Public finance

The German Constitutional Court, following a complaint by two thousand German citizens, determined that, pending the final decision, the German President, Frank-Walter Steinmeier, could not promulgate the Own Resources Decision that allows the European Commission to issue bonds on the markets to finance the Recovery and Resilience Facility (RRF). The decision had already been approved by the Bundestag and the Bundesrat. The complainants argue that the way in which the RFF is financed violates the EU’s obligation to maintain a balanced budget and consider the planned issuance to be a "flagrant violation of the EU Treaty", namely of article 311 of the Treaty on the Functioning of the EU (TFEU). This is not the first time and probably will not be the last that the Bundesverfassungsgericht questions, and tests, the limits of European competences and the relationship between German and European constitutional sovereignties. It was so with the Solange judgments, in the decades of 1970 and 80; in examining the constitutionality of the law ratifying the Maastricht Treaty in 1992 and in the assessment of the law ratifying the Treaty of Lisbon in 2009; and last but not the least, last year, the Court questioned the European Central Bank’s secondary markets purchase programme for public sector assets, ultimately, drawing upon itself powers conferred by the Treaties exclusively on the Court of Justice of the EU, thus threatening the foundations of an integration legal order established over 70 years. Without the Own Resources Decision, which must be approved by all Member-States, the Commission will not be able to issue the bonds needed to finance the RRF. To avoid adding a serious economic crisis to the pandemic one, aggravated in Europe by the shortcomings of the European Commission’s management of the vaccines purchase, the Bundesverfassungsgericht should provide an urgent response. In a way, the German Constitutional Court has built itself up, in European matters, as a defender of a strict constitutional nationalism, incompatible with Germany’s commitment to European integration. Once again, the long-term future of the European Union will be decided in the short-term response of the German Constitutional Court.