Thursday

29th Sep 2016

Fiscal compact, bailout fund challenged in German court

  • Supporting documents for the complaints lodged on behalf of 12,000 Germans (Photo: Mehr Demokratie)

Six constitutional complaints were lodged in Germany over the weekend against the treaty on fiscal discipline and the establishment of a permanent eurozone bailout fund. The plaintiffs cite a lack of democratic oversight and a denting of budgetary powers.

Barely had the German parliament approved the two pieces of legislation late Friday evening (29 June), when centre-right and leftist lawmakers, as well as a democracy group filed their promised constitutional challenges.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The group “More Democracy” represented by former justice minister Herta Daubler-Gmelin lodged its complaint with the Karlsruhe-based court on behalf of 12,000 people who signed an online petition. In a video they explain that the permanent bailout fund - the European Stability Mechanism (ESM) - will be a sort of super-bank eluding any democratic or judicial controls. Rules enshrined in the fiscal compact - a Berlin-driven project - will in its turn undermine the sovereignty of the parliament in budgetary matters, they say.

Peter Gauweiler, a lawmaker from the Bavarian Christian Social Union, the sister party of Chancellor Angela Merkel’s Christian Democratic Union, also filed a petition with the court. Gauweiler argues that the ESM breaches the no-bailout clause included in EU's treaties, ruling out any direct aid to struggling states.

But that rule has already been circumvented by the temporary bailout fund, the European Financial Stability Facility. The Karlsruhe-based court has already ruled that bailouts are allowed as long as the German parliament approves each one of them.

A fourth complaint comes from a group formed around law professor Karl Albrecht Schachtschneider, a long-standing euro-critic who also challenged the introduction of the single currency.

Two more complaints come from German citizens whose names are not mentioned, Markische Allgemeine newspaper reports.

The court is expected to rule within a few weeks. German President Joachim Gauck has already indicated he will not sign the two bills into law pending the Karlsruhe verdict.

The ESM was supposed to come into force on 9 July. A meeting of eurozone finance ministers that day is expected to approve a Spanish bailout of up to €100 billion, as well as a full bailout for Cyprus.

Both are likely to be funded out of the EFSF, which has €250 billion left until the ESM comes into being.

Finland calls for 'pragmatic' EU defence

Finland’s plan for EU defence integration, presented to ministers today, goes less far than Italian or French “visions”, while quietly designating Russia as a threat.

Stakeholders' Highlights

  1. EJCMourns the Passing of Israeli Statesman Shimon Peres
  2. World VisionNew Tool Measuring Government Efforts to Protect Children Released
  3. GoogleDid You Know Europe's Largest Dinosaur Gallery Is in Brussels? Check It Out Now
  4. IPHRHuman Rights in Uzbekistan After Karimov - Joint Statement
  5. CISPECloud Infrastructure Providers Unveil Data Protection Code of Conduct
  6. EFAMessages of Hope From the Basque Country and Galicia
  7. Access NowDigital Rights Heroes and Villains. See Who Protects Your Rights, Who Wants to Take Them Away
  8. Martens CentreQuo Vadis Georgia? What to Expect From the Parliamentary Elections. Debate on 29 September
  9. EJCAppalled by Recommendation to Remove Hamas From EU Terrorism Watch List
  10. GoogleBringing Education to Refugees in Lebanon With the Clooney Foundation for Justice
  11. HuaweiAn Industry-leading ICT Solution Provider and Building a Better World
  12. Belgrade Security ForumCan Democracy Survive Global Disorder?

Latest News

  1. EU commission presents 'realistic' lobbying rules
  2. Evidence mounts of Russia's role in MH17
  3. New EU rules on financial products in limbo
  4. Turkey denies protection to returning Syrians
  5. Budget commissioner Georgieva leaves for UN campaign
  6. Ambition meets reality in EU tax leaks probe
  7. No support for EU army in ministers' talks
  8. Greek MPs approve water and electricity privatisation