Friday, September 9, 2011

More detailed analysis

Der Spiegel has an article that analyzes in greater detail the Karlsruhe decision. There is still no mention of those pesky Articles 122 and 125. Did they not rule on that? Also, it is hard to avoid the conclusion that this ruling may give the German parliament more power in theory but in practice it will be possible to circumvent it, thus infuriating yet more people, which is something politicians are rather good at doing.

Another article describes the scene at Karlsruhe.
Shortly thereafter, the fun came to a halt. Germany's highest judicial authority, the Federal Constitutional Court, issued its anxiously awaited ruling on the euro rescue package on Wednesday morning. Although their cases were rejected, the decision still represented a partial victory for Nölling and the remaining plaintiffs. The justices declared that the billions in guarantees for Greece and other highly indebted euro-zone countries were fundamentally constitutional, but they also demanded a greater say and participation in future bailouts by Germany's parliament, the Bundestag.
This, as many swiftly realized, might well mean that there will be preliminary agreements between the Bundestag and the government in order not to cause any trouble. However, there will always be the possibility that those agreements will not work and that possibility will become stronger with every new bail-out.

The Economist is pleased with the result - the euro is safe for the time being, more or less - but thinks Merkel loses in the court of public opinion.


  1. I had expected better but there is a long international history of 'interpreting' Constitutions. I am ignorant of German Law but reckoned that the Plaintiffs had a fairly unassailable case.
    On the other hand, I remember the 'independent' Bundesbank, the ultimate sacred cow, buckling to Kohl's political expediency at the Wiedervereinigung.

  2. The Bundesbank was never really independent. In the end governments control "independent" central banks. I rather think that the argument about the European constitution was stronger but that does not seem to have made an appearance. We need to wait and see whether the decision will be ignored or circumvented or whether it has teeth.