All Bark and No Bite: Notes on the Federal Constitutional Court's ‘Banana Decision’

• Date: 01 March 2001
• DOI: http://doi.org/10.1111/1468-0386.00120
• Published date: 01 March 2001
• Author: Christoph U. Schmid

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All Bark and No Bite: Notes on the Federal

Constitutional Court's `Banana Decision'

Christoph U. Schmid*

Abstract: The Federal Constitutional Court's banana decision of 7 June 2000 continues

the complex theme of national fundamental-rights control over Community law. Whereas

in the `Solange II' decision (BVerfGE 73, 339) the Federal Constitutional Court had

lowered its standard of review to the general guarantee of the constitutionally manda-

torily required minimum, the Maastricht judgment (BVerfGE 89, 155) had raised doubts

as to the continued validity of this case law. In the banana decision, which was based on

the submission of the EC banana market regulation by the Frankfurt-am-Main admin-

istrative court for constitutional review, the Federal Constitutional Court has now

con®rmed the `Solange II' decision and restrictively speci®ed the admissibility conditions

for constitutional review of Community law as follows. Constitutional complaints and

judicial applications for review of European legislation alleging fundamental-rights

infringements are inadmissible unless they show that the development of European law

including Court of Justice case law has since the `Solange II' decision generally fallen

below the mandatorily required fundamental-rights standard of the Basic Law in a

given ®eld. This would require a comprehensive comparison of European and national

fundamental-rights protection.

This paper criticises this formula as being logically problematic and scarcely compa-

tible with the Basic Law. Starting from the position that national constitutional courts

active even in European matters should be among the essential vertical `checks and

balances' in the European multi-level system, a practical alternative to the Federal

Constitutional Court's retreat is developed. This involves at the ®rst stage a submission

by the Federal Constitutional Court to the Court of Justice, something that in the banana

case might have taken up questions on the method of fundamental-rights review and the

internal Community eect of WTO dispute settlement decisions. Should national

constitutional identity not be upheld even by this, then at a second stage, as ultima

ratio taking recourse to general international law, the call is made for the decision of

constitutional con¯icts by an independent mediating body.

European Law Journal, Vol. 7, No. 1, March 2001, pp. 95±113.

#Blackwell Publishers Ltd. 2001, 108 Cowley Road, Oxford OX4 1JK, UK

and 350 Main Street, Malden, MA 02148, USA

* The author is Research Fellow at the European University Institute in Florence and Habilitation

Candidate at the University of Munich. The author wishes to thank Ian L. Fraser and Dr Miriam Aziz

for their help in producing the present English version. A former German version has been published in

Neue Zeitschrift fu

Èr Verwaltungsrecht, whose editors have kindly permitted the publication of a revised

English version.

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I Introduction

The now almost ten-year-old dispute about EC banana market regulation has

achieved the doubtful acclaim of being the `trade case of the decade'.

1

As to the

history, in the course of completion of the Internal Market, in 1993 the various

national import regimes were replaced by a regulation on the common organisation of

the market in bananas.

2

This was adopted by quali®ed majority against the votes of

The Netherlands, Belgium, and Germany, in democratically extremely questionable

circumstances.

3

It provided protection for the products, otherwise scarcely competitive

in quality or price, of the Community and the ex-colonies in the African, Caribbean

and Paci®c area (ACP States) associated under the Lome

ÂConventions, at the expense

of the so-called `dollar bananas' from Latin America with which Germany inter alia

was traditionally supplied. In addition, the market regulation provided for a restrictive

quota for dollar bananas above which high penalty duties would be due, rendering

further import economically unpro®table. Of this quota, moreover, 30% was taken

away through licences from traditional importers of dollar bananas and allotted to

market participants that had previously marketed EC and/or ACP bananas. As a

consequence, German importers had some 30% fewer dollar bananas available in 1993

than in the previous year.

4

Importers of EC and ACP bananas, however, could not or

would not use up their new share in the dollar-banana quota, but preferred to sell their

licences, at high pro®t. Conversely, importers of dollar bananas were unable to buy

enough EC or ACP bananas, which had already been assigned elsewhere on long-

term contracts. It is accordingly hardly surprising that this protectionist regime

was assessed by independent institutions as highly damaging to the international

economy.

5

Immediately after it came into force the new market regulation's validity in

European primary law, national constitutional law, GATT 1947 andÐafter it was

set up on 1 January 1995ÐWorld Trade Organization (WTO) law was challenged.

Following failure to secure an interim interdict

6

the Court of Justice, in a controversial

judgement

7

rendered on a complaint of nullity by Germany, ruled the import regime

European Law Journal Volume 7

96 #Blackwell Publishers Ltd. 2001

1

See Salas and Jackson, JIEL 3 (2000), 145, who give an instructive survey of the various review

procedures.

2

Council Regulation 404/93, OJ L47/1 1993.

3

Wessels,Das Bananendiktat, Campus Verlag, 1995, 62, reports that Denmark, originally against the

regulation, was threatened that States supporting it would in the event of a contrary vote block

decisions during the Danish presidency of the Council. It is further reported by Cassia and Saulnier,

Revue du Marche

ÂCommun 1998, 527 (531f., footnote 39), that the French side even made further

negotiations on completing the internal market dependent on adoption of the banana market regulation

the way they wanted.

4

Cf. Everling, CMLR 33 (1996), 401 (405).

5

Thus, independent studies by World Bank (cf. Borrell, EU Bananarama III, Policy Research Working

Paper No. 1386, 1994) come to the conclusion thatÐapart from the immense problems resulting for Latin-

American producer countries with economies largely dependent on banana exportsÐthe import restric-

tions cost the European consumer some $2.3 billion per year in arti®cially higher prices. However, only

some 300m of this bene®ted EC or ACP producers, while the overwhelming remainder ¯owed as

monopoly pro®ts into the pockets of European companies. Additionally, the regime was seen as massively

obstructing competition, promoting black-market practices, hindering the growth of the EC banana

market, discriminating against ecient producers, and removing incentives to increase productivity or cut

prices.

6

Case 280/93R, ECR [1993] 483.

7

Case 280/93, ECR [1994] 688; on this cf. Everling, CMLR 33 (1996), 401.