What is rumored and whispered in Germany about the Recovery Plan
Will the German Constitutional Court decide on the European Recovery Fund? The in-depth analysis by Pierluigi Menniti from Berlin
There is now no European step that does not include the involvement of the German Constitutional Court, activated by the now tested magic circle of widowers in the good old days of austerity, when the German economy was growing despite the difficulties of other member countries. It had already happened, and several times, for German contributions to various bailout mechanisms during the financial crises of the 1910s and for the European Central Bank's bond purchase program (Mario Draghi's bazookas) during the Eurocrisis. Now it could also happen for the aid of the Recovery Fund.
This at least announces the usual fierce group of Eurocritics, once again ready to bring paperwork and attachments to the judges' tables in Karlsruhe, seat of the German High Court. In the forefront, inevitably, the vestals of German economic sovereignty. In the absence of AfD exponents, their ex, Berndt Lucke, none other than the founding economist of the party born on the wave of criticism of the single currency, thinks about it, before slipping into more radical positions. Lucke has announced that he will raise an unconstitutionality plea for the European aid package on behalf of the Bündnisses Bürgerwille (BBW) group, a sort of association of self-styled willing citizens, committed since 2012 to flooding the Karlsruhe offices with stamped papers in fear that monetary union will sooner or later turn into the specter of “Transfreunion”, the Union of transfers.
Of course, willing citizens are not the only ones to fear the pitfalls behind the European billionaire plan. Matthias Herdegen, a law professor and director of the Institute of Public Law at the University of Bonn, is also confident that the Recovery Fund will end up on the Karlsruhe judges' table. In his opinion, the European Union has gone beyond its own competences and there is "a double confusion of responsibilities on the side of revenue and expenditure": "The EU has no debt power", he told the Handelsblatt , and in fact the Brussels budget is fed from its own resources, mainly from contributions from the Member States. "The credits that now have to be taken out on the capital market are borrowed funds," Herdegen added.
The Bundestag intends to approve the ratification law for the decision on the EU's own funds this week. The majority groups (CDU-CSU and SPD) are observing very carefully the announcements of possible appeals to the Court but, underlines the Handelsblatt , the government considers the parliamentary passage to be "unproblematic" and is based on what was supported by the Chancellor and agreed with Brussels: the Recovery Fund constitutes a unique and limited support action, linked to a health emergency such as the pandemic, comparable to a natural catastrophe and necessary for the recovery of the whole of Europe through innovative reforms that will also benefit Germany itself .
Several times, faced with questions on the hypothesis that the European package, which for the first time also provides for the sharing of risks between member countries, could represent a first step towards a new European Union, the government of Berlin has always decisively denied , reiterating that it is a unique initiative. But some parties, above all the Greens who could join the next government after the vote on September 26th, think differently and have a more supportive vision of Europe in mind. The Minister of Finance himself, the Social Democrat Olaf Scholz, had in the past diverged from Merkel's interpretation, identifying in the Recovery Plan "the greatest novelty since the introduction of the euro".
This is why the Bonn professor does not give up: "The mutual assistance clause referred to in Article 122 of the EU Treaty is not a basis for allowing the Union to obtain money outside the budget". Furthermore, Herdegen criticizes the fact that Brussels intends not only to use the acute crisis fund, but also to finance policies for digitization and climate protection and of course the obligation of accountability for other states, "incompatible with the clause of no-bail-out, ie the sole responsibility of the Member States for their debts ".
These are criticisms that the vast majority of experts heard last Monday by the parliamentarians of the budget committee of the Bundestag do not agree, assures the business newspaper. They believe the Recovery Fund is economically necessary and also constitutionally armored. The Handelsblatt reports the point of view of Lucas Guttenberg, deputy director of the Jacques Delors Center in Berlin, for whom the plan "is a significant and necessary step in the face of the enormous economic upheavals caused by the pandemic".
As for the theses of those who intend to appeal to the Constitutional Court, Guttenberg believes that "the effect of the decision on own resources is in fact very limited", that the mechanisms that regulate the plan "contain no way out to perpetuate it over time", and finally that "the expected reimbursement through the EU budget also significantly limits the financial risk for individual Member States".
As for the German Recovery Fund, which continues to occupy very little space in the internal public debate, especially compared to what happens in the other member countries, Brussels and Berlin would have brought their positions closer, after in January the European Commission had also reprimanded the Germans by identifying in the their plan the lack of "that reform zeal required of other EU members": too many subsidies, too few reforms. The criticisms of European officials had centered on pensions, taxation and the regulation of professions. The requests for adjustments concerned the adoption of a wide range of measures to improve the pension system, the abolition of a tax measure, the division of income between spouses (Ehegattensplitting) which according to European technicians is a mechanism that discourages people from working longer. hours and the liberalization of some professions that are still too regulated, especially in the crafts sector and among architects.
Bulky matters, the Handelsblatt had judged them three months ago. Now the same Düsseldorf newspaper announces that the clash is in the process of being resolved, at least according to the Ministry of Finance, which has sent a specific report to the Bundestag. “The talks with the European Commission are about to end and the objectives and essential components of the German development and resilience plan are supported by the European Commission”, is the textual reassurance of the ministry led by Scholz. The Handelsblatt concludes by quoting an anonymous representative of the German government: "The European Commission reduced its demands and realized that it could not demand grandiose reforms from Germany during the election year." A statement that could, however, give breath to critics like Lucke and his appeals in Karlsruhe, once again holding the entire European Union in suspense.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/che-cosa-si-dice-e-si-bisbiglia-in-germania-sul-recovery-plan/ on Wed, 24 Mar 2021 09:08:20 +0000.