Why the German Constitutional Court rejected the appeals against the Recovery Fund
In Germany, the Constitutional Court rejected the two appeals last July against participation in the European Recovery Fund. All the details in the article by Pierluigi Mennitti from Berlin
The German Constitutional Court puts an end to the hopes of what were once called hawks and validates the German participation in the Recovery Fund of the European Union . And while many countries are already grappling with the first delays in project schedules and with the desire to make changes due to the many changes that have occurred in the meantime, Germany was still entangled in appeals to the Karlsruhe Court which, in theory, would have could screw it all up. Or at least the German participation, numerically the most robust.
And instead the so-called "second Senate" has, as in the past, cemented the bridge between Berlin and Brussels, rejecting the two constitutional appeals selected last July (out of five presented). The first, supported by almost 2300 people, came from a "Bündnis Bürgerwille", a sort of civic committee gathered around the former founder of Alternative für Deutschland (Afd) Bernd Lucke, the liberal professor who had set up the party which later became sovereign on anti-single currency doctrinal foundations. The second was presented by the entrepreneur Heinrich Weiss, once head of the German Confindustria. Two old glories of politics and business for what has by now become a tradition in the relationship between Germany and the European Union: recourse to the Constitutional Court at each step of the transfer of sovereignty. It had happened with the various stability packages during the euro crisis, it also happened on the occasion of the 750 billion euro aid fund.
The ruling was clear, more than usual: according to the Court, the EU loan does not violate the Basic Law and the federal government and the Bundestag were allowed to approve the decision to borrow a total of 750 billion euros.
The reconstruction program called "Next Generation EU", aims to help the states of the Union get back on their feet after the pandemic. For the first time, the European Commission is taking on loans on a large scale. Member states will receive part of the money in the form of grants that will not have to be repaid, the rest as loans that will have to be paid off by the end of 2058 at the latest.
The largest sums have been earmarked for those countries particularly affected by the virus, such as Italy and Spain. Germany has had to deal with subsidies of almost 26 billion euros net. On the other hand, according to the Federal Court of Auditors, Germany is the largest net payer with an expected sum of around 65 billion euros. The same authority had spoken of a "caesura for the European financial architecture" and had warned of the risks for the federal budget.
And this is precisely where the plaintiffs came into play, who feared that the federal budget could suffer from liability for European debts and that, ultimately, Germany would be forced to foot the bill alone in case the other states no longer meet their payment obligations. For the plaintiffs there would be the threat of an incalculable debt maelstrom for decades. And they denounced that the program had no basis in the European treaties. The demands: Berlin had to withdraw from the program or block it altogether. The lawsuits filed were directed against the law by which the Bundestag had approved German participation.
Alongside the two selected appeals there were three others, including two with a more purely political implication: some Cdu MPs had conveyed their signatures to one, while another had matured in the Afd parliamentary group. The experts present at the July hearing, including a representative of the Federal Court of Auditors, had estimated a not excessive financial burden for Germany, an additional annual expense of three to four billion euros, and had suggested that such a figure would not it would certainly upset the federal budget. A representative of the European Commission had solemnly assured that the increase in debt would not become a habit, which must have reassured the scrupulous judges of the Court. Which therefore closed this judicial tail of the story.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/corte-costituzionale-germania-ricorsi-recovery-fund/ on Tue, 06 Dec 2022 10:44:21 +0000.