Federal Constitutional Court - Press office -
Press release no. 55/2011 of 7 September 2011
Judgment of 7 September 2011
2 BvR 987/10
2 BvR 1485/10
2 BvR 1099/10
Constitutional complaints lodged against aid measures for Greece and
against the euro rescue package unsuccessful – No violation of the
Bundestag’s budget autonomy
In today’s judgment, the Federal Constitutional Court has rejected as
unfounded three constitutional complaints which are directed against
German and European legal instruments and other measures in connection
with the aid to Greece and with the euro rescue package.
Press Release no. 37/2011 of 9 June 2011 informs about the facts of the
case. It is available (in German) on the Federal Constitutional Court’s
website.
The Second Senate of the Federal Constitutional Court has decided that
the Monetary Union Financial Stabilisation Act
(Währungsunion-Finanzstabilisierungsgesetz), which grants the
authorisation to provide aid to Greece, and the Act Concerning the
Giving of Guarantees in the Framework of a European Stabilisation
Mechanism (Gesetz zur Übernahme von Gewährleistungen im Rahmen eines
europäischen Stabilisierungsmechanismus), hereinafter: Euro
Stabilisation Mechanism Act (Euro-Stabilisierungsmechanismus-Gesetz),
which relates to the euro rescue package, do not violate the right to
elect the Bundestag under Article 38.1 of the Basic Law (Grundgesetz –
GG). By adopting these Acts, the German Bundestag did not impair in a
constitutionally impermissible manner its right to adopt the budget and
control its implementation by the government or the budget autonomy of
future Parliaments.
However, § 1.4 of the Euro Stabilisation Mechanism Act is only
compatible with the Basic Law if it is interpreted in conformity with
the constitution. The provision is to be interpreted to the effect that
the Federal Government is obliged to obtain prior approval by the Budget
Committee before giving guarantees within the meaning of the Act.
Furthermore, the Senate determines the boundaries under constitutional
law for authorisations to give guarantees for the benefit of other
states in the European monetary union.
In essence, the judgment is based on the following considerations:
I. Scope of review / admissibility
The Senate regards the constitutional complaints which have been lodged
as admissible only to the extent that the citizens, invoking their right
to elect the Bundestag, which is protected by Article 38 GG, challenge a
loss of substance of their power to rule, as it is organised in a
constitutional state, by a far-reaching, or even comprehensive, transfer
of duties and authorities of the Bundestag. Article 38.1 GG protects
competences of the present or of a future Bundestag from being
undermined, which would make the realisation of the citizens’ political
will legally or practically impossible. In principle, there is a threat
of the act of voting being devalued in such a way if authorisations to
give guarantees are granted in order to implement obligations which the
Federal Republic of Germany incurs under international agreements
concluded in order to maintain the liquidity of currency union member
states. The Senate was permitted to leave undecided under what
preconditions constitutional complaints lodged against a supplementation
of primary Union law by measures outside the Treaty structure may rely
on Article 38.1 sentence 1 GG. In this respect, the complainants have
not presented a concrete context which indicates a supplementation of
primary Union law by measures outside the Treaty structure that is due
to the impugned measures. Also with regard to a possible violation of
the fundamental right to property (Article 14 GG), the complainants have
not sufficiently presented facts from which it follows that the
challenged measures might result in objectively impairing the euro’s
purchasing power to a considerable extent. To the extent that the
constitutional complaints impugn not only the two pertinent Acts of the
German Bundestag, they are inadmissible because they lack a suitable
object of complaint.
II. Standard of review
Article 38 GG demands, in connection with the tenets of the principle of
democracy (Article 20.1 and 20.2, Article 79.3 GG), that the decision on
revenue and expenditure of the public sector remain in the hand of the
German Bundestag as a fundamental part of the ability of a
constitutional state to democratically shape itself. As elected
representatives of the people, the Members of Parliament must remain in
control of fundamental budget policy decisions in a system of
intergovernmental governance as well. When establishing mechanisms of
considerable financial importance which can lead to incalculable burdens
on the budget, the German Bundestag must therefore ensure that later on,
mandatory approval by the Bundestag is always obtained again. In this
context, the Bundestag, as the legislature, is also prohibited from
establishing permanent mechanisms under the law of international
agreements which result in an assumption of liability for other states’
voluntary decisions, especially if they have consequences whose impact
is difficult to calculate. Every larger scale aid measure of the
Federation taken in a spirit of solidarity and involving public
expenditure at international or European Union level must be
specifically approved by the Bundestag. Sufficient parliamentary
influence must also be ensured with regard to the manner in which the
funds that are made available are dealt with.
The Senate, which, with a view to the procedural setting of the
proceedings, was barred from reviewing the impugned Acts against
provisions of Union law, nevertheless points out that the existing
European Treaties are not contrary to an understanding of the national
budget autonomy as an essential, inalienable competence of the directly
democratically legitimised parliaments of the Member States but that
they, on the contrary, require the existence of such competence. Strict
observance of the European Treaties guarantees that the actions of the
institutions of the European Union have a sufficient democratic
legitimation in Germany and for Germany. In this context, the Senate
also points out that the conception under the Treaty of the currency
union as a stability-oriented community is the basis and the object of
the German Act approving the Treaty, as the Senate has already made
clear by its Maastricht ruling (Decisions of the Federal Constitutional
Court (Entscheidungen des Bundesverfassungsgerichts – BVerfGE) 89, 155
<205>).
III. Subsumption
When establishing a prohibited relinquishment of budget autonomy, the
Federal Constitutional Court cannot put itself in the place of the
legislature with an expertise of its own. With regard to the extent of
the assumption of guarantees, it has to restrict its review to evident
transgressions of ultimate boundaries. In this context, the legislature
has a margin of appreciation with regard to the probability of having to
make payments in a guarantee event, which the Federal Constitutional
Court has to respect. Something similar applies to the assessment of the
future sustainability of the federal budget and of the economic
performance of the Federal Republic of Germany. Taking this legislative
priority of appreciation into account, and measured against the
constitutional standards that have permissibly been applied, both the
Monetary Union Financial Stabilisation Act and the Euro Stabilisation
Mechanism Act prove to be compatible with the Basic Law. The Bundestag
did not deplete its right to adopt the budget and control its
implementation by the government and did not disregard the essential
content of the principle of democracy.
It cannot be established that the amount of the guarantees given exceeds
the limit of budget capacity to such an extent that budget autonomy
would virtually be rendered completely ineffective. The legislature’s
assessment that the authorisations to give guarantees to the amount of a
total of approximately EUR 170 billion are within the capacity of the
federal budget does not transgress its margin of appreciation and is
therefore constitutionally unobjectionable. The same applies to the
legislature’s expectation that even in the case of the complete
realisation of the guarantee risk it would still be possible to
refinance the losses through revenue increases, cuts in expenditure and
longer-term government bonds. At present, there is also no reason to
assume an irreversible process with consequences for the German
Bundestag’s budget autonomy.
The German Act Approving the Treaty of Maastricht in the version of the
Treaty of Lisbon still guarantees in a manner that is sufficiently
definite under constitutional law that the Federal Republic of Germany
is not subjecting itself to an incalculable automatism of a liability
community which follows a course of its own that can no longer be
steered.
Neither of the two impugned Acts establishes or consolidates an
automatism by which the Bundestag would relinquish its right to adopt
the budget and control its implementation by the government.
The Monetary Union Financial Stabilisation Act restricts the
authorisation to give guarantees with regard to their amount, it
indicates the objective of the guarantee, provides, to a certain extent,
for the payment modalities and makes certain agreements with Greece the
basis of the giving of guarantees. Thus, the content of the
authorisation to give guarantees is defined to a large extent.
The Euro Stabilisation Mechanism Act lays down not only the objective
and the fundamental modalities but also the amount of possible
guarantees. The giving of guarantees is only possible during a certain
period of time, and it is made contingent on agreeing an economic-policy
and finance-policy programme with the Member State affected. The
programme requires mutual agreement of the euro currency area states,
which secures a determining influence to the Federal Government.
However, § 1.4 sentence 1 of this Act merely obliges the Federal
Government to strive to reach an agreement with the Bundestag’s Budget
Committee before giving guarantees. This is not sufficient. Instead,
guaranteeing parliamentary budget autonomy requires an interpretation of
this provision in conformity with the constitution to the effect that
the Federal Government is in principle obliged to always obtain prior
approval by the Budget Committee before giving guarantees.
This press release is also available in the original german version.
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