An Exercise in Legal Honesty: Rewriting the Court of Justice and the Bundesverfassungsgericht

• Published date: 01 July 2015
• Date: 01 July 2015
• DOI: http://doi.org/10.1111/eulj.12144
• Author: Michelle Everson

An Exercise in Legal Honesty: Rewriting

the Court of Justice and the

Bundesverfassungsgericht

Michelle Everson*

Abstract: This article contains an urgent plea for the re-establishment of legal honesty

in Europe. European law is a victim of European economic crisis. The emergence of the

concept of conditionality within national and European jurisprudence, or the judicial

imposition of a market discipline upon national budgets, is also a part of a chronicle

foretold given in the face of the volatile power of international finance markets. Yet, in

rewriting the judgements given by the Court of Justice in the case of Thomas Pringle and

by the German Constitutional Court in its matching jurisprudence on the European

Stability Mechanism, this article seeks to overcome the destruction of constitutionality

within Europe, the foreclosure of a European space for the politics of alternatives and the

condemning of individual Europeans to lasting suffering within a perpetual austerity

regime.

I The Economics of Judging

The 2014 Outright Monetary Transactions (OMT) judgement of the

Bundesverfassungsgericht, or the German Federal Constitutional Court (FCC), is

striking for many reasons.1Above all, for scholars of European law, the decision must

be viewed as only the last of very many gauntlets thrown down by the FCC before the

Court of Justice of the European Union (CJEU) during the protracted course of a

bad-tempered inter-jurisdictional dialogue, wherein the German Court has repeatedly

reasserted the sovereignty of its constitutional order against the supremacy of

European law.2For all that OMT resistance is cunningly disguised in a seemingly

* Professor of Law, Birkbeck College School, London, UK. This contribution forms a part of an ongoing

effort to identify a new basis for the legitimacy of European, conducted jointly and severally with

Christian Joerges, University of Bremen and Hertie School of Governance, Berlin. Differences do remain

in our theoretical positions, hence this individual essay. Nevertheless, the congruence between pluralist

and conflict of law approaches to the topic is also readily apparent. See, for example, M. Everson

and C. Joerges, ‘Who is the guardian for constitutionalism in Europe after the financial crisis?’, in

J.E. Fossum and A.J. Menéndez (eds.) Europe in crises or Europe as the crisis?, (ARENA, 2014),

pp. 369–386.

1BverfG, 2BvR 2728/13, of 14.01.2014 (para 1–105).

2A process famously beginning with the FCC’s ‘solange jurisprudence’ asserting its rights to uphold

the fundamental rights of the German constitutional order and reaching its peak in its Judgement on the

Maastricht Treaty (Brunner v. European Union Treaty, CMLR 57 [1994] 1).

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European Law Journal, Vol. 21, No. 4, July 2015, pp. 474–499.

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submissive preliminary reference to the CJEU, seasoned observers of FCC–CJEU

interaction will not be fooled. Asked whether the OMT Decision taken by the Council

of the European Central Bank (ECB) to purchase state bonds on secondary markets3

was an ultra-vires act, violating the inflationary and cross-subsidisation prohibitions

laid down by the European Treaty (Articles 119, 127 and 123 TFEU), and whether

contemporaneously the German Parliament (Bundestag) had failed in its constitu-

tional duty to challenge the OMT, the FCC deferred to the CJEU, but did so by

posing a question to the European Court, which contained its own pre-emptive

answer: should the CJEU not accord with the limitations to the reach of the OMT

Decision proposed by the FCC—above all, the requirement of ‘conditionality’ in

bond purchasing4—the constitutional justices will assert their own sovereign

competence to judge upon the compatibility of European law with the German

Constitution.5

For constitutional lawyers and legal theorists, OMT holds an even greater fascina-

tion. Taking detailed oral evidence from ECB specialists, the German Court ventured

far away from conventional constitutional methodology, burrowing deeply into

economic theory, taking note of the ‘bank-state-nexus’ linking private with sovereign

debt in an ‘incalculable’ host of market transactions (para 97), in its CJEU-

constraining conclusion that, absent OMT ‘conditionality’ designed to curb the

‘moral hazard’ (borrowing) of debtor EU Member States, the German Bundestag

would no longer be the ‘master of its decisions’ (para 102). The dependence of the

FCC upon a grammar of economics, in order to ensure that national parliamentarians

could not be frustrated in their constitutional duty to prevent unlimited German

liability for Eurozone financing, is nonetheless highly controversial, not least within

the Court itself. OMT is also a landmark decision within the constitutional history

of the Federal Republic. Accompanied not by one, but by two of the rarest of all

creatures within German juridical discourse, dissenting opinions, the judgement

contains its own trenchant self-critique, expressed most forcefully by Justice

Lübbe-Wolff:

Judicial competences do not (at least de jure) depend on the greater or lesser courage of the judges. But

where for reasons of law the judges’ courage must dwindle when it comes to the substance, they ought

not to go into the substance at all.6

For Justice Lübbe-Wolff, the FFC had committed its own ultra vires act. The

decision of the German Parliament not to challenge the OMT Decision before the

CJEU lay within its political discretion, and was the Bundestag’s alone. Engaging in

a substantive review of ‘manifest error’ within that omission, the Court had

3Within the ambit of the European Financial Stability Facility (EFSF) and the European Stability

Mechanism (ESM), each forming a part of the ersatz law created by the Union to address the sovereign

debt crisis within the Eurozone; see below Section III, n 24.

4In other words, bonds of debtor nations must not be purchased to ‘an unlimited amount’ (OMT

Judgement, note 1 above, para 100).

5First asserted in the Maastricht Judgement (n 2 above). As this article goes to press, academic commen-

tators will be puzzling on the question of whether AG Cruz Villalón, presenting his arguments to the

CJEU for the upcoming European OMT case (Case C-62/14), has or has not acceded to FCC demands

(14.0.1.2015), available at the curia website (http://www.curia.europa.eu/). The ruling of the ECJ itself

seems, however, less prone than its AG to build bridges with the structure and substance of OMT ruling

of the German Constitutional Court.

6Dissenting opinion of Justice Lübbe-Wolff, OMT Judgement, note 1 above, para 28.

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