Federal Constitutional Court - Press office -
Press release no. 30/2010 of 8 May 2010
Order of 7 May 2010 – 2 BvR 987/10 –
Temporary injunction to prevent giving of guarantee
for loans to Greece is not issued
As a consequence of the difficult financial situation of Greece and the
resulting volatility in the financial markets, the Heads of State and
Government of the euro countries declared in March 2010 their
fundamental willingness to support Greece with their own bilateral
loans, in addition to financing by the International Monetary Fund
(IMF). The EU Commission subsequently negotiated, with the participation
of the European Central Bank (ECB), the details and conditions of an aid
package with the IMF and Greece. Greece was intended to be supported
only if support should actually prove necessary. The states
participating in the aid package were to decide about the payments then.
On 23 April 2010, Greece applied for financial aid of the states of the
euro group and the IMF. On 2 May 2010, the states of the euro group
decided to make available, in connection with a three-year IMF programme
with estimated total financing requirements of 110 billion euros, up to
80 billion euros as financial aid to Greece in the shape of coordinated
bilateral loans; up to 30 billion euros of the aid were to be provided
in the first year. The euro group’s financial aid is intended to be
provided in the context of a strict conditionality, which was negotiated
with Greece by the IMF and the European Commission, involving the ECB.
To take the measures required on the national level, the German
Bundestag adopted on 7 May 2010 a law on the giving of guarantees to
maintain the Hellenic Republic’s ability to pay which is required for
financial stability in the monetary union. This law authorised the
Federal Government to give guarantees to provide security for loans up
to a total amount of 22.4 billion euros for loans to the Hellenic
Republic. The law shall enter into force on the day after its
promulgation. Germany’s share of the aid measures is to be extended by
the Reconstruction Loan Corporation (Kreditanstalt für Wiederaufbau –
KfW).
On 7 May, the complainants lodged a constitutional complaint together
with an application to issue a temporary injunction. They essentially
apply for the Federal Republic of Germany to be prohibited from giving
financial aid to the Hellenic Republic to stabilise the European
currency area.
The Second Senate of the Federal Constitutional Court did not grant the
complainant’s application for the issuing of a temporary injunction. In
the weighing of consequences which is required for the issuing of a
temporary injunction, the Federal Constitutional Court employs a strict
standard. The result of the weighing which is required in this context
was that the general public would be under the threat of more serious
disadvantages if the temporary injunction were issued and the assumption
of the guarantees later proved permissible under constitutional law. In
this case, the Federal Republic of Germany would have to give up its
participation in the emergency measures intended to maintain the
Hellenic Republic’s ability to pay at the very point in time at which it
is required. This would not only disappoint expectations, nurtured by
previous conduct, which had been entertained by the partners in the euro
currency area. The urgency of the measure and the volume of the share in
the aid which would then be missing would above all call into question
the realisability of the entire relief package.
In the view of the Federal Government, this would probably create
serious economic disadvantages for the general public. Should the
objective pursued by the Currency Union Financial Stability Act be
missed, i.e. should it not be possible to prevent an imminent inability
to pay on the part of Greece, the stability of the entire European
Monetary Union would, in the view of the Federal Government, be
endangered. The Federal Constitutional Court has no sufficient
indications which would oblige it to assume that the Federal
Government’s currency-policy and financial-policy assessment is
erroneous. Among the constitutional bodies, it is above all for the
Federal Government to make such assessments, which the Federal
Constitutional Court can review only to a restricted extent.
In comparison, the disadvantages which ensue if the temporary injunction
is not issued but the agreed participation in the financial aid proves
impermissible later on carry less weight. The possibility of the
Federation being burdened if the loan is made use of, a possibility
whose probability of realising is regarded as minor, will not cause
substantial damage to the common good. In the Federal Government’s
assessment, the potential liability risk is compensated by a reduction
of the current risks for the Federal budget which might result from the
financial instability in the European Monetary Union. Damages to an
amount that is relevant to the national economy as a whole which are
thus avoided must be taken into account at least in an overall balance.
The complainants have not submitted any specific indications to
substantiate that in comparison, especially their right under Article 14
of the Basic Law could be directly impaired in a serious and
irreversible manner precisely as a consequence of the guaranteed grant
of a loan.
This press release is also available in the original german version.
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