESM represents a step towards a sort of European federal state that would deprive the parliament (Bundestag) of budgetary powers.

This “change in the nature of the State” would require reforms to the German constitution, said the association ‘More democracy’, in a complaint filed immediately after last week’s vote in Parliament.

Civil society representatives are also claiming that a referendum would be required before any strengthening of integration in Europe.

“If we transfer more powers to the EU, we will vote for a Bundestag which has less and less of a say. This loss of democracy cannot be offset at European level. Neither MP’s nor citizens exercise great influence. Such an important decision can only be taken by the people themselves,” said German constitutional lawyer Christoph Degenhart, a few hours before he filed a complaint against ESM on behalf of the group ‘More Democracy’ on 2 July.

But the German Government appears confident that the ESM ratification would pass.

“In the past, the Constitutional Court has set limits to various legislation [at EU level], but it has never challenged them as such,” said Justice Minister Sabine Leutheusser-Schnarrenberger (from the FDP junior coalition parner).

In September 2011, the German Constitutional Court approved the first bailout plan for Greece and the European Financial Stability Facility (EFSF), the ESM predecessor.

ESM was expected to be ratified by 1 July, as soon as eurozone member states representing 90% of its capital have ratified it. Germany, the Netherlands, Italy, Ireland, Austria, Luxembourg and Malta have not ratified ESM so far.

German public opinion has been broadly hostile to bailing out troubled eurozone countries and opposed to raising the firepower of the bloc's permanent rescue fund, the European Stability Mechanism (ESM).

Germany is the biggest contributor to the ESM, which is funded by taxpayers' money.

In exchange for Germany's solidarity with troubled eurozone member states, German Chancellor Angela Merkel has insisted on a new European treaty to tighten fiscal discipline in the eurozone and deepen economic integration as a way to address the bloc's sovereign debt crisis.

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