Karlsruhe vs. Luxembourg: Resolving the clash of courts

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Following the row between the ECJ and Germany's Constitutional Court, Europe need to develop mechanisms to avoid a repeat of such conflicting judgements between top courts, argues Patrick Breyer. EPA-EFE/THORSTEN WAGNER

Following the row between the ECJ and Germany’s Constitutional Court, Europe need to develop mechanisms to avoid a repeat of such conflicting judgements between top courts, argues Patrick Breyer.

Patrick Breyer (Pirate Party) is a German Member of the European Parliament and its Legal affairs committee. He is a jurist and a former judge.

While the German Federal Constitutional Court has long reserved the power to reject EU actions that manifestly exceed EU competences or violate Germany’s constitutional identity, it was commonly thought that the Court was barking without biting. The ground-breaking judgement delivered on 5 May changed this. Although the ECB’s bond-buying programme had been ruled legal by the European Court of Justice, Germany’s Federal Constitutional Court set this decision aside for significantly exceeding EU competences on monetary policy and interfering with national competences on economic policy. It held that the ECB exceeded its powers by not assessing the effectiveness and collateral damage caused by the bond-buying programme. The Karlsruhe Court ordered the Bundesbank to end its participation in the ECB stimulus programme unless the ECB adopts a new decision demonstrating the proportionality of the programme within three months. In the absence of such an ECB decision, the Bundesbank would have to disregard either a Federal Constitutional Court judgement or its obligations according to EU law.

The ECJ reacted to the judgement by maintaining that it was the only institution authorised to rule that an EU institution violates the EU’s founding treaties. The EU Commission President Ursula von der Leyen stressed that rulings of the ECJ are binding on national courts and that the Commission was looking into opening infringement proceedings against Germany.

In my view escalating the conflict by opening infringement proceedings would not be wise for as long as the Bundesbank honours its obligations. An infringement procedure would result in yet another ECJ judgement in a matter where the Court has already delivered a decision; continuing this loop between courts would not help resolve the dispute. Putting the European Union up against the widely respected German Federal Constitutional Court would also play into the hands of nationalists and anti-EU-forces, thus harming the Union.

In the short term, what is needed to settle the dispute at hand is for the ECB to elaborate the proportionality its programme, including an assessment of its effectiveness and harmful economical side-effects. This is the kind of transparency we expect anyway when it comes to decisions with potentially far-reaching implications on public debt, personal savings, pension and retirement schemes, real estate prices etc. The ECB statute could be amended to require more transparency in its decisions, something that President Lagarde has promised anyway. Transparency requirements will not interfere with the ECB’s independence.

In the long term, we need to develop mechanisms to avoid a repeat of such conflicting judgements among top courts. While expanding EU competences in the area of economic policy by way of unanimous treaty change is an option to address the conflict at hand, ultra vires allegations may arise in other areas in the future as well. One option to address this problem generally without treaty changes would be the establishment of informal regular meetings of the presidents of the highest EU courts to allow for regular exchanges of views. The long overdue accession of the EU to the European Convention on Human Rights would allow for a human rights review of ECJ judgements, which appears necessary for extreme cases. Furthermore, creating a conciliation procedure between the ECJ and national courts, for example by setting up a joint body of courts, could also be considered. It may be possible to amend the ECJ statute to this effect without changing treaties if the settlements are based on unanimous agreement. On the other hand Germany may look into reserving such far-reaching ultra vires judgements to the Constitutional Court plenary consisting of all judges, especially as the Court’s two Senates appear to differ somewhat in their approaches.

Such reforms lower the risk of similar court clashes in the future to a degree that enables the ECB to exceptionally follow up to the May ruling without needing to fear frequent repeats of such cases in the future. While there is a certain risk in creating a precedent, it is necessary to take this risk to avert a constitutional crisis in the Union and to establish procedures to minimise this risk in the future.

The conflict at hand is also an opportunity to address widespread criticism about the Union being an elitist project ever seeking to expand its powers without asking its citizens. The Conference on the Future of Europe can be but the first step in a democratic, transparent and participatory process on shaping the European Union citizens want. I propose EU citizens elect a convent to develop a new foundation for the Union, and be given the right to decide on the implementation of its outcome by way of an EU-wide referendum. Entrusting citizens with shaping the future of the Union avoids the risk of its collapse in the long lasting conflict between integrationists and nationalists.

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