Yesterday, the European Commission launched an infringement procedure against Germany, accusing it of violating “the principle of the primacy of EU law” as a result of a 2020 ruling by the country’s constitutional court, granting it two months to reply.
In May 2020, the German constitutional court ruled that the ECB had overstepped its mandate with its bond purchases, despite the fact that the European Court of Justice had already authorised the ECB’s actions.
The Commission is taking action despite the fact that the German constitutional court had later ruled that the bond-buying could continue. According to the Commission, the initial ruling set “a dangerous precedent for [European] Union law, both for the practice of the German constitutional court itself, and for the supreme and constitutional courts and tribunals of other member states”, adding that “The German court deprived a judgment of the European court of justice of its legal effect in Germany, breaching the principle of the primacy of EU law.”
EU Commission to prepare an infringement procedure against Germany over the German Constitutional Court ruling challenging @ecb bond buying, which the EC thinks violates ECJ supremacy https://t.co/bO3f2hPUwy pic.twitter.com/H1jK13MTRz
— Pieter Cleppe (@pietercleppe) June 8, 2021
Ultimately, Germany could be convicted by the ECJ to pay considerable fines.
An interesting element in the German Constitutional Court’s 2020 ruling was that the ECJ had acted “ultra vires “(beyond its powers) by approving the bond-buying. This was followed by an ECJ response, whereby the court in Luxembourg stated that it “alone” had “jurisdiction to rule that an act of an EU institution is contrary to EU law”.
A “guerre des juges” did not ensue. The ECB simply produced the “proportionality assessment” the German top court had requested, claiming that its actions were proportionate and that there was nothing to worry about, a stance which was backed by the German government and the German central bank. This enabled the German top court to close the case – or it least that’s what everyone thought, until the Commission made its move yesterday.
Already since the 1990s, with its “Solange” ruling on the Maastricht Treaty, the German Constitutional Court has been barking, but it never bites.
Setting an example to Poland and Hungary
The real reason for the European Commission’s move is to set an example, to deter Poland and Hungary from challenging the supremacy of EU law. In 2017 and 2019, the ECJ already ruled that Poland had violated EU law by lowering the retirement age for judges, but the Polish government refuses to comply with the rulings.
In a new case whereby Poland was dragged before the ECJ in order to challenge new powers for its Justice Minister, the ECJ’s advocate general at the EU Court of Justice (ECJ), claimed that the fact the Polish justice minister had “unfettered, unreviewable, and non-transparent discretion” on jobs for judges was something that undermined judicial independence there.
The ECJ does not always follow the opinion of its advocate general, but it does so most of the time. A ruling typically follows a few months after the advocate general’s opinion. Judicial tensions between the EU and Poland are truly escalating, as earlier this year, an injunction by the ECJ ordering Poland to cease extraction activities at a brown coal mine near the Czech and German borders.
This may all come to a head with an upcoming ruling by the Polish Constitutional Court, which is currently deliberating whether Polish law or EU law has primacy in the country, in a ruling that could lead to even more discord with the EU. It’s noteworthy that the top judge is a former eurosceptic PiS MP, Krystyna Pawlowicz (picture), who has called the EU flag a “rag”. Its other judges would also be government loyalists.
Remind that there is another case regarding the constitutionality of EU law before the sham Constitutional Tribunal. A question of law from the unlawful Disciplinary Chamber is to be heard on 15 June 2021 (case P 7/20). https://t.co/SMNZEyCiZo https://t.co/3kdg8Yzhsv
— Rule of Law in Poland (@RULEOFLAWpl) June 10, 2021
Meanwhile, “article 7” rule of law procedures have also been initiated by the European Commission against Poland and Hungary. These do not run past the ECJ but are a matter for EU leaders, who are wary to do anything.
Judicial tensions are also ongoing with Hungary, as the ECJ is due to rule on the independence of the Hungarian judiciary, and with Romania. At the same time, Hungary and Poland have launched legal action at the ECJ themselves against the EU’s new “rule of law” mechanism, which is linking the disbursement of EU funds to the rule of law situation in EU countries.
As an indication of how serious this can all become, it’s important to recall that in January 2020, the ECJ’s president, Belgian EU law professor Koen Lenaerts (picture), issued an unusual public warning to Poland over its judicial reforms, stating: “You can’t be a member of the European Union if you don’t have independent, impartial courts operating in accordance with fair-trial rule, upholding Union law.”
An important motivation for the European Commission in going after Germany is to demonstrate that it is not employing double standards when things come to a heat with Poland and Hungary later on.
Challenging Germany’s Constitutional settlement will not go down well
In an extreme scenario, Germany may end up paying a fine to atone for the behaviour of its Constitutional Court, in the hopes that this would set a good example that could convince Hungary and Poland to respect EU law.
Such a move is however bound to anger German public opinion. Germany’s Constitution was written after the second world war and is meant to keep the government in check, not an unimportant endeavour, given the experience of the Nazi dictatorship. Also sound money is seen as an important ingredient in securing Germany returning to normality post-war – given how the Weimar hyperinflation and its fall-out helped to destabilise German society, paving the way for Hitler – as well as European integration, based on the idea that if there is intense trade and interdependence between Germany and neighbouring countries, this reduces the scope for tensions. EU action to reign in the German Constitutional Court for attempting to protect sound money is simply a toxic mix undermining all three elements of Germany’s post-war prosperity: sound money, judicial independence and support for European integration.
The EU has been fueling cronyism in Central and Eastern Europe
It is simply far-fetched to think that this would somehow reign in rule of law violations in Central and Eastern Europe. If there is one thing that the EU policy level can do about that, it is to no longer transfer vast resources to countries where cronyism is deeply troubling state institutions, something which fuels more cronyism. However, the contrary is happening.
Despite the realisation that something needs to be done to stop EU funds fueling Central and Eastern European cronyism, billions of euros which the European Commission is about to raise, in the context of the EU’s new “recovery fund”, are awaiting oligarchs and crony actors in EU member states with a more shaky track record of rule of law, and not just in Central and Eastern Europe.
ECJ judicial activism has undermined the ECJ’s credibility
On top of that, by having engaged in judicial activism for years, the European Court of Justice has lost some of its credibility to act as a neutral arbiter here. Already in 2008, former German President Roman Herzog wrote:
“Judicial decision-making in Europe is in deep trouble. The reason is to be found in the European Court of Justice (ECJ), whose justifications for depriving Member States of their very own fundamental competences and interfering heavily in their legal systems are becoming increasingly astonishing. In so doing, it has squandered away a large part of the trust it used to enjoy.”
The preamble of the EU Treaty instructs the ECJ to help realise “ever closer union”. It’s disputed what the actual legal significance of this is, but ECJ President Koen Lenaerts has himself admitted that the ECJ uses the preamble as a guide, while adding that vague text in EU Treaties has often been inserted “quite deliberately” when politicians cannot agree, so it is left to the ECJ to fill in the gaps when problems arise.
I have proposed the creation of an EU subsidiarity court, composed by the presidents of national constitutional court or appointees for countries lacking such a court, as one possible means to keep the ECJ in check. In practice, it would serve as a chamber of appeal to the rulings of the ECJ, whereby an appeal would only be permitted if it would relate to distribution of EU powers.
None of that will however do much to restore trust in the ECJ. As long as it continues to apply the the EU Treaty to the letter whenever this suits the agenda of ever greater transfers of powers to the EU, while simply rubber stamping monetary financing by the ECB, intra Eurozone transfers or – a likely upcoming ECJ ruling – joint borrowing, despite clear bans in EU Treaties on monetary financing, Eurozone transfers or EU debt, it should not be surprised to see certain EU member states using this as an argument to ignore its rulings.
