2015 – 004 Who is the Boss – The EU

Who’s the Boss?

By Andrew Stuttaford 

The German constitutional court has been pondering the extent that ‘Outright Monetary Transactions’ (a form of quantitative easing, talked about by the European Central Bank,  but never used) is compatible with EU law. I see some eyes glazing: Bear with me, this matters.
When it comes to deciding on EU law, the European Court of Justice is meant to be supreme. Germany’s Constitutional Court only decides on German law. There should, therefore, in theory be no conflict between the two courts, but, for obvious historical reasons, the German court is meant to take its role of having the last word on what is or is not constitutional in Germany very seriously indeed. For that reason, it has reserved for itself the right to intervene if changes within the EU can be said to be striking at the core of Germany’s constitutional identity (you can find much more on this—and the OMT case— here): That’s why it’s been looking at the OMT.
In any event, back in February, the German court opined (rightly in my view) that the OMT program was inconsistent with EU law. It decided, however, to refer the matter to the ECJ for its opinion, while reserving the right, if necessary, to take a different, final, decision for itself and thus for Germany.
Open Europe explains what has been announced today:

In an opinion released this morning, the ECJ’s Advocate General has said that theECB’s bond-buying scheme – the Outright Monetary Transactions (OMT) Programme – is “compatible in principle” with EU law, but laid out some conditions for its implementation.

The ECJ generally follows the opinion of the Advocate General
What has caught some observers’ attention is not the finding that the OMT is fine (the EU’s legal officials know what is expected of them) but the bluntness of the language used by the Advocate General.
The Daily Telegraph’s Ambrose Evans-Pritchard certainly noticed:

The European Court of Justice has declared legal supremacy over the sovereign state of Germany, and therefore of Britain, France, Denmark and Poland as well.
The ECJ’s advocate-general has not only brushed aside the careful findings of the German constitutional court on a matter of highest importance, he has gone so far as to claim that Germany is obliged to submit to the final decision. “We cannot possibly accept this and they know it,” said one German jurist close to the case.

The advocate-general knows he is risking a showdown but views this fight as unavoidable. “It seems to me an all but impossible task to preserve this Union, as we know it today, if it is to be made subject to an absolute reservation, ill-defined and virtually at the discretion of each of the Member States,” he said.
In this he is right. “This Union” – meaning the Union to which EU integrationists aspire – is currently blocked by the German court, the last safeguard of our nation states against encroachment. This is why the battle is historic.
“His opinion is a direct affront to the German court. It asserts that the EU court has the final say in defining and creating the EU’s own powers, without any national check,” said Gunnar Beck, a German legal theorist at the University of London.
“This would be a fundamental transformation of the EU from a treaty organisation, which depends on the democratic assent of the sovereign states, into a supranational entity.”

Well, welcome to the reality that has existed for a long time ago. When I studied EEC (EU) law at the end of the 1970s (yes, #old), the working assumption then was already that, where applicable, EU law prevailed over national law, and that (ultimately) EU courts would decide what that law was, and where its writ ran.
Riffing off an earlier judgment (in the case of Bulmer v Bollinger) that he had given as far back as 1974, Lord Denning, one of the most distinguished British judges of the last century, wrote this in 1990 for the euroskeptic Bruges Group:

Our sovereignty has been taken away by the European Court of Justice…Our courts must no longer enforce our national laws. They must enforce Community law…No longer is European law an incoming tide flowing up the estuaries of England. It is now like a tidal wave bringing down our sea walls and flowing inland over our fields and houses—to the dismay of all.

Of all? Not necessarily, but dismay was and is the right response.
We will have to see what happens next.   Those wanting to know more should read Evans-Pritchard’s article, in which he has set out the issues with his customary élan. Doubtless an effort will be made to save the German court’s face, but my guess is that it will, perhaps implicitly rather than explicitly, be forced to recognize that it is no longer the court that it claimed that it thought it was—and has not been so for decades.
And, if you want to understand why ‘renegotiating’ a new deal for Britain within the EU (as Mr Cameron says he wants to do) makes no more legal sense than it does political, then this case is not a bad place to start.
You are either in the steel trap or you are not. There is no halfway house.

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