Bundestag prepares to scrutinise EU fiscal treaty

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As negotiations over the EU's new 'fiscal compact' begin in Brussels, German lawmakers in Berlin promise to make their voices heard. And the legal hurdles abound, according to Patrick Sensburg, a Christian Democrat (CDU) lawmaker who chairs the Bundestag's Subcommittee on European Law. EURACTIV Germany reports.

The fiscal compact treaty that emerged from the December EU summit is causing headaches for legal experts in the German Bundestag.

While the European Council's legal service gave its clearance to the agreement, many questions remain, said Sensburg, a lawmaker from Angela Merkel's Christian Democratic Union.

"The exact procedure depends on the progress of the discussions and the deal's content," Sensburg told EURACTIV Germany in an interview (see original German version).

"I assume that the fiscal compact will be ratified as an ordinary international treaty, not as EU law. I see a parallel to the Schengen Treaty," he said in reference to the international border-free agreement, initially signed in 1985 and which was subsequently integrated into the EU treaties in 1997.

What's important, Sensburg said, is that democratically elected institutions are associated with the treaty's drafting. "The Bundestag expects to be consulted early in the negotiation process," he stressed. "This means that the Parliament has to be briefed early and comprehensively. That is very important. The participation of the Bundestag in addressing the fiscal political pact represents its first test."

Legal issues

And according to the German legal expert, there are still questions over the treaty's legal soundness.

"There are actually European and international lawyers who say that this is not possible [to have an intergovernmental agreement] because EU law takes precedence. They argue that such a new treaty amounts to a conflict between EU law and international law."

As a consequence, he said "this separate agreement would not be binding" on its signatories because EU law would remain above the new treaty.

"If a state were to say, 'I do not consider myself in the fiscal political pact', then it would indeed violate the new international treaty, but it would be acting in accordance with European law."

Taking as an example the new qualified majority voting agreed under the international agreement, which is different from the EU treaties, he said: "If a signing party decides that it will not accept the new stability criteria anymore, you could not accuse it of violating EU law."

"The Court would have to consider the conflict with the EU treaties."

However, this is where the politics come in. At the end of the day, Sensburg believes it is the political commitment of the member states that will take precedence over legalistic considerations.

"Everything is fine as long as the signing parties keep their promises. But if a signing party decides that it does not accept the new stability criteria anymore, you could not accuse it of violating EU law. Nevertheless, this state would still be violating a commonly agreed consensus."

Using commonly-used EU legal jargon, Sensburg said judges would need to consider the spirit of the EU treaties in assessing any potential conflict with the new intergovernmental agreement.

"In my view, the new agreement is not inconsistent with the intent of the EU treaties, but enhances them."

An agreement to tighten fiscal discipline in the wider EU-27 proved impossible at the 8-9 December EU summit, after UK Prime Minister David Cameron made "unacceptable demands" to exempt London's financial district from financial market regulations.

Faced with a UK veto, EU leaders agreed that a new intergovernmental treaty should tighten fiscal discipline in the eurozone and address the bloc's debt problems.

The treaty will be drafted by March 2012 and opened to ratification by nations outside the 17-member eurozone.

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