Karlsruhe: the German guard dog that barks, but does not bite. Consequences of the blockade of the German presidential firm

This horrid building is the seat of the German Constitutional Court, the current center of European power

Last week the German Constitutional Court, based in Karlsruhe in what is emphatically called the "Citadel of law", issued an order blocking the signature of President Altmaier at the Recovery Fund, the European common fund for development. which in Brussels is emphatically and emphatically called "Next generation EU". If they think of forming Europe with these four pennies, we are all already dead.

What will happen now? First of all, we note that the ruling of May 2020 which wanted to force the ECB to justify the purchases related to Draghi's QE literally fell empty: the ECB was careful not to justify anything. The BundesBank sent documents, but almost as a courtesy, but, in the end, the sentence fell on deaf ears. A new ruling on the similar but larger issue of the PEPP is now awaited. The result will likely be similar: however, the ECB will ignore its ruling.

Now he has blocked Altmaier at the push of an appeal requested by an association close to the AfD leader. However, Altmaier himself apparently had no intention of signing the agreement without a decision of the Constitutional Court, but the AfD would never have trusted a president who expressed the majority of Merkel.

Well what will happen now with these two pending sentences?

A) the ruling on the legitimacy of the PEPP. Given that its provision should be read, we are pretty sure that the ECB would ignore it nicely, while the Bundesbank would only respect it on the face. At this point, in theory, the court could appoint a Commissioner to Acta to fulfill its sentence, but it is a very, very, very distant probability;

B) if the sentence on the Recovery Fund were that of his rejection we would have two results:

• Everything would have to go back to Brussels for a new discussion, and this would be the death of the plan itself, because it would postpone its implementation excessively. The political repercussions would be devastating on Southern Europe whose governments have presented the Recovery as the necessary bailout, even if we know that it is a superficial intervention;
• from an operational point of view, however, it would change little. Probably the ECB should further expand its intervention, perhaps taking it from 1850 to 2350 billion and approaching US intervention. States would take the space of recovery by tweaking their interventions minimally. In the end, the Recovery accounted for 0.64% of the European GDP.

The setback would not be economic, but political. The uselessness of Brussels and the division between European countries would be tangible and for all to see. We would have a push for renewal and to put aside those parties that have expressed the Von Der Leyen Commission, an expression of the deepest failure of the Union. Perhaps a movement of European renewal could be born, perhaps we would simply witness the political implosion of the Commission and the CDU, of which it is the expression.

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The article Karlsruhe: the German watchdog that barks, but does not bite. Consequences of the blockade of the German presidential firm comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/karlsruhe-il-cane-da-guardia-tedesco-che-abbaia-ma-non-morde-cinseguenze-del-blocco-della-firm-presidenziale-tedesca/ on Sun, 28 Mar 2021 08:30:19 +0000.