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GERMAN LAW JOURNAL Review of Developments in German, European and International Jurisprudence Editor–in–Chief Russell A. Miller Senior Editors Betsy Baker; Jürgen Bast; Nina Boeger; Gralf-Peter Calliess; Matthias Casper; Patrycja Dabrowska; Jen Hendry; Elisa Hoven; Malcolm MacLaren; Stefan Magen; Ralf Michaels; Christoph Safferling; Emanuel Towfigh; Floris de Witte Associate Editors Matej Avbelj; Matthias Goldmann; Agnieszka Janczuk-Gorywoda; Jule Mulder; Anna Katharina von Oettingen; Emanuela Orlando; Niels Petersen; Karsten Schneider

www.germanlawjournal.com © Copyright 2000 – 2015 by German Law Journal GbR. All rights reserved. ISSN: 2071-8322 / ISSNL: 2071-8322

Vol. 16 No. 04

Pages 713-1072

01 September 2015

Table Of Contents

Articles Hermann Pünder More Government with the People: The Crisis of Representative Democracy and Options for Reform in Germany

713-740

Özlem Ülgen Strengthening European Union Democratic Accountability Through National and Treaty-Based Pre-Legislative Controls

TABLE OF CONTENTS PAGE I

741-780

Table Of Contents Articles [continued] Guilherme Vasconcelos Vilaça Why Teach Legal Theory Today?

781-820

Lawrence Donnelly Tamanaha and His Critics: Transatlantic Reflections on the “Crisis” in Legal Education

821-844

Kerstin Braun “I Don’t Take This Man to Be My Lawfully Wedded Husband”: Considering the Criminal Offense of “Forced Marriage” and Its Potential Impact on the Lives of Girls and Young Women with Migrant Backgrounds in Germany

845-870

Developments Markus Rübenstahl & Christian Brauns Trial and Error—A Critique of the New German Draft Code for a Genuine Corporate Criminal Liability

TABLE OF CONTENTS PAGE II

871-886

Table Of Contents Special Section The Constitutional Court’s Headscarf Case Matthias Mahlmann Religious Symbolism and the Resilience of Liberal Constitutionalism: On the Federal German Constitutional Court’s Second Head Scarf Decision

887-900

Johann Ruben Leiss One Court, Two Voices: Case Note on the First Senate’s Order on the Ban on Headscarves for Teachers from 27 January 2015: Case No. 1 BvR 471/10, 1 BvR 1181/10

901-916

Special Section The CJEU’s OMT Decision Monica Claes & Jan-Herman Reestman The Protection of National Constitutional Identity and the Limits of European Integration at the Occasion of the Gauweiler Case

917-970

Heiko Sauer Doubtful it Stood…: Competence and Power in European Monetary and Constitutional Law in the Aftermath of the CJEU’s OMT Judgment

TABLE OF CONTENTS PAGE III

971-1002

Table Of Contents

Special Section The CJEU’s OMT Decision [continued] Federico Fabbrini After the OMT Case: The Supremacy of EU Law as the Guarantee of the Equality of the Member States

1003-1024

Sven Simon Direct Cooperation Has Begun: Some Remarks on the Judgment of the ECJ on the OMT Decision of the ECB in Response to the German Federal Constitutional Court’s First Request for a Preliminary Ruling

1025-1048

Michael A. Wilkinson The Euro Is Irreversible! … Or is it?: On OMT, Austerity and the Threat of “Grexit”

TABLE OF CONTENTS PAGE IV

1049-1072

Articles More Government with the People: The Crisis of Representative Democracy and Options for Reform in Germany By Hermann Pünder*

Abstract Throughout the world, there is debate about how democratic systems should adapt to the demands of their increasingly emancipated citizenries. More than ever, people desire to take part in the creation of their life circumstances. The demand for participation is paired with a growing discontent with the political elites. This article looks at the challenges in the context of Germany’s system of government, discussing the leading debates of democratic reform in the EU’s largest member state with some incidental remarks on other countries. Specifically, the study analyzes two core components of representative democracy—the electoral process and the parliamentary decision-making procedure—and shows how they should be reformed to ensure political stability in the long run. As a measure for the analysis, the author develops a system of four preconditions, on which successful democratic government depends: Responsiveness and political leadership on the side of the elected representatives; preparedness for participation and acceptance on the part of the represented. The article shows that optimizing democracy on the basis of these pillars is not just advisable as a matter of political prudence. In fact, Germany’s constitution, the Basic Law, contains a normative expectation towards the political elites that they continuously improve democracy and ensure its appropriate functioning.

*

LL.M. (Iowa). Bucerius Law School, Hamburg, Chair of Public Law, Science of Public Administration and Comparative Law. Email: [email protected]. The author is very grateful especially to his former assistant Laurence O’Hara, LL.B. (Bucerius), M.P.P. (Harvard) for helpful comments on the paper.

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A. Crisis of Democracy: Risks and Opportunities Democratia est semper reformanda; democracy requires continuous reform. In Germany, as in other states with established democratic structures, many scholars are currently 1 discussing the crisis representative democracy faces. Colin Crouch says that we live in a 2 “post-democratic” era with democratic institutions only formally intact. Scholars throughout the world have voiced similar criticisms, ranging from Pippa Norris, who 3 mourns “democratic deficits” in our societies, to Benjamin Barber’s advocacy for a “strong 4 5 democracy” and to Chantal Mouffe demanding the “return of the political.” There is no cause to dramatize, though. Democracy as a form of government continues to enjoy widespread acceptance. In Germany, the approval rates almost reach ninety percent. But over half of those questioned in surveys express dissatisfaction with how our democracy 6 works in practice. Trust in the political process has declined to a shocking degree. Only fifteen percent are persuaded that their representatives seek to serve the interests of the 7 people. This figure compares to forty-two percent as recently as two decades ago. Equally depressing empirical findings about “disaffected democracies” are seen in other 8 countries. For all those who believe in democracy, the increasing public distrust—also 9 manifested in reduced participation in elections and shrinking membership in political

1

“Repräsentative Demokratie in der Krise” was the topic of the 2012 meeting of the Vereinigung der Deutschen Staatsrechtlehrer, the association of public law professors from Germany, Austria, and Switzerland. The following article is based on the author’s contribution to the discussion. See Wahlrecht und Parlamentsrecht als Gelingensbedingungen repräsentativer Demokratie, Veröffentlichungen der Vereinigung der Deutschen Staatsrechtslehrer, 72 VVDSTRL 191–267 (2012). 2

COLIN CROUCH, POST-DEMOCRACY (2004).

3

PIPPA NORRIS, DEMOCRATIC DEFICIT (2011).

4

BENJAMIN BARBER, STRONG DEMOCRACY: PARTICIPATORY POLITICS FOR A NEW AGE (1984).

5

CHANTAL MOUFFE, ON THE POLITICAL (2005).

6

Cf. Infratest dimap, ARD Deutschlandtrend, July 2010, 15 f; SOZIALWISSENSCHAFTLICHES FORSCHUNGSZENTRUM BERLINBRANDENBURG, SOZIALREPORT 98 (2010). 7

Renate Köcher, Umfrage des Allensbach-Instituts für die Frankfurter Allgemeine Zeitung, F.A.Z. (Oct. 20, 2010). See also Oscar. W. Gabriel & Lisa Schöllhammer, Warum die Deutschen ihren Abgeordneten nicht Mehr Vertrauen als dem Bundestag, ZPARL 414 (2009) (comparative perspective to the US). 8

DISAFFECTED DEMOCRACIES (Susan J. Pharr & Robert D. Putnam eds., 1987). See also RUSSELL J. DALTON, CITIZEN POLITICS 245, 263 (4th ed. 2006); NORRIS, supra note 3, at 57; and (focusing on Great Britain) Vidya Ram, Public Attitudes to Politics, Politicians and Parliament, 59 PARL. AFF. 187 (2006); Susanna Kalitowski, Parliament for the People?, 62 PARL. AFF. 350 (2009); Ruth Fox, Engagement and Participation: What the Public Want and How Our Politicians Need to Respond, 62 PARL. AFF. 673 (2009); and (examining Norway) Margit van Wessel, Political Disaffection: What We Can Learn from Asking the People, 63 PARL. AFF. 504 (2010). 9

See Malcolm Shaw, Overview: Parliamentary Democracy Today, 57 PARL. AFF. 708 (2004) (comparative persective). See also (focusing on Britain) Paul Whiteley et al., Turnout, 54 PARL. AFF. 775 (2001); Shelagh Diplock,

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parties —cannot be a matter of indifference. Ultimately, Politikverdrossenheit (disenchantment with politics) might even prompt citizens to question the democratic principles themselves. David Easton warns against a “spillover effect,” which threatens 11 public acceptance of decisions seen to conflict with personal interests and values. Indeed, in Germany as elsewhere, “angry citizens” have shown that democracy can never work 12 effectively without an underlying belief in its legitimacy. Wutbürger violently demonstrating against Stuttgart’s new central railway station (“Stuttgart 21”) have been a menetekel in my country, a bewildering “writing on the wall.” Against this background, the criticism of the current state of our democracy should be used as an opportunity and a source of energy. Above all, the representative elements of the democratic system need to be improved. This is not to deny that direct democracy is part of what Benjamin Barber has termed a “strong democracy.” Nearly seventy percent of the German population believes that important issues should be determined through 13 14 referenda. No political system, however, can function without representatives. Representation in parliaments is not merely the second best solution. Rather, it is the form of government that best serves a modern society with its increasing pluralism and 15 decreasing homogeneity. This article will analyze the German discussion on how to improve representative democracy on the basis of our “Basic Law,” the Grundgesetz (GG), Non-Voters, Political Disconnection and Parliamentary Democracy, 55 PARL. AFF. 715 (2002); and Peter Kellner, Britain’s Culture of Detachment, 57 PARL. AFF. 830 (2004) (giving other reasons for non-voting). 10

See Oscar W. Gabriel & Katja Neller, Bürger und Politik in Deutschland, in DEUTSCHLAND, ÖSTERREICH UND DIE SCHWEIZ IM NEUEN EUROPA 57, 93 (Oscar W. Gabriel & Fritz Plasser eds., 2010); NORRIS, supra note 3, at 57 (giving an international perspective); and (pertaining especially to Great Britain) Phil Parvin & Declan McHugh, Defending Representative Democracy, 58 PARL. AFF. 632 (2005); Ben Rogers, From Membership to Management? The Future of Political Parties as Democratic Organisations, 58 PARL. AFF. 600 (2005); Andrew Russell, Political Parties as Vehicles of Political Engagement, 58 PARL. AFF. 555 (2005). 11

David Easton, A Re-Assessment of the Concept of Political Support, 5 BRIT. J. POL. SCI. 435, 444 (1975).

12

See Gerhard Leibholz, Die Reform des Wahlrechts, 7 VVDSTRL 159, 160 (1932) (pertaining to the belief in legitimacy, “Glaube des Volkes an den Legitimitätsanspruch der repräsentativen Instanzen”); DAVID EASTON, A SYSTEMS ANALYSIS OF POLITICAL LIFE 278 (1965); NIKLAS LUHMANN, LEGITIMATION DURCH VERFAHREN 27 (2d ed. 1989). 13

See Oscar W. Gabriel & Norbert Kersting, Partizipation auf kommunaler Ebene, in PARTIZIPATION IM WANDEL 109 (Bertelsmann Stiftung & Staatsministerium Baden-Württemberg eds., 2014); KÖCHER, supra note 7; Sozialwissenschaftliches Forschungszentrum, supra note 6, at 102. 14

See ROBERT A. DAHL, ON DEMOCRACY 93 (1998) (acknowledging that the necessity of elites in complex societies has to be accepted even by those who ask for more participation in a “polyarchy”). 15

Cf. HERMANN HELLER, Politische Demokratie und soziale Homogenität, in GRUNDPROBLEME DER DEMOKRATIE 6 (Ulrich Matz ed., 1973) (originally 1928) (discussing the necessity of “social homogeneity” during the Weimar Republic). See also CARL SCHMITT, DIE GEISTESGESCHICHTLICHE LAGE DES HEUTIGEN PARLAMENTARISMUS 14 (2d ed. 1926) (“Zur Demokratie gehört also notwendig erstens Homogenität und zweitens—nötigenfalls—die Ausscheidung oder Vernichtung des Heterogenen.”).

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with some incidental remarks to other countries. The debate may provide food for thought outside Germany about how to cope there with the democratic crisis. B. Fundamental Pre-Requirements for Representative Democracy Before considering specific measures of reform, it is necessary to highlight some fundamentals. What are the conditions for a successful representative democracy? Traditionally, constitutional lawyers in Germany consider it sufficient that the exercise of public authority can be traced back to the electorate along a Legitimationskette (a chain of 16 legitimacy). But this conventional legal perspective, which sees citizens merely as voters, is too narrow. Successful democratic government depends on the complex interplay of more elaborate conditions. These conditions can be summarized as “responsiveness” and “political leadership” on the part of elected representatives, and “participation” and “acceptance” on the part of the represented. I. Responsiveness and Political Leadership by the Representatives Political scientists—mainly influenced by American scholars—generally agree that elected 17 representatives ought to be responsive to the wishes of the citizens. From the legal perspective, however, responsiveness as a requirement is far from taken for granted. A superficial reading of the Basic Law—as of other constitutions—could lead one to think that elections are sufficient. Parliamentary delegates are constitutionally granted a free 18 mandate; they are “responsible only to their own conscience.” Still, representative democracy is far more than a matter of such formalities. True government by the people requires some substantive guidance for those forming the public will. Attempts to provide such guidance by binding elected representatives to the Gemeinwohl will hardly prove 16

See, e.g., Bundesverfassungsgericht [BVerfG] [Federal Constutional Court] Feb. 15, 1978, 47 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVerfGE] 253 (275); 52 BVERFGE 95 (130); 68 BVERFGE 1 (88); 77 BVERFGE 1 (40); 83 BVERFGE 60 (72); 89 BVERFGE 155 (182); 93 BVERFGE 37 (66); Ernst-Wolfgang Böckenförde, Demokratie und Repräsentation, in STAAT, VERFASSUNG, DEMOKRATIE 379, 389 (1991); Eberhard Schmidt-Aßmann, Verwaltungslegitimation als Rechtsbegriff, AÖR 116, 239–355 (1991). 17

Cf. J. Renold Pennock, Responsiveness, Responsibility, and Majority Rule, 46 AM. POL. SCI. REV. 790 (1952); Heinz Eulau et al., The Role of the Representative, 53 AM. POL. SCI. REV. 742, 746 (1959); HANNA F. PITKIN, THE CONCEPT OF REPRESENTATION 209 (1967); ROBERT A. DAHL, POLYARCHY: PARTICIPATION AND OPPOSITION 1 (1971); Heinz Eulau & Paul D. Karps, The Puzzle of Representation: Specifying Components of Responsiveness, in THE POLITICS OF REPRESENTATION 55, 62 (Heinz Eulau & John C. Wahlke eds., 1978) (distinguishing between “policy responsiveness,” “service responsiveness,” “allocation responsiveness,” and “symbolic responsiveness”); Larry Diamond & Leonardo Morlino, The Quality of Democracy, 15 J. DEMOCRACY 20, 27 (2004). Meanwhile, even the German Bundesverfassungsgericht refers to the term. See, e.g., BVerfGE 131, 152 (205). For an empirical study with respect to the German Bundestag, relativating the accusation of not beeing responsive enough, see Frank Brettschneider, Abgehoben oder bürgernah? Die Responsivität des Deutschen Bundestages, in DER DEUTSCHE BUNDESTAG IM WANDEL 258, 264 (Heinrich Oberreuter et al. eds., 2001). 18

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW], May 23, 1949, art. 38(I)(2).

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sufficient, since the “common good”—in modern words, “output-legitimation” —is always subject to dispute in individual cases. Before we can say that “all state authority is derived from the people,” the wishes of those represented must be reflected more closely 20 in political decisions and the processes leading up to them. 21

We must also see as indispensable what political science refers to as political leadership. 22 Even promoters of an “active society,” like Amitai Etzioni, have to admit that absolute responsivity is not possible. The range of preferences is too contradictory, the problems are too complex, and the need for decisions—often intensified by time pressure—is too great. In addition, there is the necessity to take account of unarticulated interests for sound solutions to societal problems. Ultimately, elected politicians must personally make decisions as “trustees,” not only on behalf of their respective supporters and electorate, 23 but rather of the “entire people,” regardless of whether the decisions correspond to the 24 concerns of the electorate or not. Democracy is more than mere “demoscopy,” or democratic opinion polling. Edmund Burke long ago scathingly warned against mere “populism.” “Your representative,” he said, “owes you not his industry only, but his 25 judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.” How should political representatives resolve the challenging tension between responsiveness and political leadership? The traditional—rather paternalistic—German response is that they should strive for the well-being of the people as opposed to the 26 people’s will. The idea is, in the words of Ernst Fraenkel, that the “hypothetical will of the people” (hypothetischer Volkswille) in cases of doubt should prevail over the “empirical

19

See FRITZ W. SCHARPF, DEMOKRATIETHEORIE ZWISCHEN UTOPIE UND ANPASSUNG 21 (2d ed. 1975).

20

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 20(II).

21

Compare JAMES. M. BURNS, LEADERSHIP (1978), with JOSEPH. S. NYE, JR., THE POWERS TO LEAD (2008), Mark T. Fliegauf, Andreas Kießling, & Leonard Novy, Leader und Follower, ZPOL 399 (2008), and POLITICAL LEADERSHIP, (Annette Zimmer & Regina Jankowitsch eds., 2008); NANNERL O. KEOHANE, THINKING ABOUT LEADERSHIP 155 (2010), and BARBARA KELLERMAN, BAD LEADERSHIP: WHAT IT IS, HOW IT HAPPENS, WHY IT MATTERS (2008). 22

AMITAI ETZIONI, THE ACTIVE SOCIETY: A THEORY OF SOCIETAL AND POLITICAL PROCESSES (1968).

23

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 38(I)(1).

24

EULAU ET AL., supra note 17 at 746 (regarding the different “styles of representation”).

25

Edmund Burke, Speech to the Electors of Bristol, 3rd November 1774, in SELECT WORKS OF EDMUND BURKE (1999); see generally David Beetham, Political Participation, Mass Protest and Representative Democracy, 56 PARL. AFF. 597 (2003) (giving background). 26

See MARTIN GREIFFENHAGEN & SYLVIA GREIFFENHAGEN, EIN SCHWIERIGES VATERLAND—ZUR POLITISCHEN KULTUR IN DEUTSCHLAND 73 (1993).

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will” (empirischer Volkswille). From the standpoint of the public, however, the relationship between rule and exception is precisely the other way round. Reasoned justification is required if parliamentary delegates depart from express public wishes. As the American political scholar Hanna F. Pitkin puts it: “The representative system must . . . be responsive to public opinion, except insofar as non-responsiveness can be 28 justified in terms of the public interest.” This idea can also be found as a fundamental value within the German constitution. If all state authority is to be “derived from the 29 people,” the guiding principle must be: As much responsiveness as possible, as much political leadership as necessary. Departures from public demands have to be justified 30 through argument. II. Participation and—Albeit Critical—Acceptance by the Represented The success of democracy is not solely the responsibility of the elected representatives. The represented public must also make its contribution. What is needed is—following the concept of Gabriel Almond and Sidney Verba—a “civic culture,” a Bürgerkultur, characterized by a propensity of the citizens towards political participation on the one 31 hand and an—albeit critical—degree of acceptance on the other hand. Participation is more than a matter of merely taking part in elections. Contrary to what constitutional law implies on its surface, elections are only a necessary but not a sufficient condition for democracy. Joseph Schumpeter stated once that as soon as the citizens have elected someone, they have to concede that political activity is the delegate’s 32 responsibility rather than their own. This view can, of course, not satisfy contemporary needs. It brings to mind Jean-Jacques Rousseau’s famous sentence that “[t]he people of England regards itself as free; but it is grossly mistaken; it is free only during the election of 27

Ernst Fraenkel, Die Repräsentative und die Plebiszitäre Komponente im Demokratischen Verfassungsstaat, in DEUTSCHLAND UND DIE WESTLICHEN DEMOKRATIEN 165 (Ernst Fraenkel ed., 2011) (originally 1958). 28

PITKIN, supra note 17, at 224. See also DAHL, supra note 14, at 69 (arguing against a paternalistic “guardianship” in respect to the “common good”). 29

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 20(II).

30

See PITKIN, supra note 17, at 209 (“The representative must act in such a way that there is no conflict, or if it occurs an explanation is called for. He must not be found persistently at odds with the wishes of the represented without good reason in terms of their interest, without a good explanation of why their wishes are not in accord with their interests.”). 31

GABRIEL A. ALMOND & SYDNEY VERBA, THE CIVIC CULTURE 29 (1965) (giving the international comparative perspective, as well as explaining the mixture from “participant culture” and “parochial culture”). See also Russell. J. Dalton & Hans-Dieter Klingemann, Citizens and Political Behavior, in OXFORD HANDBOOK OF POLITICAL BEHAVIOR 6 (Russell J. Dalton & Hans-Dieter Klingemann eds., 2007). 32

See JOSEPH A. SCHUMPETER, KAPITALISMUS, SOZIALISMUS, UND DEMOKRATIE 468 (8th ed. 2005) (originally 1942).

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members of parliament. As soon as they are elected; slavery overtakes it.” To ensure that 34 “all state authority is derived from the people,” the citizens must also be able to exert influence on the parliamentary decision-making processes. This can be a matter of acting 35 individually, in concert with other citizens, or by means of intermediary institutions. In the first place, it is the task of political parties to respond to interests in society, to aggregate interests in practicable alternatives, and to bring them forward in the 36 parliamentary decision-making process. Parties have no monopoly in this, but rather 37 merely “participate in the formation of the political will of the people.” From the viewpoint of constitutional law, the citizen’s influence on parliamentary policy-making is guaranteed by fundamental rights of communication (Kommunikationsgrundrechte) like free speech, the right to assembly, and so on, which provide for an unrestricted debate within society. By noting that these guarantees are “fundamental for a free democratic state order” (“für die freiheitlich-demokratische Staatsordnung schlechthin konstituierend”), the German Federal Constitutional Court has repeatedly clarified that the 38 political role of the public reaches far beyond the casting of votes. 39

Participation requires sufficient information about—and interest in—the issues at hand. Casting one’s ballot—while being rather easy to accomplish—has hardly any specific 40 influence. Activity in political parties and interest groups is more effective, but at a higher 33

JEAN-JACQUES ROUSSEAU, DU CONTRAT SOCIAL OU PRINCIPES DU DROIT POLITIQUE, (1762) at Livre 3, Chapitre XV (“Des députés ou représentants ”“Le peuple anglais pense être libre; il se trompe fort, il ne l'est que durant l'élection des membres du parlement; sitôt qu'ils sont élus, il est esclave, il n'est rien. Dans les courts moments de sa liberté, l'usage qu'il en fait mérite bien qu'il la perde.”). 34

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 20(II).

35

See Ernst Fraenkel, Möglichkeiten und Grenzen Politischer Mitarbeit der Bürger in einer modernen Parlamentarischen Demokratie, in DEUTSCHLAND UND DIE WESTLICHEN DEMOKRATIEN 283 (Ernst Frankel ed., 2011). See also (for an international perspective) PAUL SNIDERMAN, A QUESTION OF LOYALTY 47 (1981); Dalton & Klingemann supra note 31; JOHN KEANE, THE LIFE AND DEATH OF DEMOCRACY 585 (2009); JAMES S. FISHKIN, WHEN PEOPLE SPEAK: DELIBERATIVE DEMOCRACY AND PUBLIC CONSULTATION 45 (2009). 36

Cf., e.g., 2 BVERFGE 1 (11 ff.); 20 BVERFGE 56 (101); 44 BVERFGE 125 (145 f.); 52 BVERFGE 63 (82); 60 BVERFGE 53 (61 f., 66 f.); 73 BVERFGE 40 (85); 85 BVERFGE 264 (284); 91 BVERFGE 262 (268 f.). See also Rogers, supra note 10, at 604 (focusing on Great Britain.) 37

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 21(I)(1).

38

See, e.g., 7 BVerfGE 198 (208); 20 BVerfGE 56 (97 f.); 20 BVerfGE 162 (174); 27 BVerfGE 71 (81); 62 BVerfGE 230 (247); 69 BVerfGE 315 (345); 71 BVerfGE 206 (219 f.); 76 BVerfGE 196 (208). 39

See SCHUMPETER supra note 32, at 416 (“So fällt der typische Bürger auf eine tiefere Stufe der gedanklichen Leistung, sobald er das politische Gebiet betritt. Er argumentiert und analysiert auf eine Art und Weise, die er innerhalb der Sphäre seiner wirklichen Interessen bereitwillig als infantil anerkennen würde. Er wird wieder zum Primitiven.”). 40

See LUHMANN, supra note 12, at 166 (stating that not participating at elections may be rational against this background).

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cost to the activist. It requires a greater degree of commitment, conflicting with other interests. From all sides of the political spectrum, complaints about the decline of traditional political engagement in political parties can be heard, but according to empirical studies, around two-thirds of German citizens would be willing to play an active role in 41 42 society. The social capital, to use Robert D. Putnam’s term, is still remarkable in Germany. The fact that this willingness to be engaged hardly ever involves contributing to the representative democratic processes should be understood as a wake-up call, requiring parliamentarians to strengthen their efforts to include the people in their decision-making. If representatives make decisions, which in the context of their task of political leadership depart from citizen preferences, then the propensity of the people towards acceptance becomes critical. Rather than blind obedience, a functioning democracy requires healthy skepticism on the part of the public. Citizens are the “principals.” They need to control 43 their “agents.” The people must effectively be able to express dissent. This is, in the words of Niklas Luhmann, necessary to secure the “general recognition” that is 44 independent of the “gratification derived from an individual decision,” and this depends above all on the perceived legitimacy of the underlying procedures. “Legitimation by 45 procedure” (Legitimation durch Verfahren) is decisive. Legitimacy is primarily a matter of selecting political representatives. The electoral process must be so structured that voters exert a significant and evenly distributed potential for influence on the composition of parliament. Beyond this, however, the form of parliamentary decision-making process is 46 important. The democratic process of deliberation may not be restricted to politicians, 41

See SOZIALWISSENSCHAFTLICHES FORSCHUNGSZENTRUM, supra note 6, at 104.

42

ROBERT D. PUTNAM, BOWLING ALONE: THE COLAPSE AND REVIVAL OF AMERICAN COMMUNITY (2000) (complaining about the loss of “social capital” in the U.S.). 43

SNIDERMAN, supra note 35, at 13 (giving an international perspective to a “balanced judgment”); KEANE supra note 35, at 85 (“monitory democracy”); Ralf Dahrendorf, Fundamentale und Liberale Demokratie, in FÜR EINE ERNEUERUNG DER DEMOKRATIE IN DER BUNDESREPUBLIK DEUTSCHLAND 31 (Ralf Dahrendorf ed., 1968) (describing the importance of “latent publicity“—latente Öffentlichkeit). 44

LUHMANN, supra note 12, at 30 (“Generelle Anerkennung, die unabhängig ist vom Befriedungswert der einzelnen Entscheidung”). See also EASTON, supra note 12, at 272−78 (explaining the necessity of “diffuse support” in contrast to the “specific support”). 45

See Hermann Pünder, Administrative Procedure: Mere Facilitator of Material Law Versus Cooperative Realization of Common Welfare, in DEBATES IN GERMAN PUB. L. 239, 247 (Hermann Pünder & Christian Waldhoff eds., 2014); Hermann Pünder, Democratic Legitimation of Delegated Legislation—A Comparative View on the American, British and German Law, 58 INT’L. & COMP. L.Q. 353, 369 (2009). 46

See, e.g., Joshua Cohen, Deliberation and Democratic Legitimacy, in PHILOSOPHY, POLITICS, DEMOCRACY 16, 21 (Joshua Cohen ed., 2009); James S. FISHKIN, DEMOCRACY AND DELIBERATION (1991); JÜRGEN HABERMAS, FAKTIZITÄT UND GELTUNG 349, 367 (1992); ANTHONY GIDDENS, BEYOND LEFT AND RIGHT: THE FUTURE OF RADICAL POLITICS (1994); cf. JOHN S. DRYZEK, DELIBERATIVE DEMOCRACY AND BEYOND (2000). Critically with John Parkinson, Legitimacy Problems in Deliberative Democracy, 51 POL. STUD. 180 (2003).

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but rather should involve the public equally and to the greatest possible extent in the free 47 and transparent opinion-forming process. The German Federal Constitutional Court once ruled that the constitution pictures the relationship between the citizens and the executive 48 branch of government as one of dialogue. Why should the same not apply to the polity’s relationship with its parliament? Furthermore, citizens will more likely accept controversial decisions when parliament ensures transparency. Parliament has to show that it functions in the sense of responsiveness. It has to make clear that what citizens think—and possibly has been communicated to the representatives—has been weighed in a fair way and that the 49 parliamentary majority cannot be exercised free from controls. Ultimately, parliamentary decisions must be reasoned and explained to the citizen. It is not enough to rely merely on pointing out that the “chain of legitimation” proceeds from elections. It is also insufficient if parliamentarians only refer to the fact that there are no alternatives. And that “hard power”—the sheer exercise of the coercive resources of the state authority—can only be 50 the last resort should be a matter of course in democratic societies. “Transformational 51 leadership” is necessary. III. Improvement of Democracy as a Constitutional Requirement Including perspectives of political science in the debate about constitutional law 52 traditionally faces reservation in German legal scholarship. The aforementioned requirements for the success of representative democracy, however, are not only a matter of political prudence. Constitutions provide norms only in the form of indispensable rules

47

Cf. 44 BVERFGE 125 (139); 89 BVERFGE 155 (185); 97 BVERFGE 350 (369); Vivien A. Schmidt, Democracy in Europe, PERSP. ON POL. 761, 768 (2005) (giving a European perspective on “government with the people”). 48

45 BVERFGE 297 (335) (“Die Notwendigkeit eines Gesprächs zwischen Verwaltung und Bürger entspricht dem grundgesetzlichen Verständnis der Stellung des Bürgers im Staat.”). See also Hermann Pünder, German Administrative Procedure in a Comparative Perspective: Observations on the Path to a Transnational ius commune proceduralis in Administrative Law, 11 INT’L J. CONS’T L. 940 (2013); Hermann Pünder, Administrative Procedure– Mere Facilitator of Material Law versus Cooperative Realization of Common Welfare, in DEBATES IN GERMAN PUB. L. 239 (Hermann Pünder & Christian Waldhoff eds., 2014); Hermann Pünder, Verwaltungsverfahren, in ALLGEMEINES VERWALTUNGSRECHT § 13, note 12 (Dirk Ehlers & Hermann Pünder eds., 15th ed. 2015) (describing the importance of procedure). 49

Cf. 40 BVERFGE 237 (249); 40 BVERFGE 296 (327); 70 BVERFGE 324 (355, 358); 84 BVERFGE 304 (329); 89 BVERFGE 155 (185); 97 BVERFGE 350 (369); 103 BVERFGE 44 (63); 130 BVERFGE 318 (344); 131 BVERFGE 152 (204 ff.). 50

NYE, supra note 21 (differentiating between “hard,” “soft,” and a mixture from both —“smart power”).

51

See BURNS, supra note 21.

52

See, e.g., SEBASTIAN UNGER, DAS VERFASSUNGSPRINZIP DER DEMOKRATIE 86, 247 (2008).

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for the democratic order. It is the constitutional task of the parliament and individuallyelected representatives to reach over and above these minimum constitutional standards, in such a way that public decisions enjoy the highest possible level of legitimation 54 (Legitimationsniveau). Over the last few decades, we have witnessed an obvious shift of values—a 55 Wertewandel—among the population. Past generations showed a significantly stronger tendency to dutifully accept unpopular decisions. In today’s society, citizens are less trusting. People desire more than ever to take part in the creation of their life circumstances. Against this background, it is important to enhance the influence of the citizen, not only on the composition of the representative political bodies, but also on parliamentary decision-making, to improve the transparency of political procedures. This would simultaneously strengthen the responsiveness of the elected representatives and ultimately contribute to the public being more ready to accept political leadership that conflicts with their own perceptions. This article will subsequently illustrate recommendations for concrete steps with a view on the federal level in Germany. C. Reforming the Electoral Process What can electoral law contribute to the success of representative democracy? For a long time, this question was hardly raised in Germany. Germans opted for the proportional representation in the Bundestag, the Federal Parliament. There are, however, some modifications. On the one hand, half of the parliamentary seats are awarded by majority vote in electoral districts. On the other hand, every party needs to pass a threshold of five percent of the overall votes in order to be awarded any seats at all. For decades, there was 56 broad satisfaction with this electoral system; it was even admired and praised abroad

53

See KONRAD HESSE, GRUNDZÜGE DES VERFASSUNGSRECHTS (20th ed. 1999) (stressing the notion of norms only as indispensible rules). 54

Questions of the appropriate “Legitimationsniveau” are discussed in Germany so far only in respect to the democratic legitimation of the administration but not in respect to the legislature. See, e.g., 83 BVERFGE 60 (72); 93 BVERFGE 37 (66 f.); 107 BVERFGE 59 (87); Ernst-Wolfgang Böckenförde, Demokratie als Verfassungsprinzip, in HANDBUCH DES STAATSRECHTS § 24, notes 16, 22 (Josef Isensee & Paul Kirchhof eds., 3d ed. 2004) 55

Compare RONALD INGLEHART, THE SILENT REVOLUTION (1977), GERD HEPP, WERTEWANDEL: POLITIKWISSENSCHAFTLICHE GRUNDFRAGEN (1994), Gabriel & Neller, supra note 10, at 79, 126, with DALTON, supra note 8, at 81 (giving an international perspective). 56

Hans-Dieter Klingemann & Bernhard Wessels, The Political Consequences of Germany’s Mixed-Member-System, in MIXED-MEMBER ELECTORAL SYSTEMS: THE BEST OF BOTH WORLDS? 279 (Matthew S. Shugart & Martin P. Wattenberg eds., 2001). See also CHOOSING AN ELECTORAL SYSTEM (Arend Lijphart & Bernard Grofman eds., 1984); Shaw, supra note 9, at 708; G. Bingham Powell, Election Laws and Representative Governments, BRIT. J. POL. SCI. 291 (2006) (giving an overview to the international debate).

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and was the role model, for example, for the election law in Scotland, Wales, and New 57 Zealand. In the meantime, critical voices may be heard in Germany. I. Introduction of a Majority Voting System? 58

Today, there are calls for a complete conversion to majority voting, similar to the system 59 in place in Great Britain. The fact that majority voting—at least generally—enables 60 effective political leadership through stable governments is an increasingly strong argument in Germany in the face of its increasingly fragmented spectrum of political parties. In addition, the unfortunate circumstance could be recognized that, despite previous coalition statements, with proportional voting, the electorate can never be sure which government they are voting for. The fact that small parties frequently have disproportionate leverage is particularly annoying to many in Germany. It may be expected that elected representatives under a majority voting system direct their “focus of 61 representation” less toward their party and more towards the citizens, since the voters 62 have a greater influence on their entry into parliament. Naturally, an argument against the majority voting system is the fact that this system—as 63 also increasingly criticized in Great Britain —disadvantages those citizens who wish to

57

See Jack Vowles, Introducing Proportional Representation: The New Zealand Experience, 53 PARL. AFF. 680 (2000); Thomas Carl Lundberg, Second-Class Representatives? Mixed-Member Proportional Representation in Britain, 59 PARL. AFF. 60 (2006). 58

See ECKHARD JESSE, WAHLRECHT ZWISCHEN KONTINUITÄT UND REFORM 91, 144, 169 (1985) (giving details of the debate). See also DER PARLAMENTARISCHE RAT: AKTEN UND PROTOKOLLE, (Deutscher Bundestag & Bundesarchiv eds., 1994) (discussion around drafting the Grundgesetz). 59

Compare for the old debate JOHN S. MILL, CONSIDERATIONS ON REPRESENTATIVE GOVERNMENT (1868) (promoting the proportional system), with WALTER BAGEHOT, THE ENGLISH CONSTITUTION (1867) (promoting the majority system). 60

Compare MAURICE DUVERGER, LES PARTIS POLITIQUES (1951), with Susanna Kalitowski, Hung-up over Nothing? The Impact of a Hung Parliament on British Politics, 61 PARL. AFF. 396 (2008). 61

Compare Eulau et al., supra note 17 (explaining the different “foci of orientation for the representative”), with Thomas D. Lancaster & W. David Patterson, Comparative Pork Barrel Politics: Perceptions from the West German Bundestag, 22 COMP. POL. STUD. 458 (1990). 62

Cf. 95 BVERFGE 335 (352). See also for an international comparative perspective Paul Mitchell, Voters and Their Representatives, 37 EUR. J. POL. RES. 335, 340 (2000) (referring to the Principal-Agent theory); Kathleen Bawn & Michael F. Thies, A Comparative Theory of Electoral Incentives, J. THEORETICAL POL. 5 (2003); Lundberg, supra note 57 (discussing the situation in Great Britain). 63

See D. Butler, Electoral Reform, 54 PARL. AFF. 734 (2004); POWER COMMISSION, POWER TO THE PEOPLE: AN INDEPENDENT INQUIRY INTO BRITAIN’S DEMOCRACY (2006); but see Charles Pattie & Ron Johnston, Power to the People Through “Real Power and True Elections?”, 60 PARL. AFF. 253, 268 (2007) (critical to the proposals); Lundberg, supra note 57, at 76 (reacting positively to the personalized proportional system in Wales and Scotland). See also Patrick Dunleavy & Helen Margetts, The Impact of UK Electoral Systems, 58 PARL. AFF. 854 (2005); Karen E. Cox & Leonard J.

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vote for smaller parties. Some think that this amounts in effect to a de facto minimum 64 requirement for entry into parliament of twenty or even forty percent in Germany. This is 65 the decisive objection from a constitutional viewpoint. Parliament should reflect the full 66 range of political currents, even if this renders political leadership more difficult. In any case, the change of system could hardly be achieved in Germany politically even through a grand coalition (Große Koalition) of the major parties. The traditional mass parties—the Christlich Demokratische Union (CDU) and the Sozialdemokratische Partei Deutschlands 67 (SPD)—are increasingly less attractive to the voters. Suspicion would be inescapable, as citizens would speculate that they sought to make themselves winners instead of losers. II. Reform of the Present Electoral System 1. Supplementing the Five Percent Minimum Requirement by a Supplementary Vote This is not to say that there is no room for improvement. There are increasing demands for the abolition, or at least reduction, of the five percent minimum requirement clause, to 68 increase public participation and parliamentary responsiveness. Courts have declared this 69 restriction to be unconstitutional for municipal elections. For the election of the EU Parliament, the Federal Constitutional Court recently decided that even a three percent 70 limitation clause was void. For the elections of the Bundestag and the parliaments on the State (Länder) level, however, the need for majorities, which are capable of providing effective and efficient political leadership, still justifies the restriction of “equal weighting” 71 of votes. Examples of new groups establishing themselves in parliament are shown by the Schoppa, Interaction Effects in Mixed-Member Electoral Systems—Theory and Evidence From Germany, Japan, and Italy, 35 COMP. POL. STUD. 1027, 1030 (2002) (giving the international perspective). 64

Günter Dürig, ZUR NEUGESTALTUNG DES BUNDESTAGSWAHLRECHTS 58 (Bundesministerium des Inneren ed., 1968); Rainer Bakker, Verfassungswidrigkeit des Mehrheitswahlrechts, ZRP 457, 459 (1994). 65

Cf. 1 BVERFGE 208 (246 f., 248–58); 6 BVERFGE 84 (90); B34 VERFGE 81 (100); 95 BVERFGE 335 (349, 352 ff., 370); 121 BVERFGE 266 (295 f., 297); 131 BVERFGE 316 (336 ff.) (showing electoral rule of equality). See also 129 BVERFGE 300 (349 f.) (Di Fabio, U., Mellinghoff, R., dissenting). 66

See AREND LIJPHART, PATTERNS OF DEMOCRACY 258, 275 (1999).

67

Oskar Niedermayer, Die Erosion der Volksparteien, ZFP 264 (2010).

68

See, e.g., Michael Antoni, Die Legende von Weimar, DUR 402 (1979); ERNST BECHT, DIE 5%-KLAUSEL IM WAHLRECHT 94 (1990). 69

See, e.g., 120 BVERFGE 82 (113 ff.).

70

135 BVERFGE 259. See also 129 BVERFGE 300 (discussing the five percent limitation clause in federal elections, with a dissenting opinion of the justices R. Mellinghoff and U. Di Fabio). 71

See 1 BVERFGE 208 (256 ff.); 4 BVERFGE 142 (143); 5 BVERFGE 77 (83); 6 BVERFGE 84; 82 BVERFGE 322 (338); 95 BVERFGE 335 (366); 95 BVERFGE 408 (419); 120 BVERFGE 82 (109 ff.).

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development of the ecologist party Die Grünen, the leftist party Die Linke, and recently, but only on the Länder (State) level, the Piratenpartei. Obviously, if the party chosen gains less than five percent of the total votes cast, citizens may think they have wasted their vote. This frustration can be counteracted, however. Citizen should be given a Nebenstimme (a supplementary vote) that is counted if the main 72 vote is unsuccessful because of the five percent restriction. The electorate could then initially vote for the party that most closely reflects their interests, without the worry that they may squander their potential to exert influence. This reform would improve the electoral chances of the smaller parties and thereby broaden the range of interest represented in the German parliament. Transferable votes are already common in many 73 countries with majority voting systems. 2. Personalizing the Party Lists, Official Announcement of “Protest Votes,” and Preliminary Elections That the German electorate has too narrow a choice in elections is another serious complaint. Some discussion exists concerning a “pretend participation“ and a “cosmetic 74 effect“ of the franchises. Some even compare the situation to the “quasi elections in the 75 German Democratic Republic.” In fact, there are always candidates entering parliament by means of the party lists who have stood for election in a constituency but were not 76 directly elected by the citizens. While this possibility should not be seen as a violation of 77 the constitutional guarantee of “direct” elections as required by Article 38(I) GG, the severe restrictive effects of the rigid party lists on voter influence must be taken seriously. At the same time, it has to be noted, though, that the fact that the parties create lists for

72

See, e.g., JESSE, supra note 58, at 258.

73

Australia, Malta, the Republic of Ireland and Iceland as well as on the local level in New Zealand and Scotland. In Great Britain the introduction of a supplementary vote failed via referendum. Critically Ken Ritchie & Allesandro Gardini Putting Paradoxes into Perspective—In Defense of the Alternative Vote, in ELECTORAL SYSTEMS: PARADOXES, ASSUMPTIONS, AND PROCEDURES 275 (Dan Felsenthal & Moshé Machover eds., 2012).. 74

See, e.g., Hans-Herbert von Arnim, Wahlgesetze: Entscheidungen des Parlaments in eigener Sache, JZ 813, 818 (2009). 75

Volker von Prittwitz, Vollständig personalisierte Verhältniswahl, APUZ 12, 16 (2003/52) (“Quasiwahlen, wie sie in der DDR üblich waren.”). 76

See Suzanne Schüttemeyer & Roland Sturm, Der Kandidat—das (fast) Unbekannte Wesen, ZPARL 539, 548 (2005); Philip Manow, Wiederwahlwahrscheinlichkeiten im System der personalisierten Verhältniswahl, ZPOL 147 (2008). 77

3 BVERFGE 45 (50 f.); 7 BVERFGE 63 (67 ff.); 21 BVERFGE 355; 47 BVERFGE 253 (283); 122 BVERFGE 304 (314); 90 BVERFGE 97. But see Hans-Herbert v. Arnim, Wählen wir unsere Abgeordneten unmittelbar?, JZ 578 (2002) (believing in such a constitutional violation).

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elections also has its advantages. On the one hand, the frequently criticized Ochsentour— the cumbersome yearlong party career, which candidates usually have to complete before being appointed—should not be underestimated as a preliminary qualification for the parliamentary mandate. On the other hand, parties gain the ability to ensure a balanced 78 representation by listing candidates from underrepresented social groups. A reform option would consist in opening the party lists to the voters. At the moment, in federal elections, citizens can basically only choose between party lists. It would be better if each voter had several votes that could be distributed between several candidates on 79 the list or be cumulated on one candidate. This reform would maintain the responsibility of the parties to nominate candidates, but at the same time strengthen voter influence on the composition of parliament. This would augment the responsive efforts of delegates towards the citizens, the independence of politicians from their parties, and the propensity for political leadership. Furthermore, the electorate should be able to express its dissatisfaction with the established parties, without having to deface its ballot papers, cast invalid ballot papers, opt for extremist parties, or even stay away from the polling station. This can be achieved through the official announcement of blank ballot papers—in France 80 these are termed “votes blancs”—or through separate “protest votes.” Parties’ nomination procedures can also improve. In Germany, party delegates regularly 81 nominate electoral candidates, not the party members directly. To increase the opportunities for participation—and also to facilitate citizens freshly entering into politics—the legislature should demand direct preliminary elections of the party 82 83 candidates (Vorwahlen). Following the example of closed primaries in the United States, 78

Mitchell, supra note 62.

79

Cf. the legislative proposal of Bündnis90/Die Grünen (BT-Drs. 11/5918) und the PDS (BT-Drs. 13/3523). The Enquete-Kommission Verfassungsreform BT-Drs. 7/5924, 17, favored for limited open lists. “Cummulation”, however, was rejected. 80

Micah L. Sifry, Give The People a Choice, THE NATION 221 (1990); OLIVIER DURAND, LE VOTE BLANC: POUR UN SUFFRAGE VRAIMENT UNIVERSEL (1999); Diplock, supra note 9, at 723; Adélaïde Zulfikarpasic, Le Vote Blanc—Abstention Civique ou Expression Politique?, 51 REVUE FRANÇAISE DE SCIENCE POLITIQUE 247 (2001). The Bundesverfassungsgericht has stressed that there is no constitutional right to a protest vote (NVwZ 2012, 161). 81

Bundeswahlgesetz [BWAHLG] [Federal Election Law] §§ 21(1) & 27(5) (stating political parties can decide whether they nominate the candidates by representatives or directly by all party members). 82

Compare the legislative proposal of the Federal Government coalition of the Sozialdemokratische Partei Deutschland and Bündnis 90/Die Grünen, BT-Drs. 14/3764. Critically Enquete-Kommission Verfassungsreform BTDrs. 7/5924, 15 ff.; James Hillson Cohen, Political Candidate Nominations—A Comparative Study of the Law of Primaries and German Party Candidate Nominating Procedures, 18 JÖR N.F. 491, 500 (1969); to the discussion in Great Britain, Rogers, supra note 10, at 607. 83

EBERHARD KÖLSCH, VORWAHLEN—ZUR KANDIDATENAUFSTELLUNG IN DEN USA (1972); Fritz Plasser, Vorwahlen und Vorwahlpraxis in den Vereinigten Staaten, in VORWAHLEN UND KANDIDATENNOMINIERUNG IM INTERNATIONALEN VERGLEICH 7, 13 (Heinrich Neisser & Fritz Plasser eds., 1992).

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parties in Germany should allow as sufficient a party registration instead of a formal party membership. Such a “party membership light” would be attractive for those citizens who wish to participate in nominating candidates, but—at least initially—have no interest in the further activities of the party. Preliminary elections would enhance the public’s knowledge, particularly about the constituency candidates. Unfortunately and astonishingly, these 84 candidates are often unfamiliar to the electorate up to now. Public “duels” would counteract this. To this extent, one should not be shy of “Americanizing” politics. Entirely open primaries should, however, be avoided in Germany as these would give the opponent 85 too great a scope for manipulation. 3. Extension of the Governmental Period, But No Bundling of the Election Dates The closer elections get, the more difficult politicians find it to exercise political leadership by making unpopular decisions. For this reason, scholars debate an extension of the 86 electoral period of the Bundestag from four years to five. Other countries—for example, Austria—have already implemented this reform. Restricting the citizen’s opportunities to participate in this way seems acceptable if other democratic reforms are implemented in return by extending opportunities for the people to participate in parliamentary 87 decision-making. Some scholars currently also consider combining the Länder elections with the federal parliamentary election or coordinating state elections, for example in the 88 middle of the federal election period. This would significantly relieve the burden; however, a legal obligation to bundle all electoral dates would contradict the constitutional law principle of federal state autonomy guaranteed above all by Articles 20(I) and 28(II) 89 GG.

84

See Christian Mackenrodt, Wie wichtig ist die Person?, ZPARL 69 (2008).

85

JENS BORCHERT, DIE PROFESSIONALISIERUNG DER POLITIK 216 (2003) (favoring open preliminaries); Andrea Römmele, Elitenrekrutierung und die Qualität politischer Führung, 51 ZFP 259, 266 (2004) (explaining the United States perspective). 86

This reform was realized in Austria in respect to the Nationalrat in 2007 (Art. 27 Abs. 1 B-VG). In the German Bundesländer, the electoral period is mostly five years. Against any reform in this respect, Enquete-Kommission Verfassungsreform BT-Drs. 7/5924, 38 (with a dissenting opinion by H. Lemke). 87

Supra Section D. II.

88

Klaus von Beyme, Zusammenlegung von Wahlterminen: Entlastung der Wähler—Entlastung der Politik?, ZPARL 339 (1992); Michael Sitsen, Anreiz für Bürger, Entlastung für Politiker? Zur Bündelung von Wahlterminen, ZPARL 602 (2007). 89

Against that Enquete-Kommission Verfassungsreform BT-Drs. 7/5924, 46.

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III. Extending the Franchise Finally, scholars in Germany debate whether the franchise should be extended to further groups of potential voters. Some call for a franchise at birth, a Wahlrecht von Geburt an, which—initially exercised by parents on a trustee basis—should ensure child-friendly 90 politics. This, however, would lead in effect to a multiple franchise of parents, which is legally impermissible in Germany even through a constitutional amendment, as it would 91 constitute a departure from the equal value of votes. To kindle interest in democracy among the young, it makes sense to reduce the voting age to sixteen, as has happened in 92 Austria. This would be a fruitful challenge for parliamentary candidates, parents, schools, 93 and other institutions. The eligibility to stand for election, however, should—as with 94 Austria —be limited to those who have reached the age of majority. This is because an appreciation of the political mandate of elected representatives—in particular the challenge of weighing between responsiveness and political leadership—requires a particularly high sense of responsibility. Apart from this, foreign citizens who have lived in Germany for several years, work there, and pay taxes should receive the franchise through 95 a facilitated path to citizenship. “No taxation without representation” holds today as it 96 did at the time of the American Revolution.

90

There have been several parliamentary initiatives in this direction. See BT-Drs. 15/1544; BT-Drs. 15/4788; BTDrs. 16/9868. 91

Franz Reimer, Nachhaltigkeit durch Wahlrecht?, ZPARL 322 (2004); Michael Rolfsen, Eine Stimme für die Zukunft?, DÖV 348 (2009). But see also BVERFG, NVWZ 69 (2002) (leaving this question open). 92

Nationalrats-Wahlordnung Austria [NRWO] [NATIONAL ELECTION RULES] BUNDESGESETZBLATT [BGBL] No. 471/1992 § 21(1) (introducing voting at 16). To the discussion in Great Britain, Pattie & Johnston, supra note 63, at 272. 93

Michael C. Hermann, Wahlkampf und Jugendliche, ZPARL 818 (2010).

94

See NRWO § 41(1).

95

The Bundesverfassungsgericht has stated that there is a legally necessary link between the notion of “the people” in GG art. 20(2) and the German citizenship; 83 BVERFGE 37 (50); 83 BVERFGE 60 (71); 107 BVERFGE 59 (87). As far as the Court sticks to that opinion (which is not beyond doubt), the only possibility is to ease the naturalization by a dual citizenship. See also DAHL, supra note 14, at 76 (describing an “inclusive” citizenship). 96

Compare Merrill Jensen, THE FOUNDING OF A NATION—A HISTORY OF THE AMERICAN REVOLUTION (1968) (describing that the assessment of the constitutional lawyers of that time that the American colonies were “virtually represented” in the House of Commons, was understandably rejected by the Americans), with Francine. J. Lipman, The Taxation of Undocumented Immigrants—Separate, Unequal, and Without Representation, 9 HARV. LATINO L. REV. (2006), 1, 4; and Erin E. Stefonick, The Alienability of Alien Suffrage: Taxation Without Representation in 2009, 10 FLA. COASTAL L. REV. 691 (2009) (applying “no taxation without representation” in respect to the immigrants of our days).

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D. Reforming the Parliamentary Decision-Making Process Elections are a necessary, but not a sufficient, condition for democracy. For this reason, this article will subsequently consider what parliamentary law can contribute to the success of representative democracy. I. Disclosure and Regulation of the Influence Exerted by Lobbyists The first step is to disclose and regulate the influence of lobbyists. In Germany, people 97 consider the silent power of those representing specific interests a danger for the democratic principle of equality, a restriction on the transparency of parliamentary decision-making, and a threat to the public acceptance of controversial decisions. Without question, representing interests—whether those of the common well-being or simply of private benefit—is part of democracy just as much as free elections and independent 98 media. Fair and pluralistic competition, however, requires that the representatives of specific interests work in a transparent way and have equal opportunities of access. Here, 99 we see—especially when compared with the U.S. —that there is an urgent need for reform in Germany.

97

DIE STILLE MACHT (Thomas Leif & Rudolf Speth, eds., 2003); DIE FÜNFTE GEWALT (Thomas Leif & Rudolf Speth, eds., 2006); Karsten Ronit & Volker Schneider, The Strange Case of Regulating Lobbying in Germany, 51 PARL. AFF. 559 (1998) (providing a comparative perspective on the negative connotation of the word “lobbying” in Germany). 98

See supra note 38 (concerning the fundamental rights of communication). Concerning the American constitutional law Andrew P. Thomas, Easing the Pressure on Pressure Groups—Toward a Constitutional Right to Lobby, 16 HARV. J. L. & PUB. POL’Y 149 (1993); S. A. Browne, The Constitutionality of Lobby Reform—Implicating Associational Privacy and the Right to Petition the Government, 4 WM. & MARY BILL RTS. J. 717 (1996); Stacie L. Fatka & Jason M. Levien, Protecting the Right to Petition: Why a Lobbying Contingency Fee Prohibition Violates the Constitution, 35 HARV. J. ON LEGIS. 559 (1998). 99

See Vincent R. Johnson, Regulating Lobbyists: Law Ethics, And Public Policy, 16 CORNELL J. L. & PUB. POL’Y 1 (2006); Anita Krishnakumar, Towards a Madisonian, Interest-Group-Based, Approach to Lobbying Regulation, 58 ALA. L. REV. 513 (2007); Angela Lynne Davis, Genuine Reform or Just Another Meager Attempt to Regulate Lobbyists—A Critique of the Honest Leadership and Open Government Act, 18 KAN. J.L. & PUB. POL’Y 340 (2008/09); Jarica B. Nipper, Lobbying the Lobbyists—A Comparative Analysis of the Lobbying Regulatory and Disclosure Models of the United States and European Union, 14 TULSA J. COMP. & INT’L. L. 339 (2007) (comparing the rules in Europe). See generally OPEN SECRETS—CENTER FOR RESPONSIVE POLITICS, available at www.opensecrets.org (providing transparency with the help of other public interest groups); Richard A. Smith, Interest Group Influence in the U.S. Congress, 20 LEGIS. STUD. Q. 89 (1995); Dorie Apollonio et al., Access and Lobbying—Looking Beyond the Corruption Paradigm, 36 HASTINGS CONST. L.Q. 13 (2009); RAJ CHARI ET AL, REGULATING LOBBYING—A GLOBAL COMPARISON (2010) (comparing the law in the US, Canada and in the EU and in some EU countries).

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1. Register of Lobbyists and Code of Conduct Parliament should establish a register of lobbyists and require that those involved disclose 100 the amount and origin of their financial and other resources. The addressees of lobbying activities have to know who is behind specific demands. Only in this way can politicians correctly estimate the importance of demands and find a balance between the 101 requirements of responsiveness and political leadership. German constitutional law expressly states that parliamentary delegates are “responsible only to their own 102 conscience.” Accordingly, they can decide freely with whom they come into contact in the exercise of their mandate. For this reason, accreditation has to be voluntary in 103 Germany, in contrast to what many propose from a political perspective. Rather than making it a legal obligation, accreditation should be supported by political incentives. Accredited lobbyists should be accorded prior rights in the exertion of influence on parliamentary decision-making. In contrast to actual practice, there should be a formal 104 restriction of consultations only to accredited lobbyists. Above all, accreditation should be linked to a legal claim to state opinions on proposed legislation and to the right that the competent parliamentary committee (Parlamentsausschuss) reacts substantively to the 105 stated opinions. This would be a useful tool to encourage lobbyists to register. The public discussion made possible in this way may also counterbalance the social inequalities that otherwise threaten to distort parliamentary responsiveness, especially those inequalities between capital and employee, the employed and the jobless, and the economy and the ecology. Furthermore, the Bundestag should create a code of conduct that applies to all representatives of interests—irrespective of whether they are accredited or not—and at the same time is a commitment entered into by the parliamentarians. All those involved in parliamentary decision-making must undertake an obligation towards transparency, truth,

100

See the legislative proposals of the Sozialdemokratische Partei Deutschlands, BT-Drs. 17/6442, 2, and Bündnis 90/Die Grünen, BT-Drs. 17/2486, 2. Incomplete and wrong information should result in the deprivation of privileges or in fines. Imprisonment sentences—like in the U.S.—seem not to be necessary. 101

See Scott Ainsworth, Regulating Lobbyists and Interest Group Influence, 55 J. POL. 41 (1993) (referencing “game theory”). 102

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 38 (1)(2).

103

See, e.g., the legislative proposal of the Sozialdemokratische Partei Deutschlands, BT-Drs. 17/6442. Like here the legislative proposal of Bündnis 90/Die Grünen, BT-Drs. 17/2486. 104

105

CHARI, supra note 99, at 61.

In the actual law there is no legal claim to participate in public hearings of the Bundestag (“öffentlichen Anhörungssitzungen”). See Nr. 4 of appendix 2 to the GESCHÄFTSORDNUNG DES DEUTSCHEN BUNDESTAGES [GO-BT] [RULES OF PROCEDURE OF THE GERMAN BUNDESTAG].

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fairness towards competitors, and the waiver of influence gained by financial or other 106 107 substantive material incentives. Criminality is a matter for public prosecution. 2. Transparency of the External Influence and of Committee Deliberations To secure public acceptance of controversial decisions, the external influence of interest representatives on individual decisions should be more transparent. Admittedly, 108 documenting each and every legislative footprint is impractical. To realize the constitutional requirement of transparency, however, parliament should lay down that all expressed external positions on legislative proposals should be centrally documented on 109 the website of the Bundestag. In addition, it should be required that legislative drafts of the ministries are published as soon as they are made available to specific interest groups involved in the decision-making process. Unfortunately—and bewilderingly—this is not 110 always the case in Germany up to now. More transparency is also needed in the parliamentary decision-making process itself. 111 While the German constitution requires that “sittings of the Bundestag shall be public,” parliamentary committees generally meet behind closed doors. This gives rise to public 112 mistrust because parliamentary decisions are de facto made in these committees. Cases exist where a privileged area free from public disclosure is necessary for the creation of opinions. Parliamentary procedure law, however, should require that this is not the rule, but an exception requiring a reasoned justification. Admittedly, this proposal goes against the present formalistic conventional view on German constitutional law, but it is in line with the leading constitutional principle of parliamentary publicity.

106

Similarly—but restricted to lobbyists—the legislative proposal of Bündnis 90/Die Grünen, BT-Drs. 17/2486, 5.

107

See the recently reformed STRAFGESETZBUCH [STGB] [PENAL CODE] §108 (e).

108

See ANDREAS KOLBE ET AL, MARKTORDNUNG FÜR LOBBYISTEN 57 (2011); Hans-Jörg Schmedes, Mehr Transparenz wagen? Zur Diskussion um ein gesetzliches Lobbyregister, ZPARL 543, 548 (2009). Against that Christian Lange, Lobbyistenregister in Deutschland?, RUP 198 (2011). 109

Cf. the legislative proposal of Bündnis 90/Die Grünen, BT-Drs. 17/2486, 3, 5.

110

See GEMEINSAME GESCHÄFTSORDNUNG DER BUNDESMINISTERIEN [GGO] [JOINT RULES OF PROCEDURE OF THE FEDERAL MINISTRIES] §§ 47–48. 111

112

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 42(I)(1).

Cf. Enquete-Kommission Verfassungsreform, BT-Drs. 7/5924, 80; Ad-hoc-Kommission Parlamentsreform, BTDrs. 10/3600, 10. To the decision-making in parliamentary committees ,see supra Section D. III. 1.

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3. Regulating Conflicts of Interests Finally, it is necessary to combat the suspicion that certain parliamentarians serve second masters. Citizens in Germany believe that influential interest groups are represented in the Bundestag by parliamentary delegates while other interests can gain no parliamentary 113 presence. The recently sharpened obligation to make non-parliamentary activities and 114 incomes public leads to more transparency. To increase acceptance of parliamentary decisions, however, it is necessary to address conflicts of interest further. For reasons of constitutional law, not all remunerated non-parliamentary activities of the elected 115 representatives can be prohibited. The Berufsfreiheit, the fundamental right of free 116 profession, and the freies Mandat, the constitutionally guaranteed autonomy of the 117 parliamentarians, would stand against this restriction. But these guarantees do not 118 prohibit a ban of those additional activities that create conflicts of interest. A ban of those actions would apply to a full-time trade unionist or representatives of employers’ associations. It could also be considered whether to exclude parliamentarians from participating in decisions where they are partial as they have a vested interest. This, however, is not recommended as it could lead to inadvertent shifts of political power within parliament. Further, there should be rules governing the period following the elected mandate. The transfer of leading politicians into the service of powerful business companies and associations has repeatedly harmed the image of democracy. The “revolving door” stands as a particularly remarkable symbol of the power of lobbyists. There are legal obligations of 119 confidentiality, but that is not enough. To reduce the impression of a reward after leaving office, some commentators wish former elected representatives to be prohibited for a two-year quarantine period from taking up any activities that are connected to a 120 former public role. Such an intervention in the basic rights of freedom to exercise a 113

Cf. also 40 BVERFGE 296 (318).

114

Cf. ABGEORDNETENGESETZ [AbG] [DELEGATES‘ LAW] § 44a Abs. 4 S. 1, § 44b Nr. 1 und 2; GO-BT § 18, and §§ 1–4 of the “Verhaltensregeln für Mitglieder des Deutschen Bundestages” [RULES OF CONDUCT FOR THE DELEGATES] (appendix 1 to GO-BT). See also 135 BVERWGE 77; 118 BVERFGE 277. 115

See ANNE KÄßNER, NEBENTÄTIGKEITEN UND NEBENEINKÜNFTE DER MITGLIEDER DES DEUTSCHEN BUNDESTAGES 155 (2010).

116

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 12.

117

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 38(I)(2).

118

See 118 BVERFGE 277 (333); but see 118 BVERFGE 277 (338) (W. Hassemer, U. Di Fabio, R. Mellinghoff and H. Landau, dissenting). 119

See ABGG § 44d Abs. 1.

120

KOLBE, supra note 108, at 50.

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profession would be unconstitutional, however. Nevertheless, a regulation would be 121 admissible and reasonable whereby—following the American model —former politicians would not be able to act as lobbyists within the following legislative period. II. Strengthening the Influence of Individual Members of the Public Second, one must consider the influence of individual citizens on parliamentary activity. 122 Increasingly, citizens are no longer satisfied with the role of spectators after the election. There is a considerable political interest—only twenty-two percent have no or only a 123 limited interest —which can improve the responsivity of parliament and render controversial decisions more acceptable. 1. Petition Procedures, Ombudsman Functions, Peoples’ Initiatives 124

The starting point in Germany is the constitutional right of petition. Important reforms have already been implemented in recent years. Petitions of general interest (von allgemeinem Interesse) are open to the public online. In addition, provided 50,000 citizens support a submission, the Petitionsausschuss (the Petition Committee) must deliberate 125 with the petitioners openly rather than behind closed doors. This form of participation should be improved through a petition management system, which discloses the 126 respective stage of the submissions being pushed forward. From a political perspective, there is a serious complaint that the Petition Committee of the Bundestag has only a 127 subordinate role in parliamentary activity. An ombudsman could render public concerns 128 more visible. There are role models especially in Scandinavian countries. In Germany, however, the treatment of petitions is traditionally organized within the parliamentary

121

Cf. DAVIS, supra note 99, at 362.

122

Cf. SOZIALWISSENSCHAFTLICHES FORSCHUNGSZENTRUM, supra note 6, at 102.

123

Id. at 100.

124

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [BASIC LAW] art. 17.

125

Cf. the rules of procedure (Verfahrensgrundsätze) enacted by the Petition committee on the basis of § 110 Abs. 1 GOBT (Nr. 4 I 2, Nr. 2.2. IV, Nr. 8.4 IV). For details, see Annette Guckelberger, Neue Erscheinungen des Petitionsrechts, DÖV 85 (2008); for an evaluation in a political science perspective, see Andreas Jungherr & Pascal Jürgens, E-Petitionen in Deutschland, ZPARL 523 (2011). 126

Cf. ULRICH RIEHM ET AL., BÜRGERBETEILIGUNG DURCH E-PETITIONEN 253, 259 (2009) (giving further reform suggestions). The British www.fixmystreet.com could serve as a role model. 127

See Thomas Saalfeld, Parliament und Citizens in Germany, in PARLIAMENTS AND CITIZENS IN WESTERN EUROPE, 43, 51 (Philip Norton, ed., 2002). 128

Cf. the legislative proposal of Bündnis 90/Die Grünen, BT-Drs. 13/3578.

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129

system and this should remain so. Ombudsman functions should be exercised not by an independent person, but by the chair of the Petition Committee. Political differences of opinion in the treatment of petitions in the committee must be disclosed in detail. So far, 130 the committee only provides a general overview. The possibilities for public influence should be strengthened by means of allowing a certain 131 number of individuals to legally oblige parliament to deliberate on a particular concern. Such Volksinitiativen (peoples’ initiatives) would serve the desire of the public for more direct democratic involvement without restricting the representation principle. Peoples’ initiatives need not be a preliminary step to a Volksentscheid (a legally binding peoples’ 132 decision) but may be deployed as independent participatory instruments. If the parliamentarians make a decision that does not correspond with the articulated public interest, they have to face popular frustration in the next election at the latest. This is the price of political leadership. 2. Exerting Influence on Legislative Procedure The general legislative procedure itself also contains possibilities for strengthened participation. In individual cases, the Bundestag already offers discussion forums on the 133 Internet. To strengthen the equality of possibilities for influence—and ultimately also to enhance the public acceptance of decisions made through political leadership—the individual member of the public should have an enforceable right to express opinions on 134 135 legislative proposals. The Swiss Vernehmlassungverfahren could serve as a model. As expression of opinion rather than decision is concerned, the information and participation opportunities can be limited to the Internet—to reduce the parliamentary workload and involvement—although the possibilities to use this method are not yet uniformly 129

See GO-BT §§ 12, 57, 58. To the constitutional rule according to which the committees have to “mirror” Parliament politically, 80 BVerfGE 188 (222); 84 BVerfGE 304 (323); 96 BVerfGE 264 (283); 112 BVerfGE 118 (133). 130

See GO-BT § 112 Abs. 1.

131

Cf. STEFAN MARSCHALL, PARLAMENTARISMUS 117 (2005).

132

See (discussing Great Britain) FOX, supra note 8, at 682; Peter Riddell, In Defence of Politicians: In Spite of Themselves, 63 PARL. AFF. 545, 554 (2010). 133

Compare Jens Tenscher & Laura Will, Abgeordnete Online?, ZPARL 504 (2010) with Ross Ferguson, Convergent Evolution: The Development of Online Engagement in Westminster and Whitehall, 61 PARL. AFF. 216 (2008) (giving a perspective on Great Britain). 134

Cf. Joachim Linck, Unmittelbare Bürgerbeteiligung am parlamentarischen Gesetzgebungsprozess, ZG 137, 145 (2004). 135

Cf. Art. 147 of the Swiss Bundesverfassung [FEDERAL CONSTITUTION], the Vernehmlassungsgesetz [CONSULTATION and the Vernehmlassungsverordnung [RULE ON CONSULTATION], with LINCK, supra note 134, at 140 (also providing comparable procedures in Austria and some states of the U.S.). ACT],

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distributed in the society. The parliamentarians will have to take account of the digital divide in their decision-making and also remember that the opinions expressed may be distorted by fraudulent activities such as intentional mass mailing. In addition to this, 136 consultative referenda (Volksbefragung) should be considered by parliament. 137 Experiences on the local level and abroad support this proposal. 3. Using Empirical Research Methods In all forms of public involvement, parliamentarians have to take into account that wellresourced and educated groups of the population use the opportunities to participate disproportionately often. In the words of Elmer Eric Schattschneider: “The flaw in the 138 pluralist heaven is that the heavenly chorus sings with a strong upper-class accent.” This threatens the democratic demand for equality. For the political representatives, it is difficult to correctly assess the balance of interest. There is a danger that parliamentary responsiveness will be distorted. To counteract this threat, the expertise of social sciences in empirical research should be considered by the Bundestag. In Germany, the experience has been far from negative on the local and regional level with a “citizen forum“ 139 (Bürgerforum) and “citizen statements“ (Bürgergutachten). Such measures can render parliamentary work more fertile. Some consider giving even decision-making rights— possibly in the form of a veto—to discussion groups in which randomly selected members 140 of the public participate. This would, however, contradict the constitutionally required chain of legitimacy. Therefore, this idea cannot be realized in Germany. III. Role of the Representatives in Parliamentary Decision-Making Finally, consideration should be given to the way in which parliamentarians can take account of the preferences of the public in the interest of responsiveness in the decision-

136

But see Enquete-Kommission Verfassungsreform BT-Drs. 7/5924, 12.

137

See ULRICH ROMMELFANGER, DAS KONSULTATIVE REFERENDUM 54, 159, 172, 283 (1987). For Austria, see Bundesverfassungsgesetz, art. 49b, and the Volksbefragungsgesetz of 1989. In Switzerland there are hardly any consultative referenda. Cf. REGINE STRÄULI, KONSULTATIVE VOLKSABSTIMMUNGEN IN DER SCHWEIZ (1982). 138

ELMER E. SCHATTSCHNEIDER, THE SEMISOVEREIGN PEOPLE 34 (1960). See also ROBERT A. DAHL, WHO GOVERNS? 305 (1961); Wainer Lusoli et al., (Re)connecting Politics? Parliament, the Public and the Internet, 59 PARL. AFF. 24, 39 (2006); Declan McHugh, Wanting to be Heard But Not Wanting to Act? Addressing Political Disengagement, 59 PARL. AFF. 546, (2006); Aviezer Tucker, Pre-emptive Democracy: Oligarchic Tendencies in Deliberative Democracy, 56 POL. STUD. 127 (2008); Fishkin, supra note 35, at 49 (“participatory distortion”). 139

PETER C. DIENEL, DIE PLANUNGSZELLE (5th ed. 2002) (explaining the concept of Planungszelle or focus group); Claudia Landwehr & Katharina Holzinger, Parlamentsplenum und Bürgerkonferenz—Was leisten sie auf dem Weg zu politischen Entscheidungen?, ZPARL 889 (2009) (giving the background of deliberative democratic theory). 140

Cf. CROUCH, supra note 2; Fishkin, supra note 35, at 183 (“Putting Europe in one room”).

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making process, and how they are able to implement their assessment on the need for political leadership. 1. Division of Labor Between Plenary and Committees, Parliamentary Minority Rights Many complain that the Bundestag’s plenary debates generally have no effect on policy 141 outcomes, since the opinions of the parliamentary groups are formed in advance. Division of labor between plenum and committees, however, is necessary. In a comparative perspective, there is a rule of thumb, according to which the more time a 142 parliament spends in plenary debate, the less influential it is. This does not mean that what is previously discussed and decided in parliamentary committees is merely given a 143 form of legal validity in plenum. Rather, the plenary debate is intended to justify the respective political position publicly. The debates not only provide information for future elections, but they can also contribute to the acceptance of controversial decisions, because in the parliamentary debates the people sees that what they think—and possibly have submitted to parliamentarians—plays a role in parliament in the sense of responsiveness. This aspect should not be underestimated. Also, speeches of partyindependent parliamentarians and of those who depart from the party line contribute to the success of representative democracy, particularly when the government is supported by a grand parliamentary coalition or if governing parties and large parts of the opposition are of the same opinion. Contrary to the traditional image of the separation of powers, parliament in the German 144 system—as also in Great Britain—generally fails as a “veto player” in the legislative 145 process, as the parliamentary majority regularly supports the government. Therefore, 146 the political minority above all has the task to control its government. As many citizens

141

See, e.g., Hildegard Hamm-Brücher, Die Krise des Parlamentarismus und Chancen zu ihrer Überwindung, APUZ 3, 4 (1985/B 6). During the Weimar Republic SCHMITT, supra note 15, at 63 (“Sind Öffentlichkeit und Diskussion in der tatsächlichen Wirklichkeit des parlamentarischen Betriebs zu einer leeren und nichtigen Formalität geworden, so hat auch das Parlament … seine bisherige Grundlage und seinen Sinn verloren.”). 142

Klaus von Beyme, Parlamente, in VERGLEICHENDE REGIERUNGSLEHRE 264, 273 (Hans-Joachim Lauth ed., 3d ed. 2010). 143

But see Alfred Mechtersheimer, Parlamentsreform—eine demokratische Notwendigkeit, APUZ 50-1 1988/B 13; CARL SCHMITT, VERFASSUNGSLEHRE 319 (1928). 144

Cf. GEORGE TSEBELIS, VETO PLAYERS—HOW POLITICAL INSTITUTIONS WORK (2002).

145

See Philip Cowley & Mark Stuart, Parliament: More Revolts, More Reforms, 56 PARL. AFF. 188 (2003) (concerning British parliamentarianism). 146

Cf. 49 BVERFGE 70 (86); 102 BVERFGE 224 (236); 114 BVERFGE 121 (149).

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147

fail to understand this intra-institutional separation of powers, an express provision should be included in the Basic Law that emphasizes the task of the opposition to 148 control. Parliamentary minority rights, such as the right to publicly question the government and to set up a committee of enquiry, can already be used by opposition 149 parties to mobilize the public and exert pressure on the government. The political “knockabout” in parliament—at times sanctimoniously criticized, even by politicians 150 themselves —is not a symbol of degeneration but rather the expression of a fertile Streitkultur, a fruitful arguing culture. Democracy means a fight for the well-being of the 151 people in an “agonistic pluralism” and parliament provides an appropriate arena for this. In this context, the trend to political entertainment—for example, in talk shows—is not to 152 be bemoaned but praised as a sign for a vivid democracy. 2. Decision-Making Within the Party Factions The widespread criticism of the power of the party factions in parliament (Fraktionen) carries more weight. There is talk of the parliamentary mandate becoming “depersonalized.” The complaint is that individual delegates have only a minimal potential 153 to effectively influence the decision-making of parliament. Still, it is an important task of 154 party factions to aggregate the various ideas and concerns of the parliamentarians. The public has elected the parliamentarians also—if not even primarily—as representatives of a particular political party in Germany. Against this background, there is no constitutional objection against Fraktionsdisziplin, the social pressure being exerted in the party factions. 155 In Germany, only Fraktionszwang—downright faction compulsion—is prohibited. Apart 147

See Werner J. Patzelt, Ein latenter Verfassungskonflikt? Die Deutschen und ihr parlamentarisches Regierungssystem, PVS 725, 738 (1998). 148

Cf. PASCALE CANCIK, PARLAMENTARISCHE OPPOSITION IN DEN LANDESVERFASSUNGEN (2000). Against that Gemeinsame Verfassungskommission, BT-Drucks. 12/6000, 89. 149

Cf. 13 BVERFGE 123 (125); 57 BVERFGE 1 (5); 67 BVERFGE 100 (129); Sven T. Siefken, Parlamentarische Frageverfahren—Symbolpolitik oder wirksames Kontrollinstrument?, ZPARL 18 (2010). 150

Critically, e.g., Kurt Biedenkopf, Parlamentsreform—eine demokratische Notwendigkeit, APUZ 48, 49 (1988/B 13) (assesment of a former Ministerpräsident of Sachsen). 151

Compare SCHUMPETER, supra note 32, at 428, with MOUFFE, supra note 5 (giving a modern view in favor of an “agnostic pluralism”). 152

Cf. András Körösényi, Political Representation in Leader Democracy, 40 GOV’T & OPPOSITION 358, 367 (2005). But see CROUCH, supra note 2. 153

See Hamm-Brücher, supra note 141, at 5. See also JÜRGEN HABERMAS, STRUKTURWANDEL DER ÖFFENTLICHKEIT 304 (1962); SCHMITT, supra note 15. 154

Cf. 2 BVERFGE 143 (160); 10 BVERFGE 4 (14); 20 BVERFGE 56 (104); 43 BVERFGE 142 (147); 84 BVERFGE 304 (324); 112 BVERFGE 118 (135); 118 BVERFGE 277 (329). 155

See, e.g., 4 BVerfGE 10 (15).

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from that, it is politically and legally correct that delegates generally appear not as struggling alone but as voluntary members of a team. The situation is different for the formation of faction policy. The elected representatives of the people are not merely 156 organizational and technical intermediaries between their party and parliament. Within their factions, parliamentarians are called upon to be responsive to public preferences and to express themselves according to their consciences and with courage regarding their own views on the need for political leadership. The clarification of problems should not always 157 take place behind closed doors. The public will not be offended by open internal debates. They only expect that compromises are upheld. E. Final Remarks: More Government with the People The empirical findings mentioned at the outset of this article have made it clear: The democracy of the twenty-first century cannot only be the one, which was founded in Germany after the collapse of the Third Reich in 1949. The well-known triad of Abraham 158 Lincoln—“government of the people, by the people, and for the people” —must be extended in Germany as elsewhere towards more “government with the people.” This article has contemplated what can be done in Germany de lege ferenda to increase the influence of the public on the composition of parliament and parliamentary decision-making and to improve the transparency of the procedures. Euphoria is out of place here. Even if parliament and the delegates exploit all opportunities for the improvement of the level of legitimacy, public acceptance of political leadership decisions that do not reflect its own interests and values will remain precarious. Still, the more representative democracy transparently involves the public, the more hope for acceptance of their decisions without having to deploy coercive state power. 159

Finally, there are worrying sociological findings regarding “unequal democracy.” The lower a person’s level of education and income is, the less likely he or she is to participate 160 in elections. Many of the proposed reforms are subject to the criticism that they further 156

But see Gerhard Leibholz, Der Strukturwandel der modernen Demokratie, in GRUNDPROBLEME DER DEMOKRATIE 170, 197 (Ulrich Matz ed., 1973). 157

See Wolfgang Jäger, Repräsentationsdefizite des Deutschen Bundestages, in DER SOUVERÄN AUF DER NEBENBÜHNE 134, 144 (Bernd Guggenberger & Andreas Meier eds., 1994). 158

President Abraham Lincoln, Gettysburg Address (Nov. 19, 1863) (“Government of the people, by the people, for the people, shall not perish from the earth.”). 159

160

Cf. LARRY M. BARTELS, UNEQUAL DEMOCRACY 252 (2010) (“Economic Inequality and Political Representation”).

See Dirk Jörke, Die Versprechen der Demokratie und die Grenzen der Deliberation, ZPOL 269 2010; DALTON, supra note 8, at 50 (giving an international perspective on the U.S.); Jens Alber & Ulrich Kohler, Die Ungleichheit der Wahlbeteiligung in Europa und den USA und die politische Integrationskraft des Sozialstaats, LEVIATHAN 510, 523 (2007) (comparing to the U.S.).

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advantage already active people and further disadvantage those who belong to what 161 sociologists term the “new underclass.” To counteract this, all individuals involved in democratic decision-making must do their utmost to get those to speak who lack not only 162 time and knowledge but also rhetorical skills and self-confidence. This is, however, not a requirement of law, but rather a political pre-condition for the success of representative democracy that can only be referred to the democratic and social ethos of the elected representatives.

161

162

See, e.g., GIDDENS, supra note 46.

Geoffrey K. Roberts, Political Education in Germany, 55 PARL. AFFAIRS 556 (2002) (relatively positive to Germany).

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Articles Strengthening European Union Democratic Accountability Through National and Treaty-Based Pre-Legislative Controls By Özlem Ülgen*

Abstract This article considers whether greater accountability for EU supranational decision-making can be achieved through a combination of member states’ legislative processes and EU treaty-based mechanisms. The EU is formed by member states’ national consent through treaty ratification and a system of domestic pre-legislative controls on consent— parliamentary approval, public consultation and referendum—which operates to limit the nature and extent of EU law. Using the UK as an example to compare with other member states, the article contends that such domestic controls are prerequisites to national incorporation of EU law and strengthen democratic accountability. Consent alone, however, does not provide an adequate basis for accountability of supranational decisions; EU constitutional principles of citizenship, democracy, and political rights illustrate how the EU fulfills a role as protector of rights. The article further argues that the EU’s protector role represents partial legitimacy and accountability for supranational decisions. Greater legitimacy and accountability derives from national parliaments’ pre-legislative controls under EU law—scrutinizing legislation, monitoring subsidiarity, and exercising veto powers. The article concludes that if these controls are exercised properly, they represent powerful accountability mechanisms.

*

Senior Lecturer in Law, School of Law, Birmingham City University, UK: [email protected]. The author provided written and oral evidence to the UK Government’s 2014 Review of Balance of Competences between the UK and EU: Subsidiarity and Proportionality (final ministerial report to Parliament, December 2014). The author would like to thank Martin Trybus for his helpful comments on an earlier draft.

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A. Introduction How often do politicians point to the European Union’s “democratic deficit”? In evaluating the press coverage, the media uses this phrase far too often as a slogan to galvanize popular sentiment for national retrenchment and reassertion of sovereignty. After forty years of membership, the United Kingdom (“UK”) is now set to hold a referendum on European Union (“EU”) membership. On 5 July 2013, the UK parliament voted in favor of 1 introducing legislation to allow a national referendum to take place before 2017. Feeling the brunt of financial cuts, strict EU bailout terms, and the imposition of new regulatory requirements, Greece, Spain, Portugal, Italy, and Cyprus have mooted the possibility of pulling out of the eurozone to save their respective economies. In such a climate, the doctrine of supremacy, under which EU law prevails over member states’ national laws, is a predictable target for the “democratic deficit” slogan. Politicians, however, have a responsibility to be properly informed so that they can represent and constructively engage the electorate. Simply stating that EU law prevails over national laws misrepresents member states’ consent and involvement in decision-making processes. It does not take into account three features of democratic accountability under EU law: (1) The consent of member states; (2) constitutional principles of citizenship, rights, democracy, and the protector role of EU institutions; and (3) the role of national parliaments. This article considers how the EU is formed by member states’ national consent through treaty ratification and a system of domestic pre-legislative controls on consent— parliamentary approval, public consultation and referendum—which operates to limit the nature and extent of EU law. Using the UK as an example to compare with other member states, it contends that such domestic controls are prerequisites to national incorporation of EU law and strengthen democratic accountability. Consent alone, however, does not provide an adequate basis for accountability of supranational decisions; EU constitutional principles of citizenship, democracy, and political rights illustrate how the EU fulfills a role as protector of rights. It is further argued that the EU’s protector role represents partial legitimacy and accountability for supranational decisions. Greater legitimacy and accountability derives from national parliaments’ pre-legislative controls under EU law— scrutinizing legislation, monitoring subsidiarity, and exercising veto powers. The article concludes that if these controls are exercised properly, they represent powerful accountability mechanisms.

1

5 July 2013, 565 PARL. DEB., H.C. (2013) 1169–1246 (U.K.).

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B. National Consent Some scholars argue that because the EU is established by member states, which in turn are composed of democratically elected governments, their consent through treaty 2 ratification provides legitimacy for decisions at the supranational level. National courts, in considering the impact of EU law on domestic law, have also pointed to the decisive role of member states as sovereign entities with ultimate authority to limit their own 3 sovereignty. This state-centric view conforms to traditional international law on international organizations, which posits that national consent forms the basis of an 4 organization’s existence, mandate, and functions. State sovereignty and the capacity to enter into treaty relations are foundational principles of modern international law. It is precisely by focusing on the state-centric view that one can begin to understand how national consent forms part of the EU’s legitimacy and accountability. I. National Consent by Treaty Ratification Formed out of the carnage and troubles of World War II, the founding aim of the EU was to pool continental states’ coal and steel, atomic energy, and economic resources in order to establish conditions for peace, stability, and economic prosperity, thereby avoiding 5 conflict. Since establishing this laudable aim, the EU has become more than a continental economic cooperation zone. From the introduction of the euro in 2002 to the consolidation of EU competences under the Treaty of Lisbon, which came into force in 2009, the EU now operates as a supranational organization representing twenty-eight 6 member states in economic, cultural, social, environmental, and political affairs. National 2

Renaud Dehousse, Institutional Reform in the European Community: Are There Alternatives to the Majoritarian Avenue? (European Univ. Inst., EUI Working Paper RSC 95/4, 1995). 3

See 89 BverfGE 155; see also R v. Secretary of State for Transport, ex parte Factortame Ltd. No.2 [1991] 1 A.C. 603, 659. 4

INTERNATIONAL ORGANIZATIONS (Jan Klabbers ed., 2005).

5

See Preamble to 1957 Treaty of Rome Establishing the European Economic Community, Mar. 25, 1957; see also DEREK URWIN, THE COMMUNITY OF EUROPE: A HISTORY OF EUROPEAN INTEGRATION (1995); see also JOHN PINDER & SIMON USHERWOOD, THE EUROPEAN UNION: A VERY SHORT INTRODUCTION (2013); see also JOHN PINDER, THE BUILDING OF THE EUROPEAN UNION (1998). 6

See Consolidated Version of the Treaty on the Functioning of the European Union arts. 119, 140, May 9, 2008, 2008 O.J. (C 115) 47 [hereinafter TFEU]; see also TFEU art. 20; see also Treaty on European Union arts. 4–6, Oct. 26, 2012, 2012 (C 326) [hereinafter TEU]; see also TFEU arts. 4–6 (describing expansion of EU shared and complementary competencies—health protection, education, culture, development cooperation, environmental protection, consumer protection]); see also Single Market Act: Twelve Levers to Boost Growth and Strengthen Confidence, Working Together to Create New Growth, COM (2011) 206 final (Apr. 13, 2011); see also Paul Craig, The Lisbon Treaty: Process, Architecture and Substance, 33 EUR. L. REV. 137 (2008).

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consent has been a key feature along this evolutionary path. All member states have, in one form or another, agreed and consented to join the EU, leading to the formal process of 7 ratifying EU treaties. Giandomenico Majone refers to this as “derived legitimacy.” One can see this from the start of the EU as a single market with a single currency to the creation of a separate legal order with a political and cultural vision. Prior to membership in the EU, each candidate state must ensure compliance with the acquis communautaire (“acquis”) and must bring its national laws into compliance with EU law to meet membership criteria. A process of dialogue and negotiation takes place between the state and the EU, sometimes leading to opt-outs or derogations from certain treaty provisions. The candidate state has the responsibility to implement legislation and amend laws to be in compliance with the acquis. Failure to bring national law into 8 compliance with the acquis has been referred to as a “deficit in the political process.” Consultations with relevant national stakeholders on proposed EU legislation must take place to raise any potential conflict with existing domestic law and practice. These consultations allow individuals and groups to hold their government accountable during negotiations with the EU. Assuming the acquis is implemented, the next stage of consent is formal signature and ratification of the EU treaties. The formal act of signature and ratification represents a legal commitment, and under the principle of pacta sunt servanda, the member state is bound to act in good faith in implementing its treaty 9 obligations. This principle is recognized in Article 4(3) Treaty on European Union (“TEU”), 10 also referred to as the fidelity clause. EU treaties are international treaties that require domestic transposition before taking effect. This may take one of two forms: automatic incorporation or incorporation by domestic legislation. In monist legal systems, once the treaty is ratified, it has automatic effect in domestic law without necessitating incorporating legislation. Thus, Article 93 of the Dutch Constitution provides that international law may have direct effect and take

7

Giandomenico Majone, Europe’s ‘Democratic Deficit’: The Question of Standards, 4(1) EUR. L.J. 5, 12 (1998).

8

For example, the Polish parliament’s failure to amend the constitution to implement Council Framework Decision 2002/584 of 13 June 2002 on the European Arrest Warrant, which formed part of the acquis at the point of accession; see Darinka Piqani, Arguments for a Holistic Approach in European Constitutionalism: What Role for National Institutions in Avoiding Constitutional Conflicts Between National Constitutions and EU Law, 8(3) EUR. CONST. L. REV. 493, 503 (2012). 9

See Vienna Convention on the Law of Treaties art. 26, May 23, 1969, 1155 U.N.T.S. 331; see also ARNOLD MCNAIR, THE LAW OF TREATIES (1961). 10

See TEU art. 4(3); Case C-266/03, Commission v. Luxembourg, 2005 E.C.R. I-0000 (interpreting Article 4(3) as entailing enforceable substantive and procedural obligations).

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precedence over Dutch law. Under Article 94, some rules of international law take precedence over all domestic law, and any national statutory provisions that are 12 incompatible with these rules of international law are not applicable. These provisions taken together establish EU law’s supremacy over domestic law. Indeed, the first leading case to establish the doctrine of direct effect in EU law and to refer to the EU as a “new 13 legal order” was of Dutch origin. Subsequent case law supports the premise of a new 14 legal order created by member states’ consent on the basis of reciprocity. 1. UK Ratification and Domestic Incorporation In dualist legal systems, such as the UK, a ratified treaty must be incorporated into domestic law by implementing legislation. Under UK law, a treaty takes effect once an act of parliament incorporates it into domestic law. The doctrine of parliamentary sovereignty means that parliament is free from any limitation on its power to legislate and cannot bind any future parliament, so one parliament could introduce new legislation and another could repeal it. Parliament is supreme in its law-making authority, potentially placing UK constitutional law in direct conflict with the supremacy of EU law. But parliamentary sovereignty remains a constitutional convention rather than a statutory provision, allowing flexibility when incorporating EU law. Thus, the European Community (“EC”) treaties were incorporated through the European Communities Act 1972 (“the Communities Act”) by simple assent, involving agreement to apply the treaties without having to incorporate each treaty provision. This avoided potential conflict and implied repeal by any subsequent statute. The Communities Act requires that: (1) Any future act of parliament to be construed in line 15 with EU law; and (2) UK courts determine the meaning or effect of any treaty provision or EU instrument in accordance with principles set out by the European Court of Justice 16 (“CJEU”), as well as following its decisions. Taken together, these provisions mean CJEU decisions on supremacy in Costa v. ENEL, Internationale Handelsgesellschaft, and

11 12 13

Gw. [CONSTITUTION], art. 93 (Neth.). Gw. [CONSTITUTION], art. 94 (Neth.). See Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, 1963 E.C.R. 1.

14

See Case 6/64, Costa v. ENEL, 1964 E.C.R. 585; see also Case 11/70, Internationale Handelsgesellschaft, 1970 E.C.R. 1126. 15 16

The European Communities Act, 1972, c. 68, § 2(4) (U.K.) [hereinafter “The Communities Act”]. See id. c. 68, §§ 3(1)–(2).

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Simmenthal bind the UK. This is supported by UK case law. The rule of construction has been interpreted to oblige UK courts to adhere to supremacy where there is conflict 19 between EU law and any former or subsequent statute. The Communities Act has also 20 been identified as a “constitutional statute” not subject to implied repeal. In this sense, the UK has maintained its dualism and parliamentary sovereignty by choosing to designate the incorporating legislation as part of a constitutional hierarchy. Parliament consents to the limitation of its own legislative authority by becoming a part of a new legal order under 21 the EU. In the words of Lord Bridge, “[W]hatever limitation of its sovereignty Parliament 22 accepted when it enacted the European Communities Act was entirely voluntary.” A peculiarity of UK constitutional law makes it questionable whether, prior to any act incorporating an international treaty, there is democratic accountability. Who decides to ratify the treaty in the first place? The Crown—as represented by the government in parliament—has prerogative power to ratify international treaties and it is a nonjusticiable foreign affairs matter, meaning it is not subject to review by the courts. 23 Technically, it also does not require parliamentary approval. Still, a precedent was set in 24 R v. Secretary of State Foreign and Commonwealth Affairs, ex p Rees-Mogg when the court decided it could consider the government’s exercise of prerogative powers in relation to ratifying the Maastricht Treaty. The case failed on its merits due to the lack of ability to surrender or transfer prerogative powers by the UK government, and judicial 25 scrutiny of the original power was deemed inadmissible. Nevertheless, it does represent 17

See Costa at 585; see generally Internationale Handelsgesellschaft.

18

See Macarthys Ltd v. Smith [1981] Q.B. 199; see also Garland v. British Rail Engineering [1982] 2 All E.R 402; see also Marshall v. Southampton and South West Hampshire Area Authority [1986] Q.B. 401; see also R v. Secretary of State for Transport, ex parte Factortame Ltd. [1989] 2 All E.R. 692; see also Thoburn v. Sunderland City Council [2002] EWHC 195. 19

See the Court of Appeal’s position in relation to a statute preceding the Communities Act in Macarthys Ltd v. Smith [1981] Q.B. 199 and the House of Lord’s position in relation to a statute subsequent to the Communities Act in R v. Secretary of State for Transport, ex parte Factortame Ltd. [1989] 2 All E.R. 692. 20

See Thoburn v. Sunderland City Council [2002] EWHC 195, 60–62.

21

See T.R.S. Allan, Parliamentary Sovereignty: Law, Politics and Revolution, 113 L.Q. REV. 443 (1997); see also H.W.R. Wade, Sovereignty: Revolution or Evolution?, 112 L.Q. REV. 568 (1996). 22 23 24 25

See R v. Secretary of State for Transport, ex parte Factortame Ltd. No.2 [1991] 1 A.C. 603, 659. See Attorney General for Canada v. Attorney General for Ontario [1937] A.C. 326. See R v. Secretary of State Foreign and Commonwealth Affairs, ex parte Rees-Mogg [1994] 2 W.L.R. 115. See id. at 568–71.

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concern about unfettered use of prerogative powers, and attempts have been made to codify their use in legislation. On 3 March 1999, the government proposed the Crown Prerogatives Bill to control the existence, extent, and exercise of the prerogative to sign 26 treaties. During parliamentary debates preceding the invasion of Iraq in March 2003, 27 members of parliament (“MPs”) proposed formalization of prior parliamentary consent. In 2004, the Public Administration Select Committee advised that the prerogatives to sign 28 treaties and to wage war needed statutory authority. In August 2013, parliament voted against military action in Syria, making it increasingly difficult for the government to 29 override the democratic will of the people. The Prime Minister declared he would not 30 override parliament’s decision by exercising the prerogative power. Although proposals for statutory codification of prerogative powers have not been pursued, domestic controls exist in the UK to potentially limit or exclude future EU legislation. II. Pre-Legislative Domestic Controls on Consent Each member state has domestic pre-legislative controls on consent operating to limit the nature and extent of EU law. These vary and include public consultation, legislative 31 approval, and–the most progressive form of direct democracy—referendum. Judicial 26

Crown Prerogatives (Parliamentary Control) Bill, HC Parliamentary Business, Mar. 3, 1999, available at http://www.publications.parliament.uk/pa/cm199899/cmbills/055/1999055.htm. 27

Tam Dalyell MP introduced a private member’s bill, the Military Action Against Iraq (Parliamentary Approval) Bill, which received its first formal reading on 26 January 1999 but failed to progress due to the Queen’s refusal to grant consent for debate on the prerogative power to wage war. The bill can be seen at http://www.parliament.the-stationery-office.co.uk/pa/cm199899/cmbills/035/1999035.htm. See also 13 Feb. 2003, 339 PARL. DEB., H.C. (2003) 1056–73 (UK); see also 10 Mar. 2003, 401 PARL. DEB., H.C. (2003) 32, 35, 38; see also 17 Mar. 2003, 401 PARL. DEB., H.C. (2003) 703–23. 28

HOUSE OF COMMONS PUBLIC ADMINISTRATION SELECT COMMITTEE, TAMING THE PREROGATIVE: STRENGTHENING MINISTERIAL ACCOUNTABILITY TO PARLIAMENT, FOURTH REPORT OF SESSION 2003-04, H.C. 422. 29

N. Watt, R. Mason & N. Hopkins, MPs force Cameron to Rule Out British Assault on Syria, THE GUARDIAN (Aug. 30, 2013), http://www.theguardian.com/politics/2013/aug/30/cameron-mps-syria (showing how many MPs reported acting on overwhelming opposition from their constituents expressed via Twitter, emails and meetings). 30 31

See 29 Aug. 2013, 556 PARL. DEB., H.C. (2013) 1425–1556.

For an example, see Irish Supreme Court, Case 1986 No. 12036P, Crotty v. An Taoiseach, [1987] I.R. 713, establishing the constitutional practice of referendums for EU treaty reforms. Section 20(2) of the Danish Constitution allows for transfer of powers to the EU by statute adopted by a five-sixths parliamentary majority or simple majority public vote. Ireland, Denmark, and the UK are the only member states constitutionally requiring a referendum. Referendums in France, the Netherlands, Spain, and Luxembourg in 2005 on the Constitutional Treaty were not constitutionally required. See Fernando Mendez & Mario Mendez, Referendums and European Integration: Beyond the Lisbon Vote, PUBLIC LAW 223 (2010).

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review is also a mechanism to check executive decision-making power and scrutinize the 32 constitutionality of legislative acts. Still, as seen through the Lisbon decisions of member states’ domestic courts, judicial review is not necessarily a pre-legislative control preventing a decision and, in some cases, operates as a post-legislative check endorsing a 33 decision rather than nullifying it. Even where there is separation of powers between institutions of the state, judicial review may hinder democratic accountability by limiting 34 the types of individuals who can bring judicial review claims. The pre-legislative controls which allow for public involvement either through representative or direct democracy offer the clearest indication of democratic accountability for national consent to EU decisions. Member states have used these controls where situations involved membership 35 enlargement or major treaty revisions. While they represent a form of democratic accountability for EU decision-making, it is important to recognize their limitations. First, not all member states have the full range of domestic controls leading up to referendum. Although this may result in different levels of democratic accountability across the EU, it is intrinsic to each member state’s constitutional set up—a fact explicitly recognized under the national identity clause in Article 4(2) TEU and other provisions respecting 36 constitutional requirements. Second, the exercise of domestic controls may be subject to 37 conditions—such as a set number of votes in parliament—which may not be satisfied.

32

See French Conseil Constitutionnel [Constitutional Court] reviews of the Constitutional Treaty and the Lisbon Treaty under Article 54 of the French Constitution: Conseil constitutionnel [CC] [Constitutional Court] decision No. 2004–505DC, Nov. 19, 2004 (Fr.); Conseil constitutionnel [CC] [Constitutional Court] decision No. 2007–560DC, Dec. 20, 2007. See also Ústavní soud České republiky dne 26.11.2008 (ÚS) [Constitutional Court] [Decision of the Constitutional Court of Nov. 26, 2008], sp.zn PI. ÚS 19/08 (Czech); Ústavní soud České republiky dne 3.11.2009 (ÚS) [Constitutional Court] [Decision of the Constitutional Court of Nov. 3, 2009], sp.zn PI. ÚS 29/09. 33

See reviews of the Hungarian Constitutional Court and Polish Constitutional Tribunal after ratification of the Lisbon Treaty: Case 143/2010 (VII. 14.) Treaty of Lisbon, Judgment of July 12, 2010; Case K 32/09 Treaty of Lisbon, judgment of Nov. 24, 2010. 34

For example, Article 93.1 no. 2 of the German Basic Law restricts complainants to the Federal Government, a Land government, or one fourth of the members of the Bundestag. The Austrian constitution restricts postlegislative complaints to individuals who can show infringement of personal rights directly affecting them. 35

For example, Danish referendums on the Single European Act, the Maastricht Treaty, and the Amsterdam Treaty, and on whether Denmark should join the euro, which it has not; 2005 French and Dutch referendums voted against the Constitutional Treaty. 36 37

See TEU arts. 6(3), 42(2); see also TFEU arts. 25, 223(1), 262, 311.

For example, Deputies of the Austrian parliament failed to achieve the necessary one-third majority under Article 140.1 of the Austrian Federal Constitutional Law to demand a review of constitutionality of ratification of the Lisbon Treaty. After ratification they filed an individual petition, which was rejected by the Austrian

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Third, the existence of controls does not guarantee their use by the national bodies or institutions empowered to invoke them. This may be an issue relating to national democratic deficit. Finally, over-reliance on referendums by one member state may thwart development of the EU at the expense of all others, leaving the latter no choice but to seek changes through alternative arrangements within— or independent of—the treaty 38 39 framework, creating a “multi-speed” Europe. Arguably, the UK’s recent EU legislation on pre-legislative controls has made the use of alternative arrangements more likely. Compared to other member states, the UK’s extensive reliance on pre-legislative controls, especially wide use of referendums, is unprecedented. 1. German Parliamentary Responsibilities Germany’s Basic Law does not require a referendum to take place to decide matters relating to transfer of sovereign powers, integration, or any changes to EU law. It is a constitutional requirement that sovereign powers can be transferred only by specific 40 enactment of a statute with the Bundesrat’s consent. This requirement is to be interpreted in such a way that it covers any amendment of texts forming the basis of European primary law which relate to: Simplified revision procedures, lacunae-filling in EU treaties, competence changes whose bases already exist but which require concretization by further legal instruments, and a change in provisions that concern decision-making 41 procedures. Prior parliamentary approval of two-third votes in the Bundestag and twothird votes in the Bundesrat is required for the establishment of the EU, changes to its founding treaties, and comparable regulations that amend or supplement the Basic Law, or 42 make such amendments or supplements possible. In relation to ratification of the Maastricht and Lisbon Treaties and domestic implementing legislation, German citizens have raised constitutional complaints alleging violations of the

Constitutional Court. Verfassungsgerichtshof (VfGH) [Constitutional Court], Case SV 1/10-9 Treaty of Lisbon II, order of June 12, 2010. 38

See concerns expressed by EU Commissioner for the Internal Market and Services in the speech at Europe House, London, July 12, 2013, called The Single Market in Financial Services: We Need the UK on Board, available at http://europa.eu/rapid/press-release_SPEECH-13-636_en.htm. 39 40

Mendez & Mendez, supra note 31, at 227–29. GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDGESETZ] [GG] [Basic Law], art. 23.1 (Ger.).

41

Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, para. 243 (June 30, 2009), https://www.bundesverfassungsgericht.de/entscheidungen/es20090630_2bve000208en.html. 42

Grundgesetz [GG] [Basic Law], arts. 23.1, 79.2, 79.3.

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principle of democracy and the right to vote. Such complaints, however, have not been formulated in terms of a right to a referendum prior to ratification, so the Federal Constitutional Court (“FCC”) has not had to decide on its existence as a constitutional right. In Obiter, the FCC commented that the Basic Law may be changed to allow for 44 referendum. Still, in the most recent case relating to the legality of establishing the European Stability Mechanism, where over 37,000 constitutional complaints were lodged, 45 the FCC did not elaborate on this possibility or require a referendum. There is a strong line of reasoning throughout these cases which points to pre-legislative controls through the Bundestag exercising its constitutional responsibilities—ensuring representation of the popular will, future parliaments not bound by restricted competences, budgetary 46 autonomy, the right to participate in decision-making, and the right to information. 2. Polish Parliamentary Consent Poland’s Constitution requires prior parliamentary consent through statute for international agreements. The statute must pass with two-third votes in the Sejm and two47 third votes in the Senate. Nationwide referendum is an alternative to parliamentary consent to treaty ratification, but this is by no means the norm because the Sejm 48 ultimately decides on the method of consent. A general referendum provision provides that a nationwide referendum “may be held in respect of matters of particular importance 49 to the State.” There is, however, no clarification of what these “matters” might be and the power to order a referendum resides either with the Sejm or the President with the 50 Senate’s consent. Although referendum was first used for Poland’s accession to the EU, 43

See 89 BverfGE 155; see also Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, (June 30, 2009). 44

See Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, para. 270 (June 30, 2009). 45

See Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvR 1390/12 (Sept. 12, 2012) [hereinafter ESM Treaty Temporary Injunctions]; See Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvR 1390/12 (Mar. 18, 2014) [hereinafter ESM Treaty Decision]. 46

See 89 BverfGE 155, paras. 56–63, 94–96; see also Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, paras. 210, 246–60, 375, 383 (June 30, 2009); see also ESM Treaty Temporary Injunctions at paras. 208–15, 286–87; see also ESM Treaty Decision at paras. 160–66. 47 48 49 50

Tekst Konstytucji Rzeczypospolitej Polskiej z dnia 2 kwietnia 1997 r. [Constitution] arts. 90(1), (2) (Poland). See id. arts. 90(3), (4). See id. art. 125(1). See id. arts. 125(1), (2).

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the fact that it has not been used in subsequent EU matters—for example, changing the Constitution to enable extradition of Polish nationals under a European Council Decision or establishing the European Stability Mechanism—proves it is not intended as a pervasive 51 constitutional mechanism. Decisions of the Polish Constitutional Tribunal indicate that parliamentary consent is the preferred pre-legislative control over EU matters while referendums are a last resort providing “social legitimi[z]ation of a decision that is of such 52 great significance for the state.” 3. UK Parliamentary Approval and Referendum Triggers Until 2010, it was a matter of constitutional convention—the “Ponsonby rule”—for parliament to be consulted before ratification of a treaty. This rule is now enshrined in statute under section 20 of the Constitutional Reform and Governance Act 2010 (“the 53 Reform Act”). Section 20 provides that a treaty cannot be ratified unless: (1) A government minister lays before parliament a copy of the treaty; (2) the treaty is published in a way that a government minister thinks appropriate; and (3) twenty-one parliamentary 54 sitting days expires without either House—Commons or Lords—opposing ratification. If the House of Commons decides against ratification, the treaty may still be ratified subject to: (1) The government making a statement to parliament indicating it should be ratified and explaining why; and (2) twenty-one days further expires without the House of Commons deciding against ratification. Should the House of Lords be the only one opposing ratification, the government can still ratify if it makes a statement to parliament explaining its decision. In exceptional cases, where the government decides parliamentary 55 consultation and approval are not required, the treaty may be ratified. Elected representatives in the House of Commons have an opportunity to scrutinize provisions of the treaty and raise concerns before ratification takes place. In fulfillment of their parliamentary duties, MPs would seek clarification and consult constituency 51

See K18/04 Polish Membership of the European Union (Accession Treaty), Polish Constitutional Tribunal, Judgment of May 11, 2005; K32/09 Treaty of Lisbon, Judgment of Sept. 24, 2010; P1/05 Application of the European Arrest Warrant to Polish Citizens, Polish Constitutional Tribunal, Decision of Apr. 27, 2005; K33/12 The Act on the ratification of the European Council Decision of Mar. 25, 2011 amending Article 136 TFEU with regard to a stability mechanism for Member States whose currency is the euro, Judgment of June 26, 2013 [hereinafter ESM Decision]. 52 53 54 55

See ESM Decision at 84 (dissenting Opinion of Judge Marek Zubik (English translation)). Constitutional Reform and Governance Act 2010, c. 25, § 20 [hereinafter The Reform Act]. See id. § 20(1)(a), (c). See id. §§ 20(4)–(5), 20(8), 22(1).

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members. But there are a number of mechanisms under the Reform Act—twenty-one days extension not leading to a vote against by the House of Commons; overruling a vote against from the House of Lords; exceptional cases category—which enable the government to push through ratification without parliamentary approval. Thus, the Crown’s prerogative is not completely under statutory control. Generally, future EU treaties and legislation are now subject to one or more requirements—for example, parliamentary approval, act of parliament, or referendum— 56 under Part 1 of the European Union Act 2011 (“the EU Act”). The EU Act continues to recognize supremacy in relation to “directly applicable or directly effective EU law,” and 57 the obligation to interpret UK law in conformity with EU law. There is an attempt at reasserting parliamentary sovereignty by making the application of EU law contingent on the continuing existence of the Communities Act, the statute originally incorporating the EC treaties. Given the recent parliamentary vote supporting a membership referendum, parliamentary sovereignty seems re-positioned to enable future express repeal of the Communities Act. But the possibility of express repeal and parliament’s limitation of its own sovereignty are already recognized in case law, so it is difficult to see what else this 58 provision adds. Perhaps it is irrelevant that parliamentary sovereignty is not explicitly mentioned when we look at the overall effect of the EU Act. 3.1 EU Areas Requiring Only Parliamentary Approval A relatively mild form of pre-legislative control on consent is parliamentary approval provided for under section 10 of the EU Act. A motion is put before each House of 59 Parliament, which agrees to the motion without amendment. EU areas subject to only parliamentary approval range from extension of free movement of services to third 60 country nationals, to EU accession to the European Convention for the Protection of

56 57

European Union Act 2011, c. 12, § 14(2)(c) [hereinafter The EU Act]. See id. § 18.

58

See Michael Gordon & Michael Dougan, The United Kingdom’s European Union Act 2011: Who Won the Bloody War Anyway?, EUR. L. REV. 3, 7–8 (2012) (arguing that § 18 does not represent a “sovereignty clause” and fails to explain how UK law is reconciled with EU supremacy). 59 60

See The EU Act § 9(3). See id. § 10(1)(a) (relating to Article 56 of the TFEU).

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Human Rights and Fundamental Freedoms. Other areas relate to changes to statutes of 62 EU institutions and to the number of Advocates-General. 3.2 EU Areas Requiring Only an Act of Parliament A second form of pre-legislative control directly involves the legislature and a specific legislative act before the EU measure can take effect. The following Council of Ministers (“the Council”) decisions require approval only by an act of parliament: Strengthening EU 63 citizens’ rights—free movement, residence and the right to vote; the election of members of the European Parliament (“MEPs”) in accordance with a uniform procedure or 64 common principles of member states; conferring jurisdiction on the CJEU in disputes 65 relating to EU acts which give rise to European intellectual property rights; laying down 66 the provisions relating to the system of own resources of the EU; altering the number of 67 Commission members; exercising the passerelle clause in certain EU areas to change voting from unanimity to qualified majority voting, or from the special legislative 68 procedure to the ordinary legislative procedure; adopting measures to take a step backwards in EU law regarding liberalization of movement of capital to or from third 69 70 countries; replacing Protocol No. 12 on excessive deficit procedure; exercising the passerelle clause in relation to enhanced cooperation matters in which the UK participates 61

See id. § 10(4) (relating to Article 6(2) of TEU). Accession must be agreed to unanimously under Article 218(8) TFEU, after approval by member states in accordance with their constitutional requirements. 62

See id. § 10(1)(b)–(f): Amendment to the Statute of the European System of Central Banks or of the European Central Bank (Article 129(3) of TFEU); an increase in the number of Advocates-General (Article 252 of TFEU); the establishment of specialized courts attached to the General Court (Article 257 of TFEU); amendment to the Statute of the Court of Justice of the European Union (Article 281 of TFEU); amendment to the Statute of the European Investment Bank (Article 308 of TFEU). 63 64 65 66 67

See id. § 7(2)(a) (relating to Article 25 of TFEU). See id. § 7(2)(b) (relating to Article 223(1) of TFEU). See id. § 7(2)(c) (relating to Article 262 TFEU). See id. § 7(2)(d) (relating to Article 311 TFEU). See id. § 7(4)(a) (relating to Article 17(5) TEU).

68

See id. § 7(4)(b) (relating to Article 48(7) TEU). The certain EU areas relate to all those provisions not listed in Schedule 1 of the EU Act (for example, family law with cross-border implications and the number of AdvocatesGenerals). 69 70

See id. § 7(4)(c) (relating to Article 64(3) of TFEU). See id. § 7(4)(d) (relating to Article 126(14) of TFEU).

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and which do not also require a referendum; and exercising the general competence 72 provision, also known as the flexibility clause. With the exception of exercising the passerelle and general competence clauses, which also require a referendum, the above areas generally reflect the treaties’ respect for national identity and recognition of each member state’s constitutional requirements. Interestingly, the EU Act does not require a referendum for any Council decision to strengthen EU citizens’ rights, which is at odds with giving people more say in EU matters of direct relevance. Similarly, decisions on MEP elections are a matter of direct interest to UK citizens with the potential to increase awareness and engagement in EU matters. In contrast, technical areas relating to EU voting procedures and exercise of the general competence provision are also subject to a referendum. This creates an imbalance between attracting electorate interest on substantive matters and losing their interest through disengagement in matters perceived as technical. 3.3 EU Areas Requiring an Act of Parliament and a Referendum “Referendum” is mentioned thirty-four times in the EU Act, more so than “act of 73 parliament” or “parliamentary approval.” From this basic count, it appears parliament favors direct democracy as a method of domestic control over EU decision-making. The referendum condition requires that a referendum takes place, with a majority vote in favor, before an act of parliament approving an EU treaty or Council decision comes into 74 force. Under section 13 of the EU Act, a non-partisan regulatory body, the Electoral Commission, oversees the referendum process. This Commission “must take whatever steps they think appropriate to promote public awareness of the referendum and how to vote in it” and “may take whatever steps they think appropriate to promote public 75 awareness of the subject-matter of the referendum.” This is a broad remit enabling setting standards for political campaigning and ensuring proper and accurate

71

See id. §§ 7(4)(e)–(f) (relating to Articles 333(1) and 333(2) of TFEU).

72

See id. § 8(3) (relating to Article 352 of TFEU). But note two other methods for approval of general competence decisions: Motion before Parliament and each House agrees without amendment (§ 8(4)); or a statement to Parliament that the decision is exempt from approval (§ 8(5)). 73 74 75

“Act of parliament” is referred to eleven times, and “parliamentary approval” seven times. See The EU Act §§ 2(2), 3(2).

Emphasis added. Section 13(1)(c) of the Political Parties, Elections and Referendum Act 2000, c. 41, (The PPERA) already requires the Electoral Commission to promote public awareness of the institutions of the EU.

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dissemination of referendum issues. To improve public understanding and engagement with EU affairs, there is a need for stronger monitoring and enforcement by the Electoral Commission—investigating and sanctioning referendum campaigns which misrepresent issues or mislead the public hindering access to relevant information and informed choice 77 in voting. The following areas require both an act of parliament and a referendum: Treaty revisions 78 relating to the TEU or Treaty on the Functioning of the European Union (“TFEU”); 79 amendment of the TFEU under the simplified revision procedure; extension of an existing 80 EU competence—exclusive, shared, or supporting—or conferral of a new one; and changes to a voting procedure—especially from unanimity to qualified majority voting, or from special legislative procedure to ordinary legislative procedure—relating to specific 81 areas. There are also wide policy areas subject to referendum as these are of national 76

Under the PPERA the Electoral Commission has wide ranging powers: Section 6B observations of working practices by representatives of the Commission; Section 6C and 6D accredited election observers; Section 8 powers regarding elections exercisable on recommendation of the Commission; Section 11 broadcasters to have regard to Commission’s views on party political broadcasts. 77

Sections 125–27 of the PPERA set general restrictions on publication of promotional material and campaign broadcasts but not in relation to the accuracy of information. 78 79 80 81

See The EU Act § 2(1) (relating to Article 48(2)–(5) of TEU). See id. § 3(1) (relating to Article 48(6) of TEU). See id. § 4(1)(a)–(j) (relating to Articles 3, 4 and 6 of TFEU).

See id. § 4(1)(k)–(m) (relating to TEU provisions: Article 7(2) (serious and persistent breach determination by European Council); Article 14(2) (European Parliament composition); Article 15(4) (European Council consensus decisions); Article 17(5) (Commissioners); Article 19(2) (Judges and Advocates-General of the Court); Article 22(1) (EU strategic interests and objectives); Chapter 2 of Title V (CFS policy); Article 48(3), (4), (6) and (7) (treaty revision procedures); Article 49 (EU membership application); Article 50(3) (European Council decision extending treaties’ application for withdrawing state)). TFEU provisions: Article 19(1) (measures against sexual, racial or ethnic, religious, age or sexual orientation discrimination); Article 21(3) (social security or social protection measures); Article 22(1) (non-national EU citizens standing and voting in state of residence local elections); Article 22(2) (same persons standing and voting in European Parliament elections in state of residence); Article 25 (strengthening EU citizens’ rights); Article 77(3) (passports, identity cards, residence permits etc.); Article 82(2)(d) (minimum rules on criminal procedure); Article 83(1) (decision on other areas of crime); Article 86(1) and (4) (European Public Prosecutor’s Office); Article 87(3) (police cooperation); Article 89 (cross-border operation by competent authorities); Article 113 (harmonization of indirect taxes); Article 115 (approximation of national laws affecting internal market); Article 121(2) (broad guidelines of economic policies); Article 126(14) (replacing protocol on excessive deficit procedure); Article 127(6) (conferral on European Central Bank prudential supervision tasks); Article 153(2)(b) (working conditions, social security etc.); Article 155(2) (agreements at EU level between management and labor); Article 192(2) (adoption of certain environmental measures); Article 194(3) (energy measures of a fiscal nature); Article 203 (association of countries and territories with the EU); Article 218(8) (certain international agreements); Art. 222(3) (implementation of solidarity clause having defense implications); Article 223(1) (uniform procedures for elections to European Parliament); Article 311 (own

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concern and the UK wants to maintain control—such policy areas include social policy, common defense, participation in the European Public Prosecutor’s Office, environment, 82 EU finance, enhanced cooperation, and border control. 4. Problems with Over-Reliance on Referendum The UK’s referendum requirement covers broad EU areas relating to the full range of EU institutions’ competences. There is concern for future treaty provision changes to alter the balance of power between EU and member state competences, as well as the possibility of majority rule in decision-making. In particular, any changes allowing Council decisions to be made by qualified majority voting instead of unanimity are subject to an act of parliament and referendum. This, however, is overly cautious and unnecessary to preserve the balance of power. For example, under Article 7(2) TEU, the European Council may unanimously determine a serious and persistent breach by a member state of respect for human dignity, freedom, 83 democracy, rule of law, and human rights. The Council can then act by qualified majority voting under Article 7(3) TEU to suspend certain membership rights for the offending 84 state. The passerelle clause under Article 48(7) TEU cannot be invoked to change voting 85 procedures under Articles 7(2) and 7(3) as this is excluded under Article 353 TFEU. Plus, there is no need to bypass the offending state’s negative vote because they are barred 86 from voting under Article 354 TFEU. A number of safeguards prevent abuse of serious breach determinations: Involvement of political and legislative institutions such as the European Council, the Council, and the European Parliament; setting voting procedures for each institution; voting procedures which cannot be changed; and the obvious political and diplomatic fallout for EU integration. Despite this, section 6(5)(b) Schedule 1 Part 1 of the EU Act makes such voting procedure change dependent on an act of parliament and a

resources decisions); Article 312(2) (multi-annual financial framework); Article 332 (expenditure on enhanced cooperation to be borne by member states other than those participating); Article 333(1) and (2) (enhanced cooperation); Article 346(2) (changes to list of military products exempt from internal market provisions); Article 352(1) (measures to attain EU objectives where treaties do not provide necessary powers). 82 83 84 85 86

See generally The EU Act § 6(5). See TEU art. 7(2). See id. art. 7(3). See TFEU art. 353. See id. art. 354.

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referendum. Another example of overly cautious domestic controls is the requirement for both prior parliamentary approval and referendum to change voting procedures under Article 48(7) TEU and the exercise of EU competence under Article 352 TFEU. Extensive use of referendums represents an absolutist notion of democratic legitimation through direct public voting. Referendums on EU voting procedures are clumsy brakes on internal operational rules that hinder efficient decision-making. Even in Germany, with a developed understanding of democratic participation through a constitutionally protected right to vote and state organs’ legitimacy derived from that right, the absolutist notion is rejected. In the ESM Treaty Decision, the German FCC deemed inadmissible constitutional complaints of breach of the right to vote if budgetary decisions are made by the Bundestag committee as opposed to the Bundestag plenary session, or if internal decisions of state organs are not subject to majority vote. Such internal procedures do not per se breach the principle of democracy or the right to vote. The right to vote is protected: only to the extent that it is in danger of being rendered ineffective in an area that is essential for the political self-determination of the people—for example, if the democratic self-government of the people is permanently restricted in such a way that vital political 88 decisions can no longer be made independently. By analogy, EU internal voting procedures are agreed on by representatives of member states to enable effective decision-making at the Council level. Subjecting these procedures to national referendums is to present citizens with a hollow sense of empowerment; that by casting a vote they somehow hold the EU accountable. It is far more important to hold governments and EU institutions accountable by having access to information on government voting positions and the basis for these, as well as a right to vote on substantive matters. The UK’s referendum condition goes beyond what some of the more active legislatures in 89 member states are required to do. It may allay public concern at increased powers of EU 87

See The EU Act § 6(5)(b), sch. 1.

88

See ESM Treaty Temporary Injunctions, Case No. 2BvR 1390/12 (Sept. 12, 2012); see also ESM Treaty Decision, Case No. 2BvR 1390/12 (Mar. 18, 2014), at paras. 124–28. 89

In Germany only prior legislative approval is necessary for participation in decisions under Article 48(7) TEU and Article 352 TFEU; see Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, para. 409 (June 30, 2009),

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institutions and politicians’ fickleness in reneging on referendum promises for significant 90 transfer of sovereignty. But, by setting a wide referendum trigger, it achieves the opposite effect of democratic accountability. Voting on technical areas inconsequential to UK constitutional law may lead to voter apathy, low turnouts, and further distancing from 91 EU matters. Formulation of the referendum question and the information available will 92 be crucial to ensuring public understanding. C. Constitutional Principles National consent on its own does not provide an adequate basis for accountability of supranational decisions. For this, we must look to EU constitutional principles. While there is no formal document referred to as the “EU Constitution,” the founding treaties are now consolidated into the TEU and the TFEU (“Treaties”). These Treaties contain principles 93 forming the basis for the EU’s continuation, representing constitutional principles. As a properly functioning and justifiable legal order, the EU must remain accessible, applicable 94 and effective. Accessibility means the law should be practicable and available to the public in a form that is clear. This can range from seeking national approval and correct transposition into domestic law to accurate translation of EU legislation into the https://www.bundesverfassungsgericht.de/entscheidungen/es20090630_2bve000208en.html. Contrast with the Czech Republic, which does not require prior parliamentary approval for use of Article 352 TFEU or Article 48(7) TEU; Ústavní soud České republiky dne 26.11.2008 (ÚS) [Constitutional Court] [Decision of the Constitutional Court of Nov. 26, 2008], sp.zn PI. ÚS 19/08, paras. 150, 165 (Czech). 90

The UK government reneged on an election promise to hold a referendum on the proposed 2004 Constitution Treaty. This was unsuccessfully challenged in R (Wheeler) v. Office of the Prime Minister [2008] EWHC 1409 (Admin). On 16 July 2008, the UK ratified the watered down version of a constitution under the Lisbon Treaty without holding a referendum. 91

UK turnout at the June 2009 European Parliamentary elections was thirty-four-point-five percent compared to forty-three percent across the EU as a whole. Historically, UK turnouts tend to be lower than the EU average as well as being lower than other types of election in the UK. See The European Parliamentary and Local Government Elections June 2009: Report on the Administration of the 4 June 2009 Elections (The Electoral Commission: October 2009), 24–26, http://www.electoralcommission.org.uk/__data/assets/pdf_file/0006/81483/047-elections-reportfinal-web.pdf. 92

For example, see concerns about rules governing referendum campaigns in Ireland, Mendez & Mendez, supra note 31, at 227. 93 94

See PRINCIPLES OF EUROPEAN CONSTITUTIONAL LAW (Armin Von Bogdandy & J. Bast eds., 2009); Craig, supra note 6.

See S. and Marper v. United Kingdom, App. No. 30562/04 and 30566/04 (Apr. 12, 2008), http://hudoc.echr.coe.int/; see also Joined Cases C-465/00, C-138/01, and C-139/01, Rechnungshof v. Österreichischer Rundfunk and Others and Christa Neukomm and Joseph Lauermann v. Österreichischer Rundfunk, 2003 E.C.R. I-5014.

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appropriate language of the member state. Applicability means the law must be relevant and valid to a given situation in a member state without necessarily requiring domestic 96 implementation. Effectiveness involves making the law justiciable so that EU citizens 97 have domestic remedies for breaches of law or violations of rights. Accessibility, applicability and effectiveness can be seen through constitutional principles of citizenship, 98 political rights and democracy. I. The Concept of Citizenship and Rights The 1992 Treaty of Maastricht (i.e. the TEU) introduced the concept of EU citizenship for 99 the first time. The EU took on a distinctly political and cultural character by defining a geographical area consisting not only simply of member states but also of citizens. The Treaties subsequently developed the meaning of citizenship from the “four freedoms”— namely, the movement of persons, goods, capital, and services—espoused in the original 100 treaties. Under Article 20(1) TFEU, citizenship means every person who is a national of a 101 member state is also a citizen of the EU. While nationality is a matter for each member 102 state to determine, once recognized, the individual automatically has EU citizenship. Every EU citizen has the following rights: to move and reside in another member state; to vote and stand as a candidate in municipal and European Parliamentary elections; to diplomatic and consular protection in a third state where their state of nationality has no 95

See TEU art. 12; see also TFEU art. 197(1)–(2); see also TEU protocol no. 1; Regulation 1049/2001 (public access to EU institutions’ documents): Recital 15, Arts. 2(1), 14(2); Art. 29 of the Rules of Procedure of the Court. 96

See TFEU arts. 18, 21, 28, 30, 34, 35, 49, 56, 110.

97

See direct effect in Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, 1963 E.C.R.; incidental direct effect in C-194/94, CIA Security International, 1996 E.C.R. I-2201; indirect effect in Case 14/83 Von Colson and Kamann, 1984 E.C.R. 1891; and state liability in Case C-6 & 9/90, Francovich v. Italy, 1991 E.C.R. I5357. 98

See Michael Dougan, The Constitutional Dimension to the Case of Union Citizenship, 31 EUR. L. REV. 613 (2006); see also Neil MacCormick, Democracy, Subsidiarity and Citizenship in the European Commonwealth, 16 L. & PHIL. 331 (1997). For a contrasting view that citizenship has had “integrative” rather than “constitutive” effects see Jo Shaw, Citizenship: Contrasting Dynamics at the Interface of Integration and Constitutionalism, in THE EVOLUTION OF EU LAW 608–09 (Paul Craig & Grainne De Burca eds., 2011). 99

See TEU art. 9; see id. Preamble; see also TFEU art. 20(1).

100

See id. art. 45(1) (freedom of movement for workers); see also Title II TFEU (free movement of goods); see also TFEU art. 63(1) (movement of capital); see also TFEU art. 56 (freedom to provide services). 101 102

See TFEU art. 20(1). See Case C-369/90, 1992 E.C.R. I-4239; see also Case C-135/08, Rottman v. Bayern, 2010 E.C.R. I-1449.

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representation; and to petition the European Parliament, apply to the European 103 Ombudsman, and address EU institutions and advisory bodies. These rights are replicated under Articles 39 to 46 on the Charter of Fundamental Rights of the European 104 Union (“the Charter”). Citizenship and rights are part of the foundation for creating an ever closer union among 105 the peoples of Europe. Articles 1, 3(2), and 3(5) TEU refer to the “citizen.” Article 1 identifies the TEU as marking “a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as 106 closely as possible to the citizen.” Under Article 3(2), EU citizens have “an area of freedom, security, and justice without internal frontiers, in which free movement of 107 persons is ensured.” Article 3(5) obliges the EU to protect its citizens in relations with 108 non-member states. From these three provisions, it is clear that the status of citizen confers certain discernible rights: transparency and accountability of decision-making; access to an area where there is free movement; and diplomatic and consular protection. These rights are all predicated on the individual and there is a sense of individualism in the 109 values and principles espoused under the Treaties. The principle of democracy, as envisaged under the Treaties, is the basis for understanding EU citizens’ individual political rights. II. The Principle of Democracy and Political Rights 110

Democracy is a founding value and principle enumerated throughout the Treaties. The EU is founded on representative democracy and Title II of the TEU devotes a section to 111 “Provisions on Democratic Principles.” Looking at these provisions, it becomes clear that 103

See TFEU arts. 20(2), 21–24.

104

See The Charter of Fundamental Rights of the European Union arts. 39–46, Oct. 26, 2012, 2012 O.J. (C 326) [hereinafter The Charter]. 105 106 107 108 109 110 111

See TEU arts. 1, 3(2), (5). See id. art. 1. See id. art. 3(2). See id. art. 3(5). See id. Preamble, Arts. 1, 3(2); see also TFEU arts. 20(1), 20(2)–24; see also The Charter Preamble. See TEU Preamble arts. 2, 9–12. See TEU art. 10(1).

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“peoples” and “individuals” are complementary categories: Peoples of the Union are the 112 peoples of each member state and individuals are EU citizens. This has been referred to as a “dual structure of democratic legitimation” whereby the EU is accountable to both 113 individuals and peoples. Under Article 10(2) TEU, citizens are directly represented in the 114 European Parliament. MEPs are representatives of EU citizens and are elected once 115 every five years by direct universal suffrage in a free and secret ballot. Also under Article 10(2) TEU, peoples of member states are represented in the European Council by their heads of state or government and in the Council by their governments, which are 116 themselves democratically accountable either to their national parliaments or citizens. The role of national parliaments is also seen as a fundamental principle of democracy 117 under Article 12 TEU. So EU decision-making and functioning is on the basis of representative democracy with direct and indirect links to individual citizens in member states. These links can be seen through the exercise of political rights and operations of EU institutions. 1. Right of Participation Apart from democratic participation, which takes place at the national level, there is an additional layer of participation operational at the EU level. Every EU citizen has the right 118 to participate in the democratic life of the EU. Participation is on the basis of equality and transparency. In all its activities, the EU is obliged to observe the principle of equality 119 of its citizens, and EU institutions must treat citizens equally. This principle is not restricted to individuals. Representative associations must also be given the opportunity to 120 make known and publicly exchange their views in all areas of EU action. Popular vote 112

See id. arts. 9–12.

113

Armin Von Bogdandy, The European Lesson for International Democracy: The Significance of Articles 9–12 EU Treaty for International Organisations, 23 EUR. J. INT’L L. 315, 322 (1998). 114 115 116 117 118 119 120

See TEU art. 10(2). See id. arts. 14(2)–14(3). See id. art. 10(2). See id. art. 12. See id. art. 10(3). See id. art. 9. See id. art. 11(1).

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decision-making is also considered part of democratic participation; for example, if there are at least one million EU citizens who are nationals of a significant number of member states, they can propose new legislation to the European Commission (“the 121 Commission”). This is similar to UK e-petitions requiring 100,000 signatures for an issue 122 to be considered for debate in the House of Commons. Since 1 April 2012, Regulation 123 No. 211/2011 applies setting rules and procedures for popular vote decision-making. A working group of experts was established in 2011 to exchange views, know-how, and best 124 practice on the tasks to be carried out by the member states. To date, the Commission has received twenty-seven requests to register proposed initiatives on unconditional basic income, high-quality education for all, media pluralism, 125 and voting rights. Right2Water, under the slogan “water is a public good, not a commodity,” was the first citizen-based initiative to achieve one million signatures for legislation to implement and to promote the right to water and sanitation as an essential 126 public services for all. Although this citizen-based initiative attracted enough support across member states to place it on the Commission’s agenda, it ultimately failed to convince the Commission of the need for legislative reform. Campaigners were misguided in their understanding of existing EU legislation in calling for water services to be exempt from internal market liberalization rules when water services were already exempt as 127 “services of general economic interest.” A recent pro-life and anti-abortion citizens’ initiative, “One of Us,” called for the EU to “ban and end the financing of activities which presuppose the destruction of human embryos, in particular in the areas of research, 121

See id. art. 11(4).

122

This is a government initiative and is not provided for under statute. Ten thousand signatures get a response from the government. One hundred thousand signatures mean the petition will be considered for debate in Parliament. See Petition Parliament and the Government, GOV.UK (July 20, 2015), https://www.gov.uk/petition-government. 123

Commission Regulation No. 211/2011, 2011 O.J. (L 65), recitals 5–6, arts. 3(4), 7(2) (voting requirements); 3(2), 4, 5, 8, 9 (organizers’ duties); 8 (certification duties of member states); 10–11 (Commission’s duties). 124

See the expert group’s report of Dec. 2, 2014, MEETING OF THE EXPERT GROUP ON THE CITIZENS' INITIATIVE, available at http://ec.europa.eu/citizens-initiative/public/legislative-framework. 125

See European Commission, Under Article 25 TFEU: On Progress Towards Effective EU Citizenship 2011–2013, at 7–8, COM (2013) 270 final (May 8, 2013) [hereinafter 2013 Article 25 Report]. 126

European Citizens’ Initiative Hits 1 Million Signatures, EUROPEAN COMMISSION (Feb. 11, 2013), www.europa.eu/rapid/press-release_IP-13-107_en.htm; see also Water and Sanitation are a Human Right!, www.right2water.eu/ (last visited Aug. 2, 2015). 127

Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on Services in the Internal Market, 2006 O.J. (L 376), art. 17(1)(d).

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763 129

development aid and public health.” The Commission rejected this one as well. These initiatives illustrate both the limitations of popular vote decision-making where there is lack of understanding of EU law and the potential for initiatives to be hijacked by narrow political interests. The right to participate includes being able to inform, debate, and vote on European issues. Awareness and understanding of European issues is stimulated through open and transparent discussion, access to information and active engagement. Recent CJEU decisions have upheld the right of citizens and national parliamentarians to access information regarding member states’ negotiating positions and proposals for legislative 130 amendments. It is also the responsibility of EU institutions and stakeholders to create 131 political awareness and inform the public. According to Article 10(4) TEU, political parties at the European level contribute to forming political awareness and to expressing the will of citizens of the Union. How do political parties create awareness? MEPs should be properly informed on EU affairs and debates of the European Parliament. They must then properly and accurately convey and disseminate such information to EU citizens. Evidence suggests otherwise: Sixty-eight percent of EU citizens do not feel sufficiently informed, and seventy-four percent of people with a negative view of the EU admit that 132 they are not well informed. TV is the most popular medium for dissemination of information, but “national TV channels often report on European topics from a national 133 point of view for a national audience.” The Commission recognizes that “providing citizens with information about European issues from a European point of view, but also

128

Communication from the Commission on the European Citizens’ Initiative “One of Us,” at 15, COM (2014) 355 final (May 28, 2014). 129

Id. at 17–19. The Commission concluded legislative amendments were not necessary because: (1) The 2012 Financial Regulation complies with EU primary legislation protecting human dignity, the right to life, and the right to the integrity of the person; (2) the 2013 Horizon 2020 Regulation provisions on human embryonic stem cell research comply with the EU Treaties and the Charter of Fundamental Rights of the European Union; and (3) the existing legal framework for development cooperation enables managing development funding in a way that helps minimize abortions in developing countries, and a funding ban would undermine other objectives, such as maternal health. See id. 130

C-280/11P, Council v. Access Info Europe (Oct. 17, 2013), http://curia.europa.eu; Case C-350/12P, Council v. in ’t Veld (July 3, 2013), http://curia.europa.eu. 131

See TEU art. 10(4).

132

See European Commission, EU Citizenship Report 2013, at 24, COM (2013) 269 final (May 8, 2013) [hereinafter EU Citizenship Report 2013]. 133

Id.

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from a range of national perspectives from other member states, could increase the 134 European public space and contribute to a more informed democratic debate.” 2. Transparency and Accountability of Decision-Making Transparency of decision-making is upheld by EU decisions being taken as openly and as 135 closely as possible to the citizens. EU institutions are obliged to maintain an open, 136 transparent, and regular dialogue with representative associations and civil society. The Commission has a particular responsibility to ensure EU actions are coherent and 137 transparent by carrying out broad consultations with parties concerned. There are a number of specific treaty provisions that give effect to transparency. Article 16(8) TEU requires the Council to meet in public when it deliberates and votes on a draft legislative 138 act. There is a general obligation for EU institutions to provide reasons for their 139 decisions; this is supported by the right to good administration under Article 41 of the 140 Charter. EU decisions are subject to judicial review under Article 263 TFEU, and in a number of cases the CJEU has found an EU institution to lack competence, infringe a treaty 141 rule, or misuse its powers. 142

Under Article 296 TFEU, decisions on new legislation must be based on stated reasons. With the prerogative to initiate new legislation, the Commission is obliged to explain and 143 justify the need and relevance of proposed legislative acts. If the flexibility clause under 134 135 136 137 138 139 140

Id. at 24–25. See TEU art. 10(3). See id. art. 11(2). See id. art. 11(3). See id. art. 16(8). Case T-85/94, Eugénio Branco v. Comm’n, 1995 E.C.R. II-45. The Charter art. 41.

141

See TFEU art. 263. See also Case C-327/91, France v. Comm’n, 1994 E.C.R. I-1409 (finding that the Commission lacked competence to conclude an international agreement); Case 17/74, Transocean Marine Paint Association v. Comm’n, 1974 E.C.R. 1063 (finding that the Commission decision violated a procedural requirement to allow right of reply); Case 105/75, Giuffrida v. Council Case, 1976 E.C.R. 1395 (finding that the Council of Ministers’ decision to appoint a principal administrator was a misuse of powers). 142 143

See TFEU art. 296. See TEU protocol no. 2.

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Article 352 TFEU is invoked to introduce new legislation, it must inform national parliaments of such proposals to enable subsidiarity monitoring under Article 5(3) TEU and Protocol (No. 2) on the Application of the Principles of Subsidiarity and Proportionality 144 (“Protocol No. 2”). The Commission has an obligation to provide reasoned opinions prior to enforcement action against member states for breach of treaty obligations. In the reasoned opinion of June 2013, Belgium, Cyprus, Czech Republic, Portugal, and Romania were directed to 145 comply with Directive 2009/119/EC to maintain minimum stockpiles of crude oil. In these instances, an administrative stage allows for the alleged offending state to negotiate and exchange opinions with the Commission prior to the commencement of legal 146 proceedings. If the state fails to comply, the Commission must satisfy procedural justice by producing a reasoned opinion setting out the grounds of complaint to enable the state 147 to prepare a defense and rectify the breach within a timeframe. On occasion, the Commission has been in breach of procedural justice by commencing proceedings after the 148 member state complied with the reasoned opinion. The right of EU citizens to complain to the European Ombudsman (“the Ombudsman”) about maladministration in the activities of EU institutions, bodies, offices, and agencies is 149 a means of raising transparency and accountability issues. The most common focus of the Ombudsman’s inquiries is lack of transparency in EU administration. In 2012, twentyone and a half percent of cases were transparency-related, as compared with thirty-three 150 percent in 2010 and twenty-five percent in 2011. In relation to the right to petition the 144

See TFEU art. 352(2); TEU protocol no. 2.

145

See June 2013: Belgium, Cyprus, Czech Republic, Portugal, and Romania Are Called Upon to Comply with EU Rules on Oil Stocks, EUROPEAN COMMISSION, available at https://ec.europa.eu/energy/en/june-2013-belgiumcyprus-czech-republic-portugal-and-romania-are-called-upon-comply-eu-rules-oil (last visited Aug. 3, 2015); see also June Infringements Package: Main Decisions, European Commission 7 (June 20, 2013), http://ec.europa.eu/energy/sites/ener/files/documents/MEMO-13-583_EN.pdf. 146

See TFEU art. 258. The Commission will attempt to resolve matters informally. If the matters remain unresolved, the Commission will issue a letter of formal notice requesting a response from the member state. 147

See Case C-1/00, Comm’n v. France, 2001 E.C.R. I-9989, para. 54; Case C-230/99, Comm’n v. France, 2001 E.C.R. I-1169, para. 31. 148

Case C-439/99, Comm’n v. Italy, 2002 E.C.R. I-305, para. 17; Case C-362/90, Comm’n v. Italy, 1992 E.C.R. I02353, para. 9. 149 150

See TFEU art. 228; 2013 Article 25 Report, supra note 125, at 7. See 2013 Article 25 Report, supra note 125, at 7.

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European Parliament, one of the most common subject matters for petitions is 151 fundamental rights and justice. III. EU as Protector of Rights EU institutions have a monitoring and legislative role in relation to rights, enabling consistency and uniformity in application and implementation. Because these rights derive from the Treaties, it also makes sense to have supranational oversight. Thus, decisionmaking authority derives from upholding and protecting rights, representing Majone’s 152 “autonomous legitimacy” argument. There are various examples of the protector role under the Treaties. 1. Oversight Responsibilities of the Commission As an impartial supranational body, to the extent that it is not composed of member state representatives, the Commission can be seen in its key role of standard-setting across the EU. It is entrusted with several oversight responsibilities. First, it promotes the general interest of the EU, takes appropriate initiatives to that end, and ensures application of the Treaties and measures adopted by EU institutions. This includes overseeing the application 153 of EU law under the control of the CJEU. Second, it oversees the application of citizenship and rights throughout the EU. Every three years, it must compile a report on the application of citizenship and rights for the European Parliament and Council. On the basis of this report, the Council may adopt provisions to strengthen or add to rights in Article 154 20(2) TFEU. Third, it steers EU-wide standard-setting by making legislative proposals that 155 may become legislative acts adopted by the European Parliament and Council. The Commission’s 2013 Report points to areas of concern for application of citizenship rights. In relation to electoral rights, the Commission has pursued dialogues with member states regarding transposition of Directive 94/80/EC, the right of EU citizens to participate in municipal elections, and Directive 93/109/EC, the right of EU citizens to participate in 156 European elections. As a result, the member states concerned amended their legislation 151 152 153 154 155 156

Id. See Majone, supra note 7, at 20–24. See TEU art. 17(1). See TFEU art. 25. See TEU art. 17(2). See 2013 Article 25 Report, supra note 125, at 6.

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or announced amendments to comply with EU law. Eleven member states were contacted about not allowing non-national EU citizens to found or become members of 158 political parties, contrary to Article 22 TFEU. While four member states clarified the situation, adopted national legislation in line with EU law, or announced amendments, the 159 Commission took action against the seven remaining member states. The Commission recommends member states adopt targeted measures to stimulate citizens’ participation 160 in municipal elections and increase turnout. In preparation for the 2014 European elections, the Commission produced a communication and recommendation aimed at strengthening the European dimension to European elections, increasing efficiency and 161 reducing the administrative burden. In relation to consular protection rights, the Commission has launched a dedicated 162 website. In 2011, it also adopted a proposal for a Directive on consular protection for Union citizens abroad. This aims to establish clear and legally binding rules on cooperation and coordination between member states’ consular authorities to ensure unrepresented EU citizens have non-discriminatory access to consular protection from other member states’ diplomatic or consular representations in a third country. 2. Legislative Functions of the European Parliament and the Council In the exercise of their legislative functions, the European Parliament and Council (“the legislature”) can be seen as protectors of citizens’ rights. As mentioned above, the Council 163 may adopt provisions to strengthen or add to citizens’ rights. The legislature also promotes and protects the development and exercise of rights in a number of ways. It may 157 158 159

Id. Id. Id.

160

See European Commission, On the Application of Directive 94/80/EC on the Right to Vote and to Stand as a Candidate in Municipal Elections by Citizens of the Union Residing in a Member State of Which They Are Not Nationals, at 5, COM (2012) 99 final (Mar. 9, 2012). 161

See European Commission, Preparing for the 2014 European Elections: Further Enhancing Their Democratic and Efficient Conduct, COM (2013) 126 final (Mar. 12, 2013); Commission Recommendation No. 2013/142/EU, of 12 March 2013 on Enhancing the Democratic and Efficient Conduct of the Elections to the European Parliament, 2013 O.J. (L 79) 29. 162

See Consular Protection for European Union Citizens Abroad, EUROPEAN COMMISSION, available at http://ec.europa.eu/consularprotection/en/content/home (last visited Aug. 3, 2015). 163

See TFEU art. 25.

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adopt rules designed to prohibit discrimination on the grounds of nationality. It may take appropriate action to combat discrimination on other grounds—sex, race, ethnicity, 165 religion, disability, age, or sexual orientation. Although free movement of persons is an area of shared competence under Article 4(2)(a) TFEU, if action should prove necessary, the legislature may adopt provisions to facilitate the exercise of the right to move and 166 reside. It is obliged to issue directives or make regulations setting out measures required 167 to bring about freedom of movement of workers. The exercise of the right to vote is subject to detailed arrangements by the Council, which may provide derogations for 168 specific member states. On 20 December 2012, the Council adopted Directive 2013/1/EU, making it easier for EU citizens to stand as candidates in the 2014 European elections by only requiring production of an identity document and eligibility 169 declaration. The Council may adopt directives establishing cooperation and coordination 170 measures necessary to facilitate diplomatic and consular protection. The legislature is obliged to adopt provisions for procedures and conditions required for the citizens’ 171 initiative, as it has already done by adopting Regulation No. 211/2011. The right to vote is a key political right that requires further consideration by the legislature. At the moment, non-national EU citizens residing in member states cannot vote in national elections as Article 20(2)(b) TFEU only provides for the right to vote in municipal 172 and European Parliament elections. This curtails the level of democratic participation in their country of residence even when the individual has lived there for an extended period of time, perhaps establishing professional, personal, and social ties. Double voting— namely, voting in the country of nationality as well as the country of residence—is 164 165 166 167 168

See id. art. 18. See id. art. 19(1). See id. art. 21(2). See id. art. 46. See also id. arts. 21(3), 48 (enumerating Council powers for social security). See id. arts. 22(1)–22(2).

169

See Council Directive No. 2013/1/EU, of 20 December 2012 Amending Directive 93/109/EC as Regards Certain Detailed Arrangements for the Exercise of the Right to Stand as a Candidate in Elections to the European Parliament for Citizens of the Union Residing in a Member State of Which They Are Not Nationals, 2012 O.J. (L 26), 27. 170 171 172

See TFEU art. 23. See Commission Regulation No. 211/2011, 2011 O.J. (L 65). See TFEU art. 20(2)(b).

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prevented under the assumption that individuals retain the right to vote in their country of nationality. But it may cause double jeopardy as Malta, Cyprus, Denmark, the UK, and 173 Ireland apply disenfranchisement policies to nationals residing in other member states. Without the right to vote in the country of residence, EU citizens would be denied a fundamental political right by virtue of exercising their right to free movement. This raises interesting questions about member state control over nationality, the substance of EU citizenship, and whether there is a right of choice. On the one hand, member states have discretion to determine nationality criteria, which may include the need to show a strong and continuing link with the country of nationality to benefit from national voting rights. On the other hand, political rights are fundamental to EU citizenship enabling democratic participation at the local, regional, national, and EU level. A person’s nationality is not weakened or removed when they reside in another member state. If this were the case, it would undermine the principle of nondiscrimination and allow disparity of rights throughout the EU with a notion of diminished citizenship. Arguably, the non-resident national may maintain stronger political ties to the country of nationality than a resident national. The former may actively seek to maintain the right to vote, whereas the latter may or may not be politically engaged by, for example, choosing not to vote. The reverse may also apply. A non-resident national may establish stronger political ties in the country of residence and therefore wish to vote in national elections there. A right of choice between voting in the country of nationality or country of residence would prevent double voting and double jeopardy. This offers a solution to public opinion supportive of maintaining the right to vote in the country of nationality, and 174 having a right to vote in the country of residence. The Commission identified this as an area for strengthening citizenship rights under Article 25 TFEU, and recently recommended discontinuation of disenfranchisement policies to allow citizens the right to vote if they can 175 demonstrate “a continuing interest in the political life in their country.”

173

See R (on the application of James Alistair Preston) v. Lord President of the Council, [2012] EWCA (Civ) 1378, [2013] Q.B. 687 (Eng.) (rejecting a UK national’s right to vote after living in Spain for over 15 years). See also Parliamentary Election Act of Denmark, 2009, pt. 1(2)(3) (allowing Danish citizens leaving the country to remain on the electoral roll only if they have registered their intention to return within two years). 174

In 2013, sixty-five percent of EU citizens favored not losing the right to vote in the citizen’s country of nationality; sixty-seven percent favored non-national EU citizens having the right to vote in the citizen’s country of residence. See EU Citizenship Report 2013, supra note 132, at 21–22. 175

See id. at 24; Commission Recommendation No. 2014/53/EU of 29 January 2014, Addressing the Consequences of Disenfranchisement of Union Citizens Exercising Their Rights to Free Movement, 2014 O.J. (L 32) 34.

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D. National Parliaments’ Pre-Legislative Controls The democratic principles listed in Title II of the TEU include involvement of national parliaments. Article 12 TEU identifies a number of ways in which national parliaments “contribute actively to the good functioning of the Union”: Reviewing draft legislative acts; guarding subsidiarity; participating in treaty revision procedures; participating in interparliamentary cooperation between national parliaments and the European Parliament; notification of accession applications; evaluating policies in the area of freedom, security, 176 and justice; monitoring Europol; and evaluating Eurojust. Protocol (No. 1) on the Role of National Parliaments in the European Union (“Protocol No. 1”) is intended to encourage greater involvement of national parliaments in EU activities and enhance their ability to 177 express views on draft legislative acts and other matters. National parliaments enjoy the support and consent of EU citizens providing accountability for these functions. They have three treaty-based roles that can act as powerful pre-legislative controls on EU decisionmaking: scrutinizing legislation; guarding subsidiarity; and exercising veto powers. I. Informed Scrutinizers Article 12(a) TEU provides that national parliaments contribute actively to the good 178 functioning of the EU by being informed and receiving draft legislative acts. In this regard, EU institutions are obliged to provide the following information: (1) Commission consultation documents, annual legislative programs, and any other instrument of legislative planning or policy; (2) draft legislative acts—including Commission proposals, initiatives from a group of member states, initiatives from the European Parliament, requests from the CJEU, recommendations from the European Central Bank, and requests from the European Investment Bank; (3) agendas for the outcome of Council meetings, including minutes of meetings on draft legislative acts; and (4) Court of Auditors annual 179 report. Once received, it is a matter for each parliament to decide how to scrutinize and whether to comment on proposals, especially draft legislative acts. It does, nevertheless, require a proactive approach in assuming the role of scrutinizer and setting up scrutiny 180 mechanisms, rather than acting as a mere repository. In this sense, national parliaments 176 177 178 179 180

See TEU art. 12. See id. protocol no. 1. See id. art. 12(a). See id. protocol no. 1., arts. 1, 2, 5, 7.

For a “holistic approach” to EU lawmaking and implementation involving active and responsible involvement by national institutions see Piqani, supra note 8, at 493. National court decisions have called for greater involvement of legislatures in scrutinizing EU legislation and as guardians of the balance of power between

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take the role of informed scrutinizers, participating in EU decision-making early on to check for potential conflicts with domestic law and to maintain the balance of power between the EU and member states. The inter-parliamentary cooperation system under Protocol No. 1 encourages dialogue between national parliaments and the European Parliament, allowing the former to collectively submit “contributions” for consideration by the European Parliament, the 181 Council, and the Commission. These contributions are not binding on national parliaments and do not prejudice their positions. They are an opportunity for exchange of information, agenda setting, and policy coordination. The 2006 Barroso Initiative was launched to enable political dialogue between the European Parliament and national 182 parliaments. In practice, it has enabled national parliaments to obtain draft legislative acts directly from the Commission and then to submit their opinions. This improves vertical political dialogue with the EU, but there is concern it is not having a similar impact on 183 horizontal political dialogue between national parliaments. While treaty provisions do not specifically state that national parliaments must act as informed scrutinizers, it would be counter-productive for democratically-elected representatives not to take up this opportunity as a means to ensure transparency and accountability in decision-making. Depending on the resources available, political interests, 184 and importance placed on scrutiny, each parliament’s role and level of scrutiny will vary. It demonstrates how EU decision-making is based on “multi-levelled democratic

member states and the EU. See Ústavní soud České republiky ze dne 26.11.2008 (ÚS) [Decision of the Constitutional Court of Nov. 26, 2008], sp.zn. Pl. ÚS 19/08, para. 165 (Czech); Bundesverfassungsgericht [BVerfG Federal Constitutional Court], Case No. 2BvE 2/08, para. 409 (June 30, 2009), https://www.bundesverfassungsgericht.de/entscheidungen/es20090630_2bve000208en.html. 181

See TEU protocol no. 1.

182

See European Commission, A Citizens’ Agenda: Delivering Results for Europe, at 9, COM (2006) 211 final (May 10, 2006). 183

Adam Cygan, The Parliamentarisation of EU DecisionMaking? The Impact of the Treaty of Lisbon on National Parliaments, 36 EUR. L. REV. 480, 494–95 (2011). 184

See European Commission, Annual Report 2012 on Subsidiarity and Proportionality, at 3, COM (2013) 566 final (July 30, 2013) [hereinafter Annual Report 2012]; ADAM CYGAN, THE UK PARLIAMENT AND EUROPEAN UNION LEGISLATION ch. 3 (1998); Klaus Goetz & Jan-Hinrik Meyer-Sahling, The Europeanisation of National Political Systems: Parliaments and Executives, 3 LIVING REV. EUR. GOV. (2008), http://europeangovernance.livingreviews.org/Articles/lreg-2008-2/download/lreg-2008-2Color.pdf; PHILIPP KILVER, THE NATIONAL PARLIAMENTS IN THE EUROPEAN UNION: A CRITICAL VIEW ON EU CONSTITUTION BUILDING 162–63 (2006).

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legitimation” and the potential for elected representatives to make the EU accountable. National parliaments acting as informed scrutinizers offer a degree of accountability and help shape public understanding of how the EU operates. II. Guardians of Subsidiarity

Article 12(b) TEU provides that national parliaments contribute actively to the good 186 functioning of the EU by acting as guardians of subsidiarity. This role is exercised in relation to the principle of subsidiarity under Article 5(3) TEU and the early warning system 187 under Protocol No. 2. Except for exclusive competence areas, subsidiarity applies to all shared or supported competence decisions. It determines at which level decisions should be made when there are multiple levels of decision-making authority—for example, local, regional, national, or supranational. In accordance with the Preamble and Article 1 paragraph 2 TEU and the Preamble to Protocol No. 2, decisions should be taken as closely 188 as possible to EU citizens, reinforcing the idea of democratic accountability. 1. Two-Stage Test for Subsidiarity Article 5(3) TEU provides a two-stage test of necessity and effectiveness for subsidiarity: EU action must be necessary because the proposed action’s objectives cannot be sufficiently achieved by member states; and, due to the scale or effects of the proposed 189 action, the objectives would be more effectively achieved by the EU. “Multi-leveled democratic legitimation” is apparent with involvement of EU institutions and national 190 parliaments. Decisions by EU institutions must take into account subsidiarity and demonstrate both how objectives for a proposed action cannot be sufficiently achieved by member states, and the extent or results of the proposed action means it is better achieved by the EU. This conforms with the requirement under Article 5 Protocol No. 2 for 185

Mattias Wendel, Lisbon Before the Courts: Comparative Perspectives, 7 EUR. CONST. L. REV. 96, 117 (2011). See also Ústavní soud České republiky ze dne 26.11.2008 (ÚS) [Decision of the Constitutional Court of Nov. 26, 2008], sp.zn. Pl. ÚS 19/08, para. 173 (Czech); Ústavní soud České republiky ze dne 03.11.2009 (ÚS) [Decision of the Constitutional Court of Nov. 3, 2009], sp.zn. Pl. ÚS 29/09, para. 138. 186 187 188

See TEU art. 12(b). See id. art. 5(3); id. protocol no. 2. See id. Preamble; id. art. 1; id. protocol no. 2, Preamble.

189

See European Commission, On Subsidiarity and Proportionality, at 2, COM (2008) 586 final (Sept. 26, 2008). For a single test approach, see Derrick Wyatt, Could a Yellow Card for National Parliaments Strengthen Judicial as Well as Political Policing of Subsidiarity, 2 CROATIAN Y.B. EUR. L. & POL’Y 1, (2006). 190

Wendel, supra note 185, at 117.

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subsidiarity appraisal of draft legislative acts, and the oversight role entrusted to national 191 parliaments under Article 6. Necessity and effectiveness must both be satisfied so that EU action may be a matter of degree rather than absoluteness. Member states’ action in a shared competence area may prove insufficient to tackle a cross-border dimension. An example is the 2012 Commission Proposal for a Regulation on the Right to Collective Strike (“Monti II Regulation”) intended to tackle cross-border dimensions to the right to collective action in relation to the 192 freedom of establishment and the freedom to provide services. Member states and the EU have applied the test differently. There is a debate around a broad interpretation with a presumption against EU action and a restrictive interpretation 193 in accordance with necessity and effectiveness without reference to proportionality. Treaty provisions support the latter approach where national parliaments are granted an oversight role only for subsidiarity and not proportionality, which is a matter for EU institutions to apply. Based on the Commission’s 2012 Report, national parliaments regard 194 subsidiarity as a legal principle subject to different interpretations and outcomes. The Commission published its own practice in applying standard criteria as guidance for 195 national parliaments. While recognizing the benefit of having standard compliance criteria, national parliaments want to maintain a margin of discretion. Political opportunism may influence subsidiarity monitoring to the detriment of a more strict 196 application of the two-stage test to focus on the merits of a proposed legislative act. 191

See TEU protocol no. 2, arts. 5–6.

192

Proposal for a Council Regulation on the Exercise of the Right to Take Collective Action Within the Context of the Freedom of Establishment and the Freedom to Provide Services, at 8, COM (2012) 130 final (Mar. 21, 2012). For the background to this proposal, see Mario Monti, A New Strategy for the Single Market (May 9, 2010), http://ec.europa.eu/internal_market/strategy/docs/monti_report_final_10_05_2010_en.pdf; European Commission, Towards a Single Market Act: For a Highly Competitive Social Market Economy, COM (2010) 623 (Oct. 27, 2010). 193

For a restrictive interpretation, see Federico Fabbrini & Katarzyna Granat, Yellow Card, But No Foul: The Role of the National Parliaments Under the Subsidiarity Protocol and the Commission Proposal for an EU Regulation on the Right to Strike, 50 COMMON MKT. L. REV. 115 (2013). For a broad interpretation, see Gareth Davies, Subsidiarity: The Wrong Idea, in the Wrong Place, at the Wrong Time, 43 COMMON MKT. L. REV. 63 (2006); Jukka Snell, ‘European Constitutional Settlement,’ an Ever Closer Union, and the Treaty of Lisbon: Democracy or Relevance?, 33 EUR. L. REV. 619, 627–30 (2008). 194

See Annual Report 2012, supra note 184.

195

See id. at 3–4, 10. For Commission criteria, see Commission Impact Assessment Guidelines, SEC (2009) 92 (Jan. 15, 2009). 196

See Jit Peters, National Parliaments and Subsidiarity: Think Twice, 1 EUR. CONST. L. REV. 68, 71 (2005).

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Nevertheless, if exercised properly, subsidiarity monitoring under the early warning system offers national parliaments a pre-legislative control over decision-making. 2. The Early Warning System The early warning system (“EWS”), under which national parliaments monitor subsidiarity compliance, is established by Protocol No. 2 with two distinct procedures: The “yellow card” procedure, under Article 7(2), obliges review of draft legislation deemed noncompliant by national parliaments; and the “orange card” procedure, under Article 7(3), 197 obliges review and, under certain conditions, withdrawal of the proposal. When an EU institution proposes a draft legislative act, this must be forwarded to all national parliaments with a detailed statement of the following: Compliance with subsidiarity and proportionality; assessment of financial impact; in the case of directives, implications for rules to be put in place by member states, including regional legislation; reasons for concluding that an EU objective can be better achieved at EU level, with qualitative and, where possible, quantitative indicators; and how any financial or administrative burden on the EU, national governments, regional or local authorities, economic operators, and 198 citizens will be minimized and commensurate with the objective to be achieved. National parliaments have eight weeks to scrutinize the draft legislative act, affording a degree of pre-legislative control over EU decision-making. During this period, the Council is not permitted to place the draft legislative act on its provisional agenda for adoption. After eight weeks, an additional period of ten days must elapse between placing the draft legislative act on the Council’s provisional agenda and the adoption of a position. In an urgent case where a draft legislative act needs to be agreed upon within the eight-week 199 period, the Council must give reasons for its position. If a national parliament considers the draft act does not comply with subsidiarity, it must submit a “reasoned opinion” to the Presidents of the European Parliament, the Council, or Commission, depending on who initiated the draft. Unlike the detailed statement attached to draft legislative acts, national parliaments are not required to provide a detailed explanation in their reasoned opinions. A statement of 200 why the draft legislative act does not comply with subsidiarity will suffice. Reasoned

197 198 199 200

See TEU protocol no. 2, arts. 7(2)–7(3). See id. protocol no. 2, arts. 4–5. See id. protocol no. 1, arts. 3–4. See id. protocol no. 2, art. 2.

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opinions can vary in substantive content and interpretation of subsidiarity. Such a wide margin of discretion counters arguments about the weakness of subsidiarity monitoring— namely, lack of resources or adequate time to consider proposals. It may also help foster horizontal political dialogue between national parliaments to coordinate their 202 responses. Some may be reluctant to challenge their government’s position with a 203 perceived lack of electoral benefit in doing so. But this is a matter for member states’ domestic accountability systems, which would exist irrespective of the opportunity to act as guardians of subsidiarity. 2.1 Obligation to Review Under the yellow card procedure, reasoned opinions count as votes and, if one third of all national parliaments’ votes conclude the draft legislation is non-compliant with subsidiarity, the initiating institution must review it. For draft legislative acts submitted under Article 76 TFEU on the area of freedom, security, and justice, the review threshold is 204 one quarter of all national parliaments’ votes. The initiating body “may decide to 205 maintain, amend, or withdraw” the draft legislation. There is no obligation for it to be withdrawn, but reasons must be given for any decision, ensuring accountability through transparent and open decision-making. This procedure was used for the first time in 2012 in relation to the Monti II Regulation with twelve reasoned opinions from national parliaments, representing nineteen votes, 206 against the Commission’s proposal. The Commission had consulted widely with relevant stakeholders and provided a detailed statement of subsidiarity compliance. But national parliaments considered the proposal did not comply with subsidiarity with reasons ranging from the legal basis of the proposal under Article 352 TFEU to non-compliance with 201

For an analysis of variation in reasoned opinions in the Proposed Monti II Regulation, see Fabbrini & Granat, supra note 193, at 115. 202

See Cygan, supra note 183, at 484.

203

See Ian Cooper, A ‘Virtual Third Chamber’ for the European Union? National Parliaments After the Treaty of Lisbon 10 (Centre for European Studies, ARENA Working Paper No. 7, 2011). For example, in 2015 the opposition Labour Party in the UK backed down from its original position not to hold an EU membership referendum, due to perceived public appetite for a referendum and the government’s intention to hold one. See Labour to Back EU Referendum Bill, Says Harman, BBC (May 24, 2015), http://www.bbc.co.uk/news/uk-politics-32863749. 204 205 206

See TEU protocol no. 2, art. 7(2). See id. See Annual Report 2012, supra note 184, at 6–7.

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proportionality. The Commission reviewed the proposal but found no breach of subsidiarity. In a remarkable concession to political accountability, it “took note of the views expressed by national parliaments” and recognized that the draft regulation “was unlikely to gather the necessary political support within the European Parliament and 208 Council to enable adoption.” The Commission withdrew the Monti II Regulation on 26 209 September 2012. This shows that simply attaining the review threshold can exert political influence. Even then, if the institution finds compliance with subsidiarity, pursuing legislation may be unwise if it is likely to encounter member state resistance. Some argue this sets a bad precedent for misuse of subsidiarity monitoring as the Commission found 210 no breach of subsidiarity. But it reflects how national parliaments act as pre-legislative filters testing political appetite before the Council and European Parliament make a decision. Representing a cross-section of society with a mandate to probe legislation in the wider public interest, parliamentarians engage in information-gathering, debates, deliberations, and in-depth reports or inquiries. These activities legitimize the decision-making process by being receptive to opposing views, competing interests, appraisal of socio-economic 211 impacts, and consultation with relevant stakeholders. In this sense, the filtering role is 212 constitutionally protected in member states, and a legitimate form of democratic accountability is provided under the Treaties.

207 208 209 210

See TFEU art. 352. For detailed analysis of reasoned opinions, see Fabbrini, supra note 193, at 115. Annual Report 2012, supra note 184, at 8. See id. See Fabbrini & Granat, supra note 193, at 115.

211

See cases on parliamentarians’ access to information. See, e.g., Case C-350/12P, Council v. in ’t Veld (July 3, 2013), http://curia.europa.eu; C-280/11P, Council v. Access Info Europe (Oct. 17, 2013), http://curia.europa.eu. 212

For the German Constitutional Court’s development of the concept of parliamentary responsibility owed to the people, see Bundesverfassungsgericht [BVerfG - Federal Constitutional Court], Case No. 2BvE 2/08, paras. 210, 243, 246–60 (June 30, 2009), https://www.bundesverfassungsgericht.de/entscheidungen/es20090630_2bve000208en.html. For the UK House of Lords, scrutinizing, influencing, and holding national governments accountable should be recognized as “core business” for national parliaments. See EUROPEAN UNION COMMITTEE, THE ROLE OF NATIONAL PARLIAMENTS IN THE EUROPEAN UNION, 2013–14, H.L. 151, at 11 (U.K.).

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2.2 Obligation to Withdraw The orange card procedure relates to Commission proposals for legislation under the ordinary legislative procedure. Where a simple majority of votes of national parliaments find non-compliance with subsidiarity, the Commission must review the proposal. Similar 213 to the yellow card, the Commission “may decide to maintain, amend or withdraw” it. Unlike the yellow card, however, if the Commission decides to keep the proposal, it will have to justify that proposal in a reasoned opinion which, along with national parliaments’ reasoned opinions, must be submitted to the European Parliament and the Council. They must then follow a two-stage process: First, reviewing subsidiarity compliance while taking into account reasoned opinions of national parliaments and the Commission; and second, withdrawing the proposal if either institution decides by a threshold number—fifty-five percent of Council members or a majority of votes in the European Parliament—that the 214 proposal is non-compliant. One criticism leveled against the EWS is that it does not have a “red card” procedure, 215 effectively a veto power, for national parliaments. The Working Group IV on the Role of National Parliaments, however, focused on ensuring effective early participation in scrutiny of legislation rather than setting up mechanisms for legislative delays. Constitutionally, national parliaments are not part of the EU legislature and the Working Group was 216 concerned to maintain institutional balance. A veto power could frustrate decisionmaking without adding any value to its effectiveness at the appropriate level. It may also exacerbate weak monitoring due to lack of time and resources. More stringent scrutiny requirements, including those for reasoned opinions, would be necessary to counter positions of the Council and the European Parliament in order to prevent legislation passing, potentially affecting the separation of powers within member states. III. Veto Powers National parliaments have an accountability brake, effectively a veto, under Article 48(7) 217 TEU, the passerelle clause. Under this clause the European Council may adopt a decision 213 214

See TEU protocol no. 2, art. 7(3). See id. art. 7(3)(a)–(b).

215

EUROPEAN SCRUTINY COMMITTEE, SUBSIDIARITY, NATIONAL PARLIAMENTS AND THE LISBON TREATY, 2007-8, H.C. 563, para. 36 (U.K.). 216

COUNCIL OF EUROPE WORKING GROUP IV, FINAL REPORT OF WORKING GROUP IV ON THE ROLE OF NATIONAL PARLIAMENTS, CONV 353/02, paras. 21–26, 33 (Oct. 22, 2002). 217

See TEU art. 48(7).

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authorizing the Council of Ministers to act by qualified majority voting instead of unanimity, or under the ordinary legislative procedure instead of a special legislative 218 procedure. But the European Council is obliged to inform national parliaments at least 219 six months before any such decision is adopted. If, within this period, a single national parliament makes known its opposition, the decision will not be adopted. Thus, any national parliament of a member state, acting on its own, can veto changes to voting procedures. They are not obliged to exercise this veto, and, in the absence of any opposition, the European Council may adopt the decision. An active, well-informed, and democratically-engaged parliament, however, should at least be aware of this power and its potential as a mechanism to hold EU institutions accountable for how they make decisions. The European Council does not exercise legislative functions and is a political body composed of heads of state or governments of member states that sets the EU’s 220 political directions and priorities. In this respect, for national parliaments, being informed about vetoing voting procedure changes is a step toward holding prime ministers and presidents accountable for how they make decisions at this level. Another veto power of national parliaments relates to the area of freedom, security, and justice. Specifically in relation to aspects of family law with cross-border implications, the Commission may propose the Council of Ministers adopt a decision to determine which aspects may be the subject of acts adopted under the ordinary legislative procedure. Before any decision is taken, however, national parliaments must be notified of such a proposal and if a single national parliament opposes within six months of receiving the 221 notification, the decision is not adopted. As with Article 48(7) TEU, exercise of the veto does not require acting in concert with others; one parliament’s opposition is enough for 222 the decision to fail. The difference with this provision is that it actually involves national parliaments deciding on a competence issue, albeit a limited one relating to cross-border family law matters, rather than voting procedures. In exercising this power, national parliaments review whether a given family law matter should come under supranational decision-making. A seemingly discrete area of law could attract high levels of public interest on issues such as child abduction, protection of children’s rights, and even mutual recognition of same-sex relationships, which would all require cooperation between member states. Equally, aspects of family law may be too sensitive and form part of 218 219 220 221 222

Art. 294 TFEU sets out the procedure that involves the European Parliament. See TEU protocol no. 1, art. 6. See id. art. 15. See TFEU art. 81(3). See TEU art. 48(7).

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national identity such that member states will want to maintain their decision-making autonomy. E. Conclusion EU treaties are international treaties by which member states agree to be bound once they formalize national consent through ratification. Both at the candidate stage and throughout membership, states are obliged to implement legislation and amend laws to comply with EU law. Member states have used a range of domestic pre-legislative controls on consent, especially as regards membership enlargement or major treaty revisions. Prior parliamentary approval, either in the form of statute enactment or formal vote, is the most prevalent form of pre-legislative control. Even in Germany and Poland, with an advanced understanding of democratic participation and constitutional provisions on referendums respectively, referendums are still not invoked as a pervasive pre-legislative control. By contrast, the UK’s EU Act makes future EU law not only subject to parliamentary approval, but also to a referendum. Such extensive use of referendums is a clumsy brake on internal voting procedures, hindering efficient decision-making and representing a hollow sense of empowerment for citizens. Voting on technical areas can lead to voter apathy, low turnouts, and further distancing the public from EU matters. It is far more important to hold governments and EU institutions accountable by granting the public access to information on government voting positions and their basis, while still giving the public a right to vote on more substantive matters. Ironically, the UK is precipitating a wider democratic deficit in the EU by effectively vetoing the opportunity for other member states to progress towards further integration. This is counterproductive as it raises doubts about the UK’s ability to act in good faith, leading to isolation and loss of the credibility to influence decision-making. Alternatively, the other twenty-seven member states could decide to develop closer integration measures excluding the UK so that EU decision-making is not adversely affected. Constitutional principles of citizenship, democracy, and political rights further democratic accountability. Supranational decision-making is based on a representative democracy with direct and indirect accountability to citizens in member states. The right to participate in the democratic life of the EU and democratic principles of transparency and open decisionmaking make this possible. However, recent examples of citizen-based initiatives under Article 11(4) TEU illustrate the limitations of popular vote decision-making where there is lack of understanding of EU law and potential for initiatives to be hijacked by narrow 223 political interests. Of far greater significance is the CJEU’s recognition that effective participation in the political life of the EU includes the right of citizens and national 223

See id. art. 11(4).

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parliamentarians to access information regarding member states’ negotiating positions and proposals for legislative amendments. The EU’s protector role in upholding rights, especially through the Commission’s oversight responsibilities and the legislative functions of the European Parliament and the Council, justifies supranational decision-making. An internal system of accountability exists with the European Parliament and the Council of Ministers approving the Commission’s legislative proposals. It is in the area of scrutinizing draft legislative acts and proposals that national parliaments can have the greatest impact on accountability. Representing one of the few mechanisms for direct accountability to elected representatives of member states, subsidiarity monitoring under the EWS is a powerful pre-legislative control with the potential to block legislation. Member states’ approach to the subsidiarity test varies, as does the substance of their reasoned opinions. But this is partly due to lack of uniform scrutiny requirements, and a desire to maintain a margin of discretion. Defeat of the proposed Monti II Regulation shows what can be achieved when national parliaments coordinate reasoned opinions, and act as filters testing political appetite for new legislation. Representing a cross-section of society with a mandate to probe legislation in the wider public interest, parliamentarians engaged in a variety of scrutiny activities legitimize the decision-making process, thus fulfilling a national constitutional and treaty-based role.

Articles Why Teach Legal Theory Today? By Guilherme Vasconcelos Vilaça*

Abstract Is legal theory relevant to legal practice? Should legal theory be part of the academic legal curriculum? This article outlines three propositions in relation to these longstanding contentious questions. First, it argues that existing literature has pursued an inadequate argumentative strategy by (1) assuming that there is a single yes or no answer to the questions surrounding the relevance of legal theory; and (2) treating legal theory and legal practice as discrete, unrelated entities. This article distinguishes between different styles of doing legal theory and legal practice, and argues that the role of legal theory needs to factor in changes in the substance of law, legal reasoning, and legal careers. Second, focusing on European civil law countries, this article concludes that most legal theory is irrelevant for conventional legal practice. Concomitantly, it suggests that the constitutionalization, transnationalization, and Europeanization of legal systems are changing the practice of law in a way that is more congenial to theory than hitherto. It also contends that legal roles embodying a legislative standpoint within law are creating a demand for increased theoretical sophistication. Third, this article suggests what a course in legal theory, sketched along the lines of the analysis carried out, might look like.

*

Lecturer in Law, Xi’an Jiaotong University School of Law and Guest Research Fellow at the University of Lisbon Research Centre for Public Law, [email protected]. This paper was long in the making. It was triggered by a couple of job interviews in which I was asked to speak about the role of legal theory within legal practice and legal education. I thank Dennis Patterson for saying out loud, in an exchange, what I always knew intuitively: Most legal theory is useless for legal practice. I owe Tuomas Tiittala, Walter Rech, and Marina Lostal for their deep and incisive comments to the paper as well as for countless discussions on legal education. The paper greatly benefited from Nicola Field’s expert editing. All errors remain mine.

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A. Background Students, teachers, and established practitioners alike often hate legal theory. The premise behind this abhorrence is that legal theory has little or no value within legal practice and is 1 thus only useful to obscure minds interested in prima facie esoteric questions. The words of Denis Browne, a professor of jurisprudence, are familiar enough: “I cannot see my way to argue that the study of Jurisprudence is a necessary preliminary to the successful and competent conduct of a professional practice; the facts seem irreconcilable with such a 2 contention.” This view is perhaps especially justified given the contents of European teaching on legal theory. The typical legal theory course, compulsory or elective, focuses on some of the following questions: the nature of law; the status and evolution of legal science; the historical relationship between law and justice and law and morality; and the concepts of legal system and legal validity as well as basic concepts such as rights, obligation, and duty. Canonically, students read Austin, Kelsen, Hart, Dworkin, Marxism, natural law, critical 3 legal studies, and perhaps some authors from Scandinavian legal realism. Given this list, one is presumably entitled to ask what (practical) good comes from such abstract and historical theoretical reflections on law. Yet there has been little discussion in European legal academia on the status and content of legal theory in the legal curriculum. Following the UNESCO 1950–1952 inquiry into the teaching of social sciences, which included law and specifically the teaching of jurisprudence, a couple of papers appeared in 4 the UK. More recently, Michel Troper and Françoise Michaut edited a volume that

1

For a development of this and other charges, see Bjarne Melkevik, Pourquoi Étudier La Philosophie du Droit? Quelques Réflexions Sur L’enseignement de la Philosophie du Droit, Colloque SPQ, “Enseigner la philosophie” (1998), available at http://www.reds.msh-paris.fr/communication/textes/mel3.htm. Lledó calls attention to a related problem. See also Juan Antonio Pérez Lledó, Teoría y Práctica en la Enseñanza del Derecho, 5 REVISTA SOBRE ENSEÑANZA DEL DERECHO 185 (2007). Students often complain that the study of law is too theoretical. Focusing on Spain, Lledó successfully argues how legal education can be theoretical in a bad way, i.e., reproducing the legislator’s words, omitting practical consequences of theoretical disputes, emphasizing taxonomical conceptual analysis, and engaging in authentic interpretation of important legal theorists. 2

Denis Browne, Reflections on the Teaching of Jurisprudence, 2 J. SOC’Y PUB. TCHRS. L. 79, 79 (1953).

3

See, e.g., Roger Cotterrell, Pandora’s Box: Jurisprudence in Legal Education, 7 INT’L J. LEGAL PROF. 179, 180 (2000); Csaba Varga, The Philosophy of Teaching Legal Philosophy in Hungary, IUSTUM AEQUUM SALUTARE 165 (2009). This crude generalization is also based on my personal knowledge of different European law schools as well as a brief consultation of a number of legal theory course profiles. 4

See C. J. Hamson, The Teaching of Law: Reflections Prompted by the Unesco Inquiry 1950–1952, 2 J. SOC’Y PUB. TCHRS. L. 19, 19–20 (1954); Browne, supra note 2; see, e.g., W. Friedmann, Legal Theory and the Practical Lawyer, 5 MOD. L. REV. 103, 107 (1941).

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discusses the teaching of jurisprudence in many European countries. However, this 6 volume has failed to generate public debate. For example, while the volume edited by 7 Sean Coyle and George Pavlakos examines the relationship between legal theory and legal practice, it does so according to the established canons of professional analytic jurisprudence. As such, it both disregards existing debates on legal education and does not concretely demonstrate how legal theory can contribute to legal practice. The situation in the U.S. and Australia is quite different, perhaps because these countries do have 8 specialized journals in legal education and perhaps due to higher tuition fees. Thus, there 9 has been a lively debate concerning legal education and the place of theory within it. What, then, are the arguments commonly invoked to support the place of legal theory in legal education? Usually, authors justify the inclusion of legal theory on the basis of three 10 sets of considerations: (1) Its intrinsic value for understanding the practice of law; (2) its 5

L’Enseignement de la Philosophie du Droit (Michel Troper & Françoise Michaut eds., 1997) [hereinafter Troper & Michaut]. 6

But see Melkevik, supra note 1, at 2; Cotterrell, supra note 3, at 181; Lledó, supra note 1, at 86; Varga, supra note 3, at 165–66. In the 1970s, Cotterrell & Woodliffe had already noticed “the absence of any public debate in academic circles of the place of jurisprudence in the structure of legal education.” Roger Cotterrell & J. C. Woodliffe, The Teaching of Jurisprudence in British Universities, 13 SOC’Y PUB. TCHRS. L. 73, 73 (1975). 7

JURISPRUDENCE OR LEGAL SCIENCE? A DEBATE ABOUT THE NATURE OF LEGAL THEORY 1 (Sean Coyle & George Pavlakos eds., 2005) [hereinafter JURISPRUDENCE OR LEGAL SCIENCE?]. 8

For example, the Legal Education Review in Australia, the Journal of Legal Education, the Clinical Law Review, and A Journal of Lawyering and Legal Education, all in the U.S., have been very active. The European Journal of Legal Education seems to have ceased to exist in 2008 after publishing only four volumes. Nowadays, the German Law Journal is the outlet that pays more attention to the reform of legal education, e.g., the 2009 special edition, Transnationalising Legal Education. Finally, one should keep in mind four additional reviews: the International Journal of the Legal Profession, the Journal of Commonwealth Law and Legal Education, and the Law Teacher and Legal Studies that replaced the Journal of the Society of Public Teachers of Law in which a number of papers on the teaching of jurisprudence in the UK had appeared. 9

For Australia, see John Goldring, The Place of Legal Theory in the Law School: A Comment, 11 BULL. AUSTL. SOC’Y LEGAL PHIL. 159 (1987); Charles Sampford & David Wood, The Place of the Legal Theory in the Law School, 11 BULL. AUSTL. SOC’Y LEGAL PHIL. 98 (1987) [hereinafter Sampford & Wood, The Place of the Legal Theory]; Charles Sampford & David Wood, Legal Theory and Legal Education: The Next Step, 1 LEGAL EDUC. REV. 107 (1989); Jonathan Crowe, Reasoning from the Ground Up: Some Strategies for Teaching Theory to Law Students, LEGAL EDUC. REV. 49 (2011). For the U.S., see Leonard L. Baird, A Survey of the Relevance of Legal Training to Law School Graduates, 29 J. LEGAL EDUC. 264 (1978); Duncan Kennedy, Legal Education and the Reproduction of Hierarchy, J. LEGAL EDUC. 591 (1982); Harry T. Edwards, The Growing Disjunction Between Legal Education and the Legal Profession, 91 MICH. L. REV. 34 (1992); Harry T. Edwards, Reflections (On Law Review, Legal Education, Law Practice, and My Alma Mater), 100 MICH. L. REV. 1999 (2002); Jules Coleman, Legal Theory and Legal Practice, 83 GEO. L.J. 2579 (1995); Jean R. Sternlight, Symbiotic Legal Theory and Legal Practice: Advocating a Common Sense Jurisprudence of Law and Practical Applications, 50 U. MIAMI L. REV. 707 (1996); Larry E. Ribstein, Practicing Theory: Legal Education for the Twenty-First Century, 96 IOWA L. REV. 1649 (2011); Ernest J. Weinrib, Can Law Survive Legal Education?, 60 VAND. L. REV. 401 (2007) [hereinafter Survive Legal Education]; ON PHILOSOPHY IN AMERICAN LAW (Francis J. Mootz III ed., 2009) [hereinafter Mootz]. 10

See Coleman, supra note 9.

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natural place of belonging in academic as opposed to professional training—the former being “persistently ‘reflexive’ and self-conscious in a way that professional training need 11 not be”; and (3) its instrumental value for the development of students’ capacity to think 12 critically about law and to connect it to its wider context. While I recognize the merits and espouse some of the traditional intrinsic and instrumental lines of argument identified above, I contend they have failed to raise awareness of the importance of legal theory within legal practice. Because I maintain that legal theory has a role to play in legal practice, changing this misguided perception—not defending legal theory per se—is my primary aim in this article. I suggest that this new focus requires a shift in the argumentative strategy currently found in the literature. Accordingly, this article proposes that existing literature is misguided in assuming that both legal theory and legal practice are single entities in themselves. There is simply no a priori justification for asserting that all styles of legal theory might be either wholly useful or wholly useless to legal practice. Thus, the central question is not whether legal theory is useful for or within legal practice, but whether different styles of legal theory are relevant for different forms of legal practice. This article argues that a defense of legal theory education needs to take into account changes in: (1) the modes of legal reasoning deployed by relevant actors; (2) the substance of law; and (3) legal careers. This article proceeds along the following lines. Section B argues that within European civil law countries most legal theory is of little to no use for legal practice as it is conventionally 13 understood. I substantiate this proposition by distinguishing between different styles of legal theory and asserting how and why they are not directly relevant for legal practice. Section C argues that conventional lawyering increasingly requires augmented theoretical 11

Sampford & Wood, The Place of the Legal Theory, supra note 9, at 105. See also Varga, supra note 3, at 182. I do not wish to fully evaluate this argument here, but it seems to me that it begs the following question: Why should law be an academic subject instead of a professional one? All around the world, legal education reform has favored expanding skills training (e.g., the spread of clinical legal education). See Richard J. Wilson, Training for Justice: The Global Reach of Clinical Legal Education, 22 PENN ST. INT’L L. REV. 421 (2004). Because this is not the focus of the present article, see Charles R. Irish, Reflections of an Observer: The International Conference on Legal Education Reform, 24 WIS. INT’L L.J. 5 (2006); THE INTERNATIONALIZATION OF LAW AND LEGAL EDUCATION, (Jan Klabbers & Mortimer Sellers eds., 2009) [hereinafter INTERNATIONALIZATION]. 12

13

See Browne, supra note 2, at 79; Cotterrell, supra note 3, at 182; Crowe, supra note 9, at 9.

See Troper & Michaut, supra note 5. In the common law world, the opinion that, despite all its current problems, legal theory is worthwhile for legal education and practice also seems to prevail. See, e.g., JURISPRUDENCE OR LEGAL SCIENCE?, supra note 7; Mootz, supra note 9. But see, e.g., Larry Alexander & Emily Sherwin, Law and Philosophy at Odds, in ON PHILOSOPHY IN AMERICAN LAW 241, 246 (Francis J. Mootz III ed., 2009) (claiming that even if philosophy may be of use to law, individuals may be unable to apply it in real life); Philip Leith & John Morrison, Can Jurisprudence Without Empiricism Ever be a Science?, in JURISPRUDENCE OR LEGAL SCIENCE? A DEBATE ABOUT THE NATURE OF LEGAL THEORY 147 (Sean Coyle & George Pavlakos eds., 2005) (arguing that jurisprudence needs to be empirical if it wants to be of interest for legal practice).

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sophistication due to the Europeanization and transnationalization of law, as well as the move towards rights adjudication. Thus, legal theory has an important role to play in the improvement of legal reasoning. Section D suggests that some types of legal theory are necessary for legal practice because law schools are now obliged to envisage the latter in a broader way. Building upon this analysis, I submit that the market for legal services is increasingly in need of lawyers who are capable of adopting a legislative and forwardlooking viewpoint, as well as of utilizing resources from a multiplicity of disciplines. Section E concludes with a discussion of how the contents of a general subject in legal theory would look, and a defense of my approach against some specific potential objections. Before proceeding, I would like to clarify some aspects of my conceptualization of legal practice. Throughout this article I rely on a distinction between two forms of legal 14 practice—professional, or conventional, and transformative, or critical. In professional legal practice, lawyers, judges, and prosecutors are the classical actors and all act “within 15 the bounds of the law or within the constraints of the legal or social system.” The goal of lawyers is to deploy existing law to persuade judges, who usually make decisions on the basis of the law as it is. In transformative practice, classical and new actors try to change the law and the legal system. European civil law cultures, pervaded as they are by legal formalism and positivism, are somewhat resistant to critical legal practice based on theoretical approaches that regard disputes as opportunities to reform the law. The same civil law cultures tend to be blind to forms of argument based on non-legal materials. Finally, I assume that legal practice is about persuasion and winning cases, not about 16 better understanding or explaining the law as it is often upheld in legal theory. Thus, I am interested in actual legal practice over theoretical or idealized legal practice. To those to whom these assumptions seem conservative and old-fashioned, I would like to address a word of caution. I am not denying that judges engage in creative legal reasoning and make law in some situations; they do. But the age-old comparative question “Do judges make law?” is excessively abstract. The objection arising from the view that professional or conventional practice have never been truly stable (i.e., a closed, 17 uncontested system) is not available either; I shall argue that we are now seeing a situation where constitutionalization, transnationalization, and Europeanization of the law are beginning to break traditional boundaries in conventional legal practice, and are cracking its legal-formalist nature in a way that is congenial to legal theory. I insist that the guiding question for whoever is interested in the matters of this paper should concern 14

See William H. Simon, Visions Of Practice In Legal Thought, 36 STAN. L. REV. 469, 469–70 (1984). The terms are Simon’s, but I employ them here with variations. 15

Id. at 489.

16

See, e.g., JULES COLEMAN, THE PRACTICE OF PRINCIPLE: IN DEFENCE OF A PRAGMATIST APPROACH TO LEGAL THEORY (2001).

17

See Simon, supra note 14.

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18

whether specific forms of argument are accepted in conventional legal practice. As Condon, a professed radical lawyer, recognized: If you are alienated not from the people but from the system you will not be able to go into that courtroom. If you do decide to go in, it doesn’t matter where your office is or how your personnel are referred to or how decisions are made in your office, your only job is to be as competent as you are capable of being. This involves professional training and development. When you’re there you must be there to win and you don’t have to be a radical to win—you have to be the best lawyer you 19 are capable of being. B. Three Styles of Doing Legal Theory I submit that the widespread conceptualization of legal theory and legal practice as unitary and discrete objects of analysis greatly damages a complex analysis of their interaction. It licenses, for instance, sloppy uses of the expression “legal theory,” which is often employed to describe general legal theory—e.g., analytic jurisprudence, theory in substantive law—e.g., contract law, or narrower topical legal theories—e.g., economic 20 analysis of law at the same time. Against this trend, I believe that there is no a priori reason why all styles of legal theory have to be either wholly useful or wholly useless for legal practice. Similarly, there is no rational basis for assuming that different forms of legal practice require the same style of legal theory. Thus, the first step in clarifying the relationship between legal theory and legal practice is to distinguish between the many different styles or enterprises within legal theory. Then, we need to examine the potential of each different style of legal theory for legal practices.

18

See DENNIS PATTERSON, LAW AND TRUTH (1999).

19

Gene Ann Condon, Comments on You Don’t Have to Love the Law to be a Lawyer, 29 GUILD PRAC. 19, 21 (1972).

20

Philosophical commentary on the nature and character of legal theory, however, is more developed. Recently, Dagan and Kreitner have justified the autonomy of legal theory by distinguishing it from the “law and … ” scholarship and the “law as craft” stance. See Hanoch Dagan & Roy Kreitner, The Character of Legal Theory, 96 CORNELL L. REV. 671 (2011). Legal theory has been distinguished between prudentia (practically and normatively oriented) and scientia (inquiring on the essential features of law). See JURISPRUDENCE OR LEGAL SCIENCE?, supra note 7. For a normative view of legal analysis, see ROBERTO MAGABEIRA UNGER, WHAT SHOULD LEGAL ANALYSIS BECOME? (1996). Unfortunately, these works never discuss concretely the impact of legal theory on legal practice.

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The analysis developed in the following sections is impressionistic and admittedly selective. It will not do justice to the richness of the positions and theses available in each jurisprudential tradition, but it will hopefully enable a fresh reconceptualization of the links between legal theory and legal practice. I. Analytic Jurisprudence 1. Hart & Kelsen Perhaps the most widely shared understanding of legal theory refers to analytic 21 jurisprudence. The focus of this discipline is to interrogate essential features of law, such as establishing which properties and elements across time and space a normative system 22 needs to exhibit to be called “law.” The background to this debate was the broader theme of attempting to distinguish law from morality—i.e., to determine the “province of jurisprudence.” Hart’s definition of the legal system as a collection of primary and secondary rules is 23 paramount. Without the latter in the form of a rule of recognition—as in primitive societies and international law—we would not be able to identify a legal system, properly speaking. Another example is Kelsen’s description of the legal system as being exclusively 24 comprised of norms, rather than facts, organized in a hierarchical fashion. Since The Concept of Law commanded the field of legal theory, recent debates in analytic jurisprudence have followed the signposts of Hart’s manifold contributions. For example, both inclusive and exclusive positivists have struggled to determine whether morality can be part of the legal system through an act of incorporation, or whether it must always 25 remain separate from law. Now, this style of handling legal theory has little to offer the legal practitioner because analytic jurisprudence focuses on the “existence question”: Which features allow us to say that a legal system exists? Both Hart and Kelsen answer this question by focusing on the abstract skeleton of legal systems and their sources. Neither they nor their followers mix such theoretical discourse with actual positive law. This is problematic because the existence question is irrelevant today from a legal practice perspective as most legal orders 21

For a micro history of analytic legal philosophy, see Brian Bix, On Philosophy in American Law: Analytical Legal Philosophy, in ON PHILOSOPHY IN AMERICAN LAW 99 (Francis J. Mootz III ed., 2009). For a critical assessment of the discipline, see Leslie Green, General Jurisprudence: A 25th Anniversary Essay, 25 OXFORD J. LEGAL STUD. 565 (2005). 22

Andrei Marmor, On the Limits of Rights, 16 LAW & PHIL. 1 (2007).

23

See H. L. A. HART, THE CONCEPT OF LAW (1994).

24

See HANS KELSEN, PURE THEORY OF LAW (1978).

25

See Danny Priel, Farewell to the Exclusive-Inclusive Debate, 25 OXFORD J. LEGAL STUD. 675 (2005).

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identify and contain both primary and secondary rules, including a master rule of recognition—a Constitution. Constitutions regulate lawmaking and legal adjudication. Additionally, positive law often specifies the sources of law, methods of interpretation, and content-rich rules of behavior, both in the form of commands and power conferring rules. Domestic legal systems also feature a myriad of specialized legal institutions that clearly demarcate law as a distinctive institutional normative system. In other words, in most countries, practitioners do not have to find or establish the legal system to practice. Instead, they act according to specific rules with contested content, as established by authorized sources of law. Performance, however, is never a static process determined once and for all, as analytic jurisprudence has it. Thus, determining what law is requires digging into the activity of specific legal agencies and roles. For example, if courts determine that soft laws—e.g., codes of conduct—produce legal effects—despite not being posited by authorized lawmakers— then legal practitioners need to take this into account. Analytic jurisprudence, as the endless debates on soft law demonstrate, is still at a loss for words regarding whether and how to name this law. The problem behind analytic jurisprudence’s lack of capacity to communicate with legal practice lies in the fact that positive legal systems solve the existence question and determine the building blocks of legal practice for legal practitioners. In turn, analytic jurisprudence cannot account for the dynamic aspects of legal practice, nor can it theorize norm-usage, as in soft law phenomena. 26

For similar reasons, it is hard to see how exclusive positivism, which rejects the idea that moral sources can affect the existence and validity of law, is useful for practitioners when 27 most legal orders, at least in Europe, are axiological, not logical, systems. Indeed, in the aftermath of World War II, many European legal orders have undergone a process of material constitutionalization. This process has meant that constitutions have established legal orders that should be seen to pursue and reflect important core values such as human dignity, due process, and various other fundamental rights. Furthermore, most constitutions (and supreme courts) enforce these legal values through specific institutional arrangements, such as judicial review and “perpetuity clauses,” guaranteeing the prohibition of norms that violate rights, as well as constitutional amendments that directly suppress established rights and fundamental legal principles. Given these conditions, what is a legal practitioner expected to do with the conceptual thesis of separation between law and morality, if in most positive legal orders there is no longer such separation? Accordingly, the current challenge is methodological and dynamic: How can one practice and theorize law within constitutionalized legal orders, where conflicts of rights, balancing 26

See JOSEPH RAZ, THE AUTHORITY OF LAW: ESSAYS ON LAW AND MORALITY 180 (2002).

27

See CLAUS-WILHELM CANARIS, PENSAMENTO SISTEMÁTICO E CONCEITO DE SISTEMA NA CIÊNCIA DO DIREITO (2008).

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exercises, and teleological and contextual interpretation pervade? More succinctly, how can we theorize law when all law has become so-called applied constitutional law? In my view, Hart must take the largest share of responsibility for the schism that has arisen between legal theory and legal practice. It all started when he covertly replaced the “What is law?” question for its apparent twin “What is a legal system?” in The Concept of Law. With this shift, legal theory became structuralist, interested in system-properties and links 28 between static elements, rather than in understanding the actual workings of law. When applied to international law, this research agenda quickly revealed its latent problems. Hart postulated that whereas international law could be law if thought to be law by 29 international agents, it was not a legal system due to the absence of a rule of recognition. An inquisitive mind would ask: “What type of problems would be solved by discovering that international law is a legal system?” and “What proportion of international legal phenomena do we neglect by focusing on the international system level?” Choosing to explore the question “What is law?” by examining law’s systemic properties also renders analytic jurisprudence unproductive when applied to transnational law. Rules that are issued by private lawmakers are of dubious legal status despite producing very real legal effects. After all, there is no global rule of recognition, and no authoritative list of sources and lawmakers. In this context, recent analytic jurisprudential work tries to revert to the “What is law?” question, suggesting that legal rules are those rules that are decisive 30 31 and oriented toward justice, or content-independent rules. Yet, this is hardly helpful for the legal practitioner, since it is obvious that much transnational regulation—financial regulations, food and product quality rules—is content-independent, not oriented towards 32 justice, and presumably not decisive because, as soft law, their legal status is ambiguous. Yet, these norms guide behaviors, regulate spheres of action, and are invoked and used in 33 international judgments. I shall say something more about it later on, but here it suffices to suggest that if legal theory wants to be responsive to changes in social organization and

28

Leith and Morrison also blame Hart for the unproductive detour of legal theory. See Leith & Morrison, supra note 13. For Schlag’s take on Hart, see Pierre Schlag, Law and Philosophy in the Hyperreal, in ON PHILOSOPHY IN AMERICAN LAW 263 (Francis J. Mootz III ed., 2009). 29

See HART, supra note 23, at 220.

30

See DETLEF VON DANIELS, THE CONCEPT OF LAW FROM A TRANSNATIONAL PERSPECTIVE 105–06 (2010).

31

See KEITH CULVER & MICHAEL GIUDICE, LEGALITY’S BORDERS: AN ESSAY IN GENERAL JURISPRUDENCE 155 (2010).

32

Guilherme Vasconcelos Vilaça, Law as Ouroboros (Dec. 17, 2012) (unpublished Ph.D. thesis, European University Institute) (on file with author) [hereinafter Ouroboros]. 33

INTERNATIONALIZATION, supra note 11, at 172.

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normative sources, then it needs to account for the dynamics of legal practice, including 34 questions of effectiveness and norm-using. In other words, analytic jurisprudence is interested in neither the actual practice of law nor in the knowledge of positive law. Rather, it focuses on the abstract, aprioristic, static, and systemic study of the legal system. For the legal practitioner, this style of legal theory is of 35 little interest. 2. Dworkin Throughout his career, Ronald Dworkin produced a spin-off of the analytic tradition. While still interested in speaking about the essence of law, Dworkin changed the research focus 36 from the legal system’s properties to judicial practice. Dworkin rejected the separability thesis, claiming that positivism could not account for the ways in which morality enters the 37 law. He posited that one could not understand actual adjudication—e.g. Riggs v. Palmer—without principles, which he defined as objects, along with commands and permissive rules, in law’s ontology. For Dworkin, law is the combination of legal rules, and principles underlying those rules, which impregnate previous case law. Adjudication requires judges to identify the moral theory that best fits and justifies existing case law and legal rules. It could be said that 34

Goldmann’s legal dogmatics work, which catalogues international legal instruments, is a good example of a theoretical approach guided by legal practical concerns. See Matthias Goldmann, Inside Relative Normativity: From Sources to Standard Instruments for the Exercise of International Public Authority, 9 GERMAN L.J. 1865 (2008). Calliess and Zumbansen’s encyclopedic work on a theory of transnational law shows the limits of comprehensive theoretical approaches which do not include a legal practice point of view. See GRALF-PETER CALLIESS & PEER ZUMBANSEN, ROUGH CONSENSUS AND RUNNING CODE: A THEORY OF TRANSNATIONAL PRIVATE LAW (1st ed. 2010). 35

Steven D. Smith, Jurisprudence: Beyond Extinction, in ON PHILOSOPHY IN AMERICAN LAW 249 (Francis J. Mootz III ed., 2009). Hart’s emphasis on the internal point of view as upheld only by legal officials also deprives his jurisprudence of critical bite. Finally, even in the heyday of positivism—when Hart won the debate against Fuller—it remained mysterious how one could make the case that the separation of law and morality was desirable, because it preserved the possibility of criticising positive law from the outside. On the impossibility and meaninglessness of making such a claim, see Liam Murphy, Better to See Law This Way, 83 N.Y.U. L. REV. 1088 (2008). 36

RONALD DWORKIN, LAW’S EMPIRE 11 (1986) (assuming that a central task of legal philosophy is “intelligent and constructive criticism of what our judges do”). For a trenchant critique of a jurisprudence modeled after judicial practice, see Schlag, supra note 28, at 263 (“Be intellectually serious. Drop the received scholarly agendas. Forget reflective equilibrium. Ditch the ideal observer. Throw your copy of ‘The Concept of Law’ into a lake and give ‘Law’s Empire’ to a homeless person. Also, stop worrying about helping the courts with their various legitimation needs. They don’t need you. Really. They’ll be just fine.”) It remains unclear, however, how Schlag’s jurisprudence contributes to legal practice, albeit he seems to be committed to practically relevant legal theory. 37

The positivist reaction, recognizing that Dworkin was right but that his account did not presuppose a necessary link between law and morality, confirms the sterility of general jurisprudence debates for legal practitioners.

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Dworkin frames a close relationship between legal practice and legal theory in the opening pages of Law’s Empire: “Since it matters in these different ways how judges decide cases, it also matters what they think the law is, and when they disagree about this, it matters what 38 kind of disagreement they are having.” At first sight, Dworkin’s new focus seems useful for legal practitioners because it deals explicitly with actual legal practice. Soon, however, the limits of his strategy start showing. Perhaps because Dworkin wishes to avoid the position that judicial interpretation is 39 unrestrained, he postulated that all cases have a “right answer.” Then, he imagined an ideal judge, Hercules, capable of screening all existing statutes and precedents, and ascertaining the moral principles that best fit all materials. Evidently, Hercules would also 40 be capable of finding the “right answer.” As a result, the contribution of Dworkin’s legal theory for legal practice becomes more ambiguous than initially expected. Clearly, practitioners cannot carry out Hercules’ learned examination of all relevant legal and political traditions. While it is true that we should not overstate the differences between civil and common law traditions, in the former, judges or lawyers cannot openly engage in political theorizing. In addition, most cases do not require interpreting the whole history of the law that may be at stake. Finally, Dworkin never developed a robust model of legal reasoning that would be capable able of telling us how to work out the fit between principles, precedents, and rules in a concrete case, or to ascertain the correctness of our reading of legal history and political principles. 41

A case in point is Dworkin’s famous thesis of rights as trumps. According to him, rights should always trample considerations of policy, but he never provides guidelines for how to solve conflicts of rights. This is problematic because most considerations of policy can easily be framed in rights parlance. For instance, the public policy debate of whether or not to ban smoking from public spaces can be framed as a dispute between the right to health and the right to develop one’s personality freely. If this is so—and there is much evidence 42 of the pervasiveness of rights talk in American society —then the problem is less the conflict between rights and policy considerations and more that between rights. These remarks hint at something fundamental: Contrary to what Dworkin wanted to 43 achieve, his theory of law and adjudication is descriptive rather than interpretative. Since 38

DWORKIN, supra note 36, at 3.

39

In the style of Critical Legal Studies.

40

DWORKIN, supra note 36.

41

See Ronald Dworkin, Rights as Trumps, in THEORIES OF RIGHTS (J. Waldron ed., 1984).

42

See MARY ANN GLENDON, RIGHTS TALK: THE IMPOVERISHMENT OF POLITICAL DISCOURSE (1991).

43

See RICCARDO GUASTINI, LA SINTASSI DEL DIRITTO 32–33 (G. Giappichelli ed., 2011).

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there is only one right answer, and the ideal judge can achieve it, then there are no real conflicts or gaps in the application of law. Therefore, there is no real theoretical disagreement in Dworkin’s theory of law, despite this being his original research question. As Douzinas et al. have written, “Despite his imperial edifice, Dworkin only touches on the 44 question of interpretation in law.” But then theory cannot add much. Legal practitioners already knew that there is disagreement in law, and they have to address it, Dworkin notwithstanding. Thus, while Dworkin’s theory effectively clarified that the nature of some disagreements in legal practice referred to principles or grounds of law, rather than legal rules, its impact on conventional legal practice appears to be more modest. In addition, Dworkin’s theory of law is a theory of adjudication only, as if the latter accounts, or could account, for the diverse forms legal practice takes. In the same way that Kelsen and Hart neglected judicial 45 practice, Dworkin neglects, consciously, what lies outside adjudication. Still, legal practice not only necessitates adopting the judge’s point of view but also that of the legislator, the legal practitioner, the public-interested lawyer, or the legal reformer. For example, the legal practitioner’s goal is to persuade the judge or the other party’s legal team that it has 46 a stronger case, not to find the legal interpretation that ensures law’s integrity. All things considered, Dworkin’s descriptivism effectively contributed to the perpetuation of analytic jurisprudence’s narrow scope of inquiry. Therefore, it is doubtful that Dworkin succeeded in steering legal theory away from speculation about the essence of law or from engagement in the idealization of judicial practice. II. The “Law and . . . ” Scholarship I dub a second style of doing legal theory the “Law and . . . ” movement. This is the 47 approach that dominated legal scholarship in the second half of the twentieth century. Despite its bewildering diversity, “Law and . . . ” scholarship combines law with external disciplines such as politics, anthropology, race, economics, psychology, development, 44

Costas Douzinas et al., Is Hermes Hercules’ Twin? Hermeneutics and Legal Theory, in READING DWORKIN CRITICALLY 138 (Alan Hunt ed., 1992) (emphasis added). 45

See DWORKIN, supra note 36, at 12.

46

It is interesting to notice that legal theory often assumes that judicial practice is, descriptively, geared towards truth or an equivalent ideal, such as integrity. This understanding seems to be at odds with actual judicial and lawyering practices, especially in common law countries, given its adversarial conception of legal process. See, e.g., Robert A. Kagan, Globalization and Legal Change: The “Americanization” of European Law?, 1 REG. & GOVERNANCE 99 (2007); DENNIS PATTERSON, LAW AND TRUTH (1999). 47

See Shai Lavi, Turning the Tables on “Law and . . .”: A Jurisprudential Inquiry into Contemporary Legal Theory, 96 CORNELL L. REV. 811 (2011); Carrie Menkel-Meadow, Taking Law and _____ Really Seriously: Before, During, and After “The Law,” 60 VAND. L. REV. 555 (2007).

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aesthetics, deconstruction, music, literature, postmodern studies, ethics, and so on. The problem with these approaches, from a conventional legal practice point of view, lies in the fact that they are assumed to be external to law. In other words, they describe, assess, and prescribe treatments of law on the basis of, or in relation to, a set of values, methods, and goals that are not necessarily those of positive law. In what follows, for reasons that will become clear, I distinguish between “law and social sciences” and “law and humanities” movements. 1. “Law and Social Sciences” 48

Let us consider the example of “law and economics.” This combinatory study proposes a twofold program: (1) A re-description of existing legal rules according to economic concepts and theories such as incentives, transaction costs, and rational-choice theory; and (2) the evaluation of existing legal rules from an efficiency point of view (reducing 49 justice and other substantive goals of positive law to economic efficiency). Paradigmatically, law and economics developed the theory of efficient breach, according to which a party to a contract should be allowed to breach it and pay damages if such a course of action would be cost-justified—if the total benefits outweigh total costs, including compensation for breach of contract. Furthermore, Posner also claimed that this theory successfully explained existing law: The prohibition of penal clauses or punitive damages for non-tortious breaches of contract. From an efficiency point of view, it was claimed, punitive damages/clauses may induce contractual performance even when that 50 would be inefficient. Another landmark law and economics output is the view that, in tort law, liability should be assigned to the least-cost avoider in order to reduce the social costs of accidents. Despite its sophistication, however, both “efficient breach” and “least-cost avoider” doctrines are somewhat alien to the realities of offering legal advice, litigating, and adjudicating in the European civil law tradition. Why is that? First, the theory of efficient breach violates the rule at the core of contract law in civil law countries. The rule pacta sunt servanda embodies a deontological foundation for contract law that law and economics replaces for a consequentialist one. The issue here is not discussing which philosophical foundation is superior, but to notice that this shift does not 48

Thomas S. Ulen, The Impending Train Wreck in Current Legal Education: How We Might Teach Law as the Scientific Study of Social Governance, 6 U. ST. THOMAS. L.J. 302, 306 (2009) (suggesting that law and economics combinatory study is producing a revolution in legal academy based on “the importation of the scientific method into the study of law,” which, according to the author, leads to a focus on empirical work, traditionally neglected in conventional legal scholarship). 49

Richard Posner was the author who perhaps best personified and carried out this two-sided research program. See, e.g., RICHARD POSNER, ECONOMIC ANALYSIS OF LAW (2010). For an economic analysis of civil law, see CLAUS OTT & HANS-BERND SCHÄFER, THE ECONOMIC ANALYSIS OF CIVIL LAW (2005). 50

See POSNER, supra note 49.

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fit the civil law tradition well. If the premise of contract law is that contracts should be respected and performed according to good faith, then it cannot endorse generally 51 instrumental breaches. Furthermore, throughout my legal education and research into different civil law systems, I have never heard of historical debates concerning the travaux of important civil codes, legal scholarship, and jurisprudence upholding the doctrine of efficient breach in contract law. These admittedly anecdotal impressions are confirmed by 52 Scalise Jr.’s research on the inexistence of efficient breach in civil law. He provides a number of historical sources on the moral foundations of contract and promises and then goes on to analyze different “structural hurdles” such as the preference for specific performance, a broader conception of damages, and cultural hurdles like the different role of judges and different admissible methods of legal reasoning that are obstacles to the adoption of efficient breach anytime soon in the civil law tradition. But if efficient breach is alien to the legal cultures in which it is being deployed, then the 53 law and economics (per)version of the pacta sunt servanda rule is a “just-so story.” Two consequences follow. First, if law and economics does not meet the burden of proof of showing how efficient breach exists and fits civil law systems better, then its strategy falsifies the latter’s tradition. Second, and consequently, “just-so stories” have no currency in legal practice unless admitted by judges, and as such it would be hard, or impossible, for a practitioner to make an argument in court based on one. As is often pointed out, efficiency is neither a source of law nor a traditional legal topos in European civil law 54 countries. Therefore, the re-description side of the law and economics agenda is one that 55 is often ill suited to advance conventional legal practice in Europe. The above considerations lead us to the second reason that makes the law and economics approach—and most other “law and . . . ” movements, as we shall see—of limited use for 51

Notice that efficient breach is hard to justify even from an economic perspective since trust in the institution of contract could break down in the presence of pervasive uncertainty regarding contract performance. 52

See Ronald J. Scalise Jr., Why No “Efficient Breach” in the Civil Law?: A Comparative Assessment of the Doctrine of Efficient Breach of Contract, 55 AM. J. COMP. L. 721 (2007). 53

Jeanne L. Schroeder, Just So Stories: Posnerian Economic Methodology (Cardozo Law Sch. Pub. Law Working Paper No. 013, 2000), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=229874. 54

See Scalise Jr., supra note 52; Kenneth Glenn Dau-Schmidt & Carmen L. Brun, Lost in Translation: The Economic Analysis of Law in the United States and Europe, 44 COLUM. J. TRANSNAT’L L. 602 (2006); and Nuno Garoupa & Thomas S. Ulen, The Market for Legal Innovation: Law and Economics in Europe and the United States, 59 ALA. L. REV. 1555 (2008). This is no mere civil law idiosyncrasy. For the common law world, see generally Schroeder, supra note 53; CHARLES FRIED, CONTRACT AS A PROMISE: A THEORY OF CONTRACTUAL OBLIGATION (1981) (upholding the moral idea of “contract as promise”). 55

It is somehow dismaying that the most recent law and economics textbook for civil law countries ignores the relationship of law and economics and legal practice in Europe. See EJAN MACKAAY, LAW AND ECONOMICS FOR CIVIL LAW SYSTEMS (2013).

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conventional legal practice. The other example mentioned above—that liability should be assigned to the “least-cost avoider” to minimize the social cost of accidents—aptly illustrates this new argument. This is an odd solution because it asks the judge to go beyond the parties to the legal dispute in deciding who should be liable. In other words, the purpose of assigning liability becomes not only to decide the actual controversy between the parties, but also to set the right incentives to secure efficient behavior in the future. That is, the actual controversy between John and Mary ought to be functionalized to ensure Bill’s, Ann’s, and Mark’s efficient conduct—abstract bystanders. However, tort claims in the law and economics robes break down the system of legal concepts common to most legal orders. That system is one based on concepts that aim to redress the 56 wrongful harm suffered by A and caused by B. Reducing the social costs of accidents by punishing the “least-cost avoider” may lead to the imposition of liability to third parties who are foreign to the specific legal dispute. Since what matters is the reduction of total social costs, tort liability can be designed to set the right behavioral incentives and to reduce the costs of litigation—given the inefficiency of tort liability claims—regardless of 57 the relationship between the parties to the actual legal dispute. Legal philosophers in the common law world reacted quickly, subjecting law and economics to a scathing critique. For example, Coleman states that law and economics 58 ignores the corrective justice ideal that impregnates current American tort law. In short, he argues that the parties to a tort case want and expect to see their concrete case litigated and not, as law and economics would have it, their case instrumentalized to pursue goals that transcend the legal relationship created between tortfeasor and victim. Weinrib adds to this critique explaining at length that one cannot meaningfully apply and 59 work through American tort law with the language of law and economics. As such, there is an obvious gap between this legal theory and actual legal practice. But he adds, this is a problem for all instrumentalist analyses of law: Regardless of the goal it advances, an instrumentalist analysis of private law mischaracterizes its object in the same way that economic analysis does. An instrumentalist approach makes three errors. First, it imports outside goals for immanent concepts of private law. Second, it ignores the relationship between a

56

See Survive Legal Education, supra note 9, at 407.

57

See id.

58

See COLEMAN, supra note 16.

59

See Survive Legal Education, supra note 9, at 406–07.

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plaintiff and a defendant. Third, it wrongly converts all 60 private law into public law. Coleman and Weinrib’s critiques are, to my mind, spot on, but I would like to add a further point that better fits the purposes of this article. Put briefly, law and economics typically assumes that there is no difference between adopting the legislator or the legal practitioner’s perspective. However, this is a difficult claim to make. Legislators’ activity is forward-looking and most often regulates outside of any particular case. Conversely, judges mostly decide in a retrospective fashion. Even if they engage in consequentialist adjudication, the fact that they are bound to do justice in the concrete past dispute before them necessarily affects their capacity to act in a forward-looking way. From this angle, the main reason why law and economics is apparently so much at odds with legal practice has to do with the fact that the former speaks from the legislative point of view. And it adopts the legislative standpoint by both endorsing an interpretation of the law that is forwardlooking and functional to the pursuit of social efficiency—at the expense of the actual case, as shown earlier—and by advocating a reformist stance in legal interpretation and legal practice. But in the same way that civil law scholarship and practice has been reluctant to 61 pay heed to economic arguments, it also upholds a formalist approach to law rather than 62 a policy approach. With the exception of constitutional cases, as discussed below, legal practice in civil law countries is mostly about solving a concrete dispute by means of legal 63 formal argument, not about regulating a class of disputes. Overall, conventional civil law practice does not openly engage in policy considerations that require the adoption of a 64 legislative standpoint. It is nevertheless important to bear in mind that Weinrib’s argument against law and economics hides a strong bias; he believes in law’s essence. For example, he upholds the view that private law is an essentially distinctive mode of ordering that cannot and should not be conflated with that of public law. However, once we link the value of legal theory to legal practice then this appears to be an illegitimate move. From the point of view of knowing whether law and economics is relevant for legal practice, the answer has to be 60

Id. at 411.

61

Duncan Kennedy, Legal Formalism, in 13 INTERNATIONAL ENCYCLOPEDIA OF THE SOCIAL & BEHAVIORAL SCIENCES 8634–38 (N. J. Smelser & P. B. Baltes eds., 2001), http://duncankennedy.net/documents/Legal%20Formalism.pdf. 62

See Ralf Michaels, American Law (United States), in ELGAR ENCYCLOPEDIA OF COMPARATIVE LAW 66, 71–73 (Jan M. Smits ed., 2006). 63

This may be due to the lack of early codified bodies of law. See Scalise, supra note 52, at 756–57 (“Thus, when faced with a breach of contract case judges are free to write in a theory of efficient breach as the next chapter in the novel.”). 64

See JOHN HENRY MERRYMAN & ROGELIO PÉREZ PERDOMO, THE CIVIL LAW TRADITION: AN INTRODUCTION TO THE LEGAL SYSTEMS OF EUROPE AND LATIN AMERICA (2007); Scalise, supra note 52, at 755.

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“yes” if legal practice absorbs economic arguments and jargon, or if we consider legal education to cater to legal practitioners working in jobs that require adopting the 65 legislative point of view. These views will be developed further in Sections D and E below. Presently, I would like to suggest that the conclusions drawn from law and economics apply generally to most “law and social sciences” movements. In other words, be it in the robes of critical legal studies, empirical legal studies, Marxism, “law and development,” “law and race,” or “law and gender,” theoretically sophisticated arguments will only be directly relevant to conventional legal practice if they are narrowly defined and if they fit actual practice. Since most of these enterprises adopt a transformative or critical approach to law, that will not generally be the case. Some brief examples illustrate this point. Knowing that constitutional judges vote according to their political preferences may be very useful for reforming the law, leading to changes in appointment procedures and in 66 legal training, but its value for legal practice remains limited. By the same token, one can evaluate whether existing law privileges capital over labor, e.g., contract or commercial law, but such an argument cannot be made openly in legal practice because most European legal orders do not recognize that the law is itself a part of the superstructure of the capitalist state. This is particularly evident in the case of the current Portuguese Constitution of 1976, which was amended to eliminate so-called socialist language and provisions. Similarly, a critical approach to law will, nowadays, only have legislative appeal. But the issue does not only concern positive law. It is also the spirit of lawyers and their 67 habitus that currently disregard arguments based on class. For similar reasons, law and gender as well as law and race—despite its modest currency in European legal academia—can now have significant impacts on legal practice because post-World War II constitutionalism has recognized race and gender equality as constitutional values and pertaining to fundamental rights. In doing so, it opened up the possibility for constitutional litigation, thus paving the way for actual transformative legal practice to challenge existing laws directly.

65

An altogether different issue is the fact that law and economics impregnates the logics of some of our legal institutions. For example, economic considerations are pervasive within the managerial discourse used to justify the move towards alternative dispute resolution mechanisms or plea-bargaining arrangements. See Ouroboros, supra note 32. 66

See Nuno Garoupa, The Politicization of Kelsenian Constitutional Courts: Empirical Evidence, in EMPIRICAL STUDIES

OF JUDICIAL SYSTEMS 149 (K. C. Huang ed., 2008). 67

This may help to explain Hirschl’s empirical argument, according to which social rights adjudication fares much worse than liberal rights adjudication. And this is despite the fact that social rights are increasingly recognized in many constitutional orders. See generally RAN HIRSCHL, TOWARDS JURISTOCRACY: THE ORIGINS AND CONSEQUENCES OF THE NEW CONSTITUTIONALISM (2007).

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Conventional legal practice is about deploying the law as it is in court, in settlement 68 negotiations, or in preventive legal advice. And frequently this is at odds with “law and . . . ” scholarship which, maintaining a strong theoretical focus, is external to existing law and takes a legislative and reformist perspective. 2. “Law and Humanities” The usefulness of the “law and humanities” movements—such as “law and aesthetics,” 69 70 “law and literature,” and “law and postmodern studies” —for legal practice is even 71 harder to establish. Often, law and humanities scholarship is defined and defended on the basis of its contribution to the development of an ethically richer and more sensitive 72 legal consciousness—i.e., one that listens to “the Other” and is conducive to the transformation of existing practices and institutions. Thus, law and humanities writings seek to educate a generation of lawyers to be better people and more in tune with the demands of justice. For example, Gearey’s opening lines of “The Recording Angel” in his book Law and Aesthetics, proclaim: We are in pursuit of a style of thinking. Circling back to the beginning of the book, this section offers a closing interpretation of Shelley's assertion that poets are the unacknowledged legislators of the world. It has already been argued that a poet should not impose a morality through his poetry. Moral standards are always specific and limited to a time and place. What, then, is the 73 poet's legislation?

68

I know this is a controversial point, and it is not the purpose of the paper to articulate fully my views on the issue of the objectivity of law. Following Patterson’s account, I maintain that any legal practitioner that is competent in the practice of law will know that some claims cannot be made. See generally PATTERSON, supra note 46. 69

See, e.g., IAN WARD, LAW AND LITERATURE: POSSIBILITIES AND PERSPECTIVES (1995).

70

See, e.g., Sanford Levinson & J. M. Balkin, Law, Music, and Other Performing Arts, 139 U. PA. L. REV. 1597 (1991).

71

I should make clear that it is not my intention to denigrate these legal theory schools. My own Ph.D. thesis and much of my research deals with abstract and philosophical (legal) sources, using poetic titles and inspiration from a range of different academic disciplines. I restate that my purpose in this article is twofold. First, it is time to acknowledge that most legal theory has little to offer legal practice. Second, legal theorists need to rise to the challenge of showing connections to legal practice as well as to justify their teaching of legal theory. Both claims have to be read in the context of teaching legal theory. I believe it should be up to each academic to decide what to research. 72

COSTAS DOUZINAS & ADAM GEAREY, CRITICAL JURISPRUDENCE: THE POLITICAL PHILOSOPHY OF JUSTICE (2005).

73

ADAM GEAREY, LAW AND AESTHETICS 125 (2001).

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This quotation hints at an insuperable linguistic gap between law and humanities and actual law. If the purpose is to improve legal practice by making it more ethical, clearly a more concrete focus on the roles of lawyers and the details of legal practice is needed. After all, the legal field, as currently structured, deliberately avoids appealing to generally accepted ideas of equity and moral autonomy in legal reasoning. It also grounds the 74 symbolic power of lawyers in the possession and exercise of a distinctive habitus. But law and humanities also faces greater problems than its law and social sciences counterpart. Whereas the latter may produce normative scholarship that can aim at reforming the law by legislation and constitutional litigation, the focus of law and 75 humanities on moral development is too removed to do the same. Furthermore, would it be desirable if legal operators started doing justice in their daily practice? Given widespread postmodern disenchantment with values and moral reasoning, the possibility of large-scale, concrete, open, moral reasoning in law could amount to the replacement of 76 common-good ideals with individual preferences. Does this mean that I am against educating a generation of lawyers that are excellent human beings, and oppose law and humanities playing a role in legal education? Of course not. Law and humanities scholarship raises a necessary challenge to the prevalent idea that law is only propositional. Rather, law and humanities emphasizes the performative nature of law and legal practice and this can only help to instill the idea that law is constructed, and thus, never natural. Consideration of works such as Saramago’s Blindness or Kafka’s The Castle or The Trial can help in reflection on big questions about law—the nature of our legal system and the violence it imposes—as opposed to the costs or drawbacks of not having such a system. Thus, law and literature can certainly play a role in the development 77 of a critical approach towards existing law. In this respect, while not directly useful in conventional legal practice, it can fuel transformative forms of legal practice such as causelawyering, constitutional litigation, and legislative reform.

74

See Pierre Bourdieu, The Force of Law: Toward a Sociology of the Juridical Field, 38 HASTINGS L.J. 814, 818–19 (1987). 75

A debate similar in content is taking place concerning the role of literature in ethics, a much less institutionalized and positivized practice than law. See Martha C. Nussbaum, Exactly and Responsibly: A Defense of Ethical Criticism, in MAPPING THE ETHICAL TURN: A READER IN ETHICS, CULTURE, AND LITERARY THEORY 59 (T.F. Davis & K. Womack eds., 2001). 76

See Guilherme Vasconcelos Vilaça, Badiou’s Ethics: A Return to Ideal Theory, 3 BADIOU STUD. 271 (2014), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2415726. 77

See generally JEFFREY C. KINKLEY, CHINESE JUSTICE, THE FICTION: LAW AND LITERATURE IN MODERN CHINA (2000) (discussing the use of crime narrative to denounce the Chinese socialist legal system).

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In addition, the study of law and literature can be a breath of fresh air for law students. For instance, in Shakespeare’s The Merchant of Venice, Antonio’s trial vividly illustrates the doctrine of abuse of law as well as the subtleties of legal reasoning:

SHYLOCK: An oath, an oath. I have an oath in heaven! Shall I lay perjury upon my soul? No, not for Venice. PORTIA: Why, this bond is forfeit, And lawfully by this the Jew may claim A pound of flesh, to be by him cut off Nearest the merchant's heart. Be merciful: Take thrice thy money; bid me tear the bond. .... PORTIA: A pound of that same merchant's flesh is thine, The court awards it, and the law doth give it. SHYLOCK: Most rightful judge! PORTIA: And you must cut this flesh from off his breast; The law allows it, and the court awards it. .... PORTIA: Tarry a little, there is something else. This bond doth give thee here no jot of blood. The words expressly are ' a pound of flesh'. Take then thy bond, take thou thy pound of flesh, But in the cutting it, if thou dost shed One drop of Christian blood, thy lands and goods Are by the laws of Venice confiscate Unto the state of Venice. GRATIANO: O upright judge! Mark, Jew - O learned judge! SHYLOCK: Is that the law? PORTIA: Thyself shall see the Act. For as thou urgest justice, be assured Thou shalt have justice more than thou desirest. GRATIANO: O learned judge! Mark, Jew: a learned judge.

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SHYLOCK: I take this offer then. Pay the bond thrice 78 And let the Christian go. Other works may also be used to illustrate any branch of law. But this practice makes law and literature a more useful teaching method and teaching material rather than a content79 oriented discipline, or an independent theoretical approach that is directly useful for legal practice. To conclude, Balkin & Levinson superbly summarize the bias against humanities in the dominant view of what “thinking like a lawyer” means: A ‘good lawyer’ is a rigorous thinker who does not waste time denouncing injustice at the expense of legal analysis. It is only the insufficiently rigorous and welltrained, whom legal training has inadequately ‘disciplined,’ who think that the solution to a legal problem is resolved by asking which result is more just. Even scholars who believe it important to emphasize issues of justice are careful to instill analytical rigor and skepticism in their charges. They too, seek to 80 distinguish what is law from what is right. III. Legal Theory as Political Philosophy A third style of doing legal theory focuses on the relationship between law and justice. Law as political philosophy studies the questions of whether and how law should pursue 81 justice, either as a substantive ideal in the form of goods à la Rawls’ A Theory of Justice or 82 as a procedural ideal as in Habermas’ Between Facts and Norms. Indeed, these approaches are basic normative attempts to justify the role of law in society by arguing either: (1) that law needs to recognize each one of us a basic set of goods because that is 78

WILLIAM SHAKESPEARE, THE MERCHANT OF VENICE act 4, sc. 1 (M. M. Mahood ed., Cambridge U. Press 2d ed. 2003) (1598). 79

Two sources conflate this distinction. See Imer Flores, The Struggle for Legal Philosophy (vis-à-vis Legal Education): Methods and Problems, 5 MEX. L. REV. 125 (2012); see also ALTERNATIVE METHODS IN EDUCATION OF PHILOSOPHY OF LAW AND THE IMPORTANCE OF LEGAL PHILOSOPHY IN THE LEGAL EDUCATION (Imer Flores & Gulriz Uygur eds., 2010). 80

Jack Balkin & Stanford Levinson, Law and the Humanities: An Uneasy Relationship, 18 YALE J.L & HUMAN. 155, 185 (2006). 81

JOHN RAWLS, A THEORY OF JUSTICE (1999).

82

JÜRGEN HABERMAS, BETWEEN FACTS AND NORMS (2008).

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what all of us would desire under the veil of ignorance, or (2) understanding the role of law as the preeminent discourse and medium for social integration. Given the current functional differentiation of social systems going on according to their own logic, Habermas worked from the assumption that law offers the only language capable of mediating among different systems’ rationalities. Thus, compared to his earlier juridification thesis, the project turned into a normative thesis legitimating law according to discourse theory. Once again, the normative nature of the political philosophy branch of legal theory makes it hard for it to impact actual legal practice. For a legal practitioner, it is obvious that law is the language in which social conflict is expressed, be it between employers and employees, journalists and abusive governments, students and teachers, or service providers and clients. At this point, some readers may point out that I am being unfair to the merits of Habermas’ thought, since Between Facts and Norms addresses such middle-ground concerns. Indeed, speaking within the context of constitutional adjudication and conflicts of rights, Habermas states that judges should not act as legislators as that would violate the necessary discursive foundations for just lawmaking. He premises this thesis on a methodological point: Courts should not, as he says the German Constitutional Court does, 83 treat conflicts of rights as conflicts of values. For Habermas, conflicts of rights are actually conflicts of rules that may be managed routinely according to simple syllogistic reasoning. In essence, Habermas is suggesting that determining whether a car falls under the rule “vehicles are not allowed in the park” poses the same qualitative challenge as deciding whether to privilege the right to life over the mother’s right to choose in abortion cases. As with Dworkin, this analysis is simply too abstract to advance legal practice either theoretically or practically. Why is this? Habermas posits, more than argues, that conflicts of rights are not conflicts of values. This is convenient due to his belief that values are incommensurable. Otherwise, according to his own epistemological premises, there would not be a way of rationally settling such conflicts. Such a view on conflicts of rights, however, is hard to maintain as the problem with conflicts of rights stems from the fact that rights are in fact placeholders for values. Admittedly, these values are not values as such, but legally recognized values—in other 84 words, historical sedimentations and concretizations of values. So, for example, if we discuss whether smoking in closed spaces should be forbidden, we need to reconcile the legal values of public and individual health with individual freedom and the right to develop one’s personality. Without further demonstration on how to accomplish this through rules and syllogisms, Habermas’ methodological thesis remains unwarranted. Indeed, the problem is not nominalist (“What is the nature of conflicts of rights?”) but, rather, practical (“How can we solve conflicts of rights?”). In this vein, Habermas’ criticism 83

See id. at 253.

84

See Andrei Marmor, On the Limits of Rights, 16 LAW & PHIL. 1 (1997).

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lives at the purely theoretical level, and is required by the broader discourse-theory distinction between adjudication and legislation. The former “applies” the law, whereas the latter “justifies” it. Yet, anyone who has read a legal decision on rights adjudication cannot fail to see that Habermas’ distinction is normative, not descriptive. Indeed, this is a clear case of theory distorting the workings of law and legal institutions in the name of ideal claims—i.e., the proposition that democracy and rights are interlinked and that the legitimacy of political authority depends upon the fact that all parties affected by regulation consent to it. As with Dworkin, such a focus is of limited interest for legal practitioners. IV. Legal Theory and Conventional Legal Practice: A Claim Breaking down the enterprise of legal theory into different styles and clearly demonstrating that I have been interested in linking legal theory to conventional legal practice, Section B has offered evidence to substantiate an uncommon claim: Most legal theory is not useful for conventional legal practice. According to my analysis, this is because the styles of legal theory share some of the following features. They: (1) Focus on systemic and static aspects of the legal system; (2) Assume a legislative/law reform point of view because they are grounded on external sources to law and thus cannot be directly applied in conventional legal practice; (3) Are historically passés; and (4) Either caricature legal practice or conceptualize it at too abstract a level and therefore fail to offer valuable insights for legal practitioners. If these conclusions hold, then the poor reputation of legal theory amongst law students and legal practitioners should not surprise us. Students often enter European legal education expecting to be trained to think like a domestic lawyer within a positivist judicial culture. Disassembling legal theory into different styles has shown that the direct impact on conventional legal practice of classical topics in jurisprudence courses is minimal. Furthermore, from the sample of approaches examined here, it also seems that most legal theoretical approaches are never explicit about the links to and implications for legal 85 practice. Somehow, we are made to believe that, for instance, the importance of Hart’s or Kelsen’s theories for one’s legal education and legal practice are entirely obvious, or that being an empowered critical legal practitioner will magically find a way to be definitive in one’s daily, conventional legal practice. 85

See Peter Gabel & Paul Harris, Building Power and Breaking Images: Critical Legal Theory and the Practice of Law, 11 N.Y. REV. L. & SOC. THEORY 369 (1983).

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At the same time, this section reprehends legal theories’ limited interest in and for legal practitioners; it opens a contrario two ways out. Legal theory could become useful if the discipline addresses the limitations described above and if it is shown that changes in legal practice and legal careers require a non-conventional lawyering standpoint. I hinted repeatedly at both the need for legal theory to deepen its account of legal reasoning as a key element of the practice of law, and at the potential for different styles of legal theory to further the type of legal practice that involves the adoption of a legislative or reformist stance to law. Altogether, it is seriously misleading to claim that the root of the problem with legal theory lies primarily in the disjunction between theory and practice. Instead, as the remainder of this article will explain, a more productive guiding distinction is one that considers whether 86 theory is interesting or uninteresting for legal practice, suggesting how theory can fit legal practice, and what legal practice comprises. What remains now is to examine how the nature of changes in legal practices and in legal careers justifies the claim that legal theory ought to play an important role in legal education and practice. C. The Growing Need for Legal Theory: Changes in Legal Practice The previous section established that, due to the positivist nature of European legal cultures, most styles of legal theory are not useful within conventional legal practice. In contrast, this section argues that there is much room for some styles of legal theory in transformative or critical legal practice. In order to make this claim, I shall briefly show how the constitutionalization, transnationalization, and Europeanization of law are causing upheavals in conventional legal practice. My aim is to highlight the way in which these changes require greater theoretical sophistication, thus making legal theory necessary for legal education. This section also embodies the general thrust of this article by asserting how a pragmatic defense of the role of legal theory in and for legal practice cannot analyze legal theory or legal practice as discrete phenomena. The argument is not exhaustive, but illustrative. More empirical evidence and work are needed, but hopefully this article connects parts of the puzzle that are seldom joined. As such, it provides pointers for additional empirical evidence. I. Constitutionalization, Legal Reasoning, Normative Legal Practice Law is changing. The new constitutionalism of the past sixty years outlined a model of law 87 based on the protection of fundamental rights and judicial review. This innovation produced a shift in the ruling principle of legal orders; constitutionality replaced legality. 86

See James Boyd White, Law Teachers’ Writing, 91 MICH. L. REV. 1970, 1970 (1993).

87

See RAN HIRSCHL, TOWARDS JURISTOCRACY (2007).

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Over time, and in combination with other legal innovations, this shift altered the nature of legal reasoning in a way that requires legal theoretical sophistication. In a nutshell, the principle of constitutionality dictates that all norms and behaviors not conformant to the constitution are void. In addition, judicial review mechanisms were created, both by legislators and judicial will, to ensure the constitutionality of laws. As mentioned earlier in the paper, post-World War II European constitutions became morally charged documents as fundamental rights and other political-moral values were incorporated. The combination of these developments confronted European legal cultures with two possibilities: (1) Kelsenian formal judicial review would be restricted to declare the unconstitutionality of laws that were passed in violation of established procedures; or (2) 88 substantive judicial review in which all laws against constitutional norms but also 89 principles, rights, and values ought to be deemed void. This development requires increased theoretical sophistication from legal practitioners in two ways. First, rights adjudication presupposes a specific style of legal reasoning. Because European constitutions establish a normative ideal at which law should aim, legal cases should be reconstructed in this new mix of teleological and deontological reasoning. For example, if one wants to claim that the act of forcing tobacco companies to include health warnings on their package designs violates the right to economic initiative, one has to face the counter rights claim that smoking violates public health. Alexy offers such an example taken from an actual case: The Court qualifies the duty of tobacco producers to place health warnings regarding the dangers of smoking on their products as a relatively minor interference with freedom of occupation. By contrast, a total ban on all tobacco products would count as a serious interference. Between such minor and serious cases, others of moderate intensity of interference can be found. In this way, a scale can be developed with the stages “light,” “moderate” and “serious.” Our example shows that valid assignments following this scale are possible. The same is possible on the side of the competing reasons. The health risks resulting from smoking are high. The reasons justifying the interference therefore weigh heavily. If in this way the 88

89

I am oversimplifying things. Different jurisdictions work with distinct objects of constitutional review.

There is important variation among legal orders. For example, judicial review and rights-talk is not as prominent in some Scandinavian countries. See, e.g., Ran Hirschl, The Nordic Counternarrative: Democracy, Human Development, and Judicial Review, 9 INT’L J. CONST. L. 449 (2011), http://icon.oxfordjournals.org/content/9/2/449.full.pdf.

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intensity of interference is established as minor, and the degree of importance of the reasons for the interference as high, then the outcome of examining proportionality in the narrow sense can well be described—as the Federal Constitutional Court has in 90 fact described it—as “obvious.” In other words, rights adjudication requires constant balancing between different legal 91 values and norms that, in turn, necessitates sophisticated legal argument and usage of empirical evidence in order to establish the needed teleological claims. If we now reconsider the above quotation from Alexy, determining how to specify what should count as light or severe restrictions as well as determining which right is more important is far from obvious. If rights are not of equal importance, then a minor restriction of a weightier 92 right may trample a severe restriction of a lesser right. Furthermore, constitutional adjudication often has to rely on extra-legal disciplines. For instance, the discussion of whether restrictions in access to professions are constitutionally justified demands an inquiry into the effects of monopolies, and thus resort to economics. Constitutional adjudication also requires normative skills in the creation of the projected axiological horizon of the constitutional project. Thus, determining whether forbidding same-sex marriage, or cutting wages and pensions of civil servants, breaches the principle of equal treatment, entails, even if not explicitly articulated, both normative and ideological 93 arguments. Secondly, changes in legal reasoning triggered by the combination of reported legal and political developments favor the appearance of public-interest litigation or cause94 lawyering, that is, normatively oriented legal practice. In other words, the constitutionalization of legal orders and new constitutional reasoning reveal cracks in positivist legal practice. Constitutions establish the normative project to be pursued by a given political and legal order. This normative vision, however, is not easily available for everyone simultaneously because, as demonstrated, principles and values are not of “yes or no” resolution, but need to be optimized. The constitutional normative project becomes an easy object of legal disputes voiced by those that disagree with historical 90

Robert Alexy, Constitutional Rights, Balancing, and Rationality, 16 RATIO JURIS 131, 136–37 (2003).

91

See Moshe Cohen-Eliya & Iddo Porat, American Balancing and German Proportionality: The Historical Origins, 8 INT’L J. CONST. L. 263, 269–70 (2010), http://icon.oxfordjournals.org/content/8/2/263.full.pdf. 92

See Ouroboros, supra note 3232.

93

It is hard to understand why, given the described developments in positive law, normative legal theory insists on talking about the good in isolation from established constitutional values. See Robin West, Towards Normative Jurisprudence, in ON PHILOSOPHY IN AMERICAN LAW 55 (Francis J. Mootz III ed., 2009). 94

See CAUSE LAWYERING AND THE STATE IN A GLOBAL ERA (Austin Sarat & Stuart Scheingold eds., 2001).

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concretizations of the principles. Furthermore, because of the nature of constitutional questions, public-interest litigation or litigation aimed at declaring existing laws unconstitutional finds a new arena; but, as the perspective of reformist or constitutional litigation is that of the legislator, theory plays a role. It is still difficult to make explicitly feminist, economic, or political-theoretical claims in most positivist legal cultures, but, if legal professionals study the basics of these disciplines in legal education, they will have the resources as well as the awareness to mobilize the law in order to advance particular normative projects. Thus, the teaching of critical theoretical perspectives is of paramount importance in making future legal practitioners aware of the possibilities of reforming the law from within legal practice. As a result, legal education based upon legal theory can become transformative not only of the legal order, but also of legal practice itself. Logically, the scope of the possibilities for this type of normative legal practice and its impact in a given legal culture is conditioned by, among other things, procedural rules; but, because constitutional judges have the final word in determining the constitutionality of laws and constitutional reasoning is far more openended, lawyers have strong incentives to engage in activist litigation. Finally, rights reasoning and rights adjudication also impact on legal practice. For instance, given the central position of constitutional courts in contemporary European legal orders, national parliaments have already started to modulate legislative bills, taking into account 95 the possible reaction of such courts. Consequently, lawmakers also need to get acquainted with this style of legal reasoning. II. The Transnationalization of Law Changes in law have also taken place outside the nation-state. In particular, the Europeanization of domestic laws and the emergence of the so-called transnational legal sphere are heavily impacting conventional legal practice. I believe these changes demand more theoretically sophisticated lawyers. Transnational law, as referred to often in this article, stands for normative phenomena of hybrid and ambiguous legal nature, that produce effects and guide behavior, such as: international rankings like the PISA assessment; product and food quality standards; private financial rules; internet-related disputes; international financial and construction contracts; and transnational arbitration. Transnational law creates a challenge for legal education as it requires a legal practice that is less based upon propositional knowledge of law and more reliant on the development of skill sets, personal relations, creative

95

See ALEC STONE SWEET, GOVERNING WITH JUDGES: CONSTITUTIONAL POLITICS IN EUROPE (2000).

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lawyering, and a legislative point of view applied to the concrete case. Lawyers have to 97 become “creative problem solvers” or display “the ability to rise above the technical 98 level.” The point is that lawyers involved in transnational legal disputes will have to engage with lawyers from different legal jurisdictions with distinctive styles of legal 99 reasoning. It will become increasingly important to learn how to think and act like, for instance, a common law or an Asian lawyer, rather than solely relying on foreign 100 substantive law. This is because in transnational legal disputes, the legal framework is often uncertain, soft, and rudimentary. In other words, legal advice and planning, contracts, and legal disputes, are to be solved by intense negotiations with the counterparties. Even if international standard contracts, model laws, arbitration rules, and 101 other harmonized procedures exist, these are still optional or de jure. As Quack reasons, in the transnational sphere, lawyers act as “advisors and draftspersons,” “disseminators 102 and standard setters,” and “public experts and lobbyists.” That is, lawyers engage in activities ranging from contractual innovation and concrete problem-solving to helping establish general transnational norms. In conjunction, the internationalization of commerce, the mix between private and public rules and goals, and the apparent autonomy of the transnational commercial world all conjure a lawyer that is aware of his or her role as a legislator and a mediator across distinctive legal cultures. Importantly, the transnationalization of law and disputes 96

Transnational law’s impact on legal curricula across the world has been widely discussed even though it is difficult to understand what exactly is transnational law and why all the hype around it. For a critical view, see Catherine Valcke, Global Legal Teaching, 54 J. LEGAL EDUC. 160 (2004) (emphasizing that first we need to determine the goals we want to pursue through the subject). On transnational legal education, see T. Alexander Aleinikoff, Law in a Global Context: Georgetown's Innovative First Year Program, 24 PENN ST. INT’L L. REV. 825, 825– 27 (2006); Duncan Bentley & John Wade, Special Methods and Tools of Educating the Transnational Lawyer, 55 J. LEGAL EDUC. 479 (2005); Simon Chesterman, The Evolution of Legal Education: Internationalization, Transnationalization, Globalization, 10 GERMAN L.J. 877 (2009); Efrén Rivera-Ramos, Educating the Transnational Lawyer: An Integrated Approach, 55 J. LEGAL EDUC. 534 (2005). 97

Janet Weinstein, Coming of Age: Recognizing the Importance of Interdisciplinary Education in Law Practice, 74 WASH. L. REV. 319 (1999) (arguing that lawyers currently have to address many non-legal questions and only an interdisciplinary education and a holistic approach to legal problems can prepare them adequately). 98

John Flood Megalawyering In the Global Order: The Cultural, Social and Economic Transformation of Global Legal Practice, 3 Int’l J. Leg. Prof. 169, 190 (1996). 99

Sigrid Quack, Legal Professionals and Transnational Law-Making: A Case of Distributed Agency, 14 J. LEADERSHIP ORG. STUD. 643, 646 (2007). 100

See William Ewald, Comparative Justice (I): What Was it Like to Try a Rat?, 143 U. PA. L. REV. 1889, 1896 (1995).

101

William E. Scheuerman, Globalization and the Fate of Law, in RECRAFTING THE RULE OF LAW: THE LIMITS OF LEGAL ORDER 243 (David Dyzenhaus ed., 1999) (suggesting that this uncertain legal landscape will last because it actually favors the current capitalist and entrepreneurial model’s need for “flexible rules”). 102

See Quack, supra note 99.

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uncovers a simple fact: The judge is not the only decision-maker. Rather, legal practice is often a relational activity, and lawyers need skills for this relational network. In short, law graduates must be prepared to practice outside their national jurisdiction and think accordingly. Some even believe that legal education should be entirely revamped to accommodate the changes described above. For example, McGill Faculty of Law has created a new degree to deliver a “trans-systemic legal education” to prepare students to 103 understand and operate amidst multiple legal sources, legal orders and legal traditions. As highlighted here, the development of conceptual analysis and theoretical sophistication will be important in helping future legal practitioners to create a common vocabulary and understanding of law in these changed social and legal circumstances. III. The Europeanization of Law Another earlier important change in the legal landscape has been the Europeanization of law. In this article, I am not particularly concerned with how domestic laws are substantively determined by European law. Of course, to apply domestic law well, one needs to be knowledgeable of European law. Legal curricula have adapted by offering many courses on European law, some focusing on the general principles, institutions, and landmark cases, others specializing in, for instance, competition law. Some universities went even further as the examples of Maastricht’s University European Law School and the 104 Hanse Law School attest. Yet the Europeanization of law also justifies a more theoretically sophisticated and distinctive style of legal reasoning. Thus, as in transnational law, law students need to learn how to think like a European lawyer. As we shall see below, this implies greater familiarity with rights discourse and methodology as well as consequentialist reasoning. The first way in which European law has impacted practice in European legal orders has to do with rights adjudication taking place at the European Court of Human Rights (ECtHR) 105 and the European Court of Justice (CJEU). Indeed, domestic plaintiffs can now routinely claim before the ECtHR that the legislation of a given member state violates their rights under the European Convention. Despite the fact that the European Court of Justice is not 103

Helge Dedek & Armand De Mestral, Born to be Wild: The ‘Trans-systemic’ Programme at McGill and the DeNationalization of Legal Education, 10 GERMAN L.J. 889 (2009). 104

Recently, the European Commission announced the intention to have fifty percent of legal practitioners in the European Union attending European judicial training by 2020. See Communication from the European Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM (2011) 551 final (Sept. 13, 2011), http://ec.europa.eu/justice/criminal/files/2011-551-judicial-training_en.pdf. 105

See MICHEL DE S.-O.-L’E. LASSER, JUDICIAL TRANSFORMATIONS: THE RIGHTS REVOLUTION IN THE COURTS OF EUROPE 1–3 (2009).

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a specialized human rights court, its jurisprudence has favored the expansion of rights claims and the style of rights reasoning in legal practice across the European Union. A good 106 example of this is the chain of decisions after Francovich that established member-state liability for the breach of EU law. The jurisprudence of both courts thus provides new 107 avenues for normative legal practice that aims to change domestic law. The second way in which the Europeanization of law is impacting legal practice has to do with the style of legal reasoning displayed by the European Court of Justice. Indeed, the latter is widely held as deploying a teleological and contextual approach to adjudication that is geared towards European integration and the development of a common market. Fennelly provides a comprehensive formulation of the teleological method: The characteristic element in the Court’s interpretative method is, as stated at the outset, the so-called “teleological” approach, an expression frequently employed in writings, in argument by parties before the Court, and occasionally by Advocates General, but rarely used by the Court itself. The preferred language of the Court remains close to the van Gend en Loos formulation, namely that it is necessary to consider “the spirit, the general scheme and the wording,” supplemented later by consideration of “the system and objectives of the Treaty.” In more recent years, the idea of “context” has been added, and the prevailing wording, varying minimally from case to case, has been that it is necessary when interpreting a provision of Community law to consider “not only its wording, but also the context in which it occurs and the objects of 108 the rules of which it is a part.” 109

Let me illustrate these remarks with a contested issue in the Pringle judgment, i.e., the compatibility of the European Stability Mechanism with article 125 TFEU on the no-bail-out 110 clause. The latter’s telos lies in providing the states with incentives to enforce a strict 106

Case C-6/90, Francovich and Bonifaci v. Italy, 1991 E.C.R. I-5357.

107

See Ouroboros, supra note 32.

108

Nial Fennelly, Legal Interpretation at the European Court of Justice, 20 FORDHAM INT’L L.J. 656, 664 (1996).

109

Case C-370/12, Pringle v. Government of Ireland, Ireland and the Attorney General, (Nov. 27, 2012), http://curia.europa.eu/. 110

See Paul Craig, Pringle: Legal Reasoning, Text, and Teleology, 20 MAASTRICHT J. EUR. & COMP. L. 3 (2013).

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budgetary policy, thus preventing morally hazardous behavior. At the same time, the application of contextual reasoning forces us to consider a second teleological step: the goals and project of the EU constitutional project. Thus, according to Tuori, this “‘secondorder’ telos of the no-bail-out clause undoubtedly includes the financial stability of the 111 euro area as a whole.” Contextual considerations—the absence of a detailed legislative framework applicable to the issues at stake and the slow process of European integration—may also be taken into account by the Court. Thus, political science and comparative institutional analysis are tunes playing in the background; they cannot be ignored. Furthermore, paired with the above-mentioned legislative obstacles, the Court’s self-appointed role of ensuring the completeness of the EU legal order has led to a problem-based development of EU law and conceptual creativity. All in all, with these methods of legal reasoning in place, knowing and using EU law is quite a task for civil law 112 students, practitioners, and others. Sophisticated tools of legal reasoning, as well as theories that help with seeing the full specter of relationships, elements, and laws that are mobilized in determining what the applicable law is, will be paramount. D. Legal Professionals, Legal Disciplines, and the Growing Need for Legal Theory I started by claiming that legal theory is of little use for legal practice narrowly defined. Conversely, Section C has suggested that recent developments in legal practice demand greater theoretical sophistication from lawyers. In what follows, I wish to suggest that there is another reason why theory is increasingly important in legal education. This requires rethinking what we understand as legal professionals and legal careers and the skills these require. It may surprise many to learn that few works on legal education explicitly connect the optimal mix amongst theoretical, doctrinal, and practical training to the kind of legal professional that law schools are 113 interested in nurturing. For anyone acquainted with law schools around Europe, it is clear that law students are assumed to be a country’s future lawyers, judges, and 114 prosecutors. Because these legal roles typically operate in Europe within a highly 111

Id. at 10 (emphasis added).

112

Mark Dawson, How Does the European Court of Justice Reason?: A Review Essay on the Legal Reasoning of the European Court of Justice, 20 EUR. L.J. 423 (2014). 113

For two recent exceptions, see James R. Maxeiner, Integrating Practical Trainng and Professional Legal Education, in THE INTERNATIONALIZATION OF LAW AND LEGAL EDUCATION 37 (J. Klabbers & M. Sellers eds., 2009); Ulen, supra note 48. See also Harold D. Lasswell & Myres S. McDougal, Legal Education and Public Policy: Professional Training in the Public Interest, 52 YALE L.J. 203 (1943). Notice that Ulen’s argument and Lasswell & McDougal’s argument are much more radical than mine, because they justify legal education on the basis of advances in legal science and a normative view of what lawyers should do, without necessarily relating it to the needs of actual legal practice. 114

For a similar assumption in the U.S., see generally SUSAN ECHAORE-MCDAVID, CAREER OPPORTUNITIES IN LAW AND THE LEGAL INDUSTRY iv (2007).

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positivist legal culture, doctrinalism in legal education is self-justifying. What about other legal careers? Some graduates will become lobbyists, public-interest advocates, litigators, clerks to lawmakers, lawmakers, academics, or will work for regulatory agencies, such as 115 competition or financial-markets’ authorities. In other words, they will enter a professional world that requires competence well beyond training concerning how to 116 make formalistic legal arguments before judges. Furthermore, even if some begin their careers as traditional lawyers, some graduates may well move on, sooner or later, to fulfill 117 different professional roles in either private or public sectors. Finally, some lawyers and judges will also practice and specialize in new legal disciplines. There are also additional reasons why legal theory is necessary in the education of these legal professionals. Novel disciplines, such as competition law, require legal practitioners who can understand and speak the language of economics. For instance, defining the relevant market of any given product for the purpose of determining market power cannot be performed without complementary knowledge in economics. Similarly, determining whether an oligopoly is in place may well require a complicated evaluation of whether there is an alternative, rational economic explanation for apparently concerted price adjustments. Economics, however, cannot usurp law in legal practice. Economic concepts 118 are only a source of law if they are, in fact, recognized by law. Thus, it is not enough to study competition law and microeconomics separately; for legal practice, one needs to understand how economic arguments can impregnate legal reasoning. The simple fact that legal professionals will join with lobbying groups, regulatory agencies, 119 and lawmakers will further force them to see law as a social engineering tool: A mode of 115

I am not suggesting that these professions will crowd out classical legal careers but am calling attention to the fact that if the law degree educates students interested in a broad range of careers, then it should also become more responsive to changes in the skills required by such professions. 116

See Simon, supra note 14, at 492–93. Regarding European law, see Flood, supra note 98, at 192 (discussing how lawyers often have to engage in “non-legal activities” such as lobbying in order to both influence law-making according to their clients’ interest and be able to understand the point of view of European institutions on existing law). 117

Flood, supra note 98, at 170.

118

This gap justifies many critiques of EU competition law by economists who find, for instance, the pursuit of social justice or the political protection of small businesses and enterprises to be unjustified on efficiency grounds. 119

The link between careers and education allows me to evade a critique that can be made of Ulen. See Ulen, supra note 48. Let me remedy this omission. He argues that legal education needs to be more theoretical in order to catch up with the most recent developments in legal research. But this is a seriously biased argument that assumes that legal education and the faculty composition of law schools ought to follow developments, whichever they are, in legal science. In this way, legal education trains students irrespective of the demands of

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governance that provides incentives, facilitates compliance and strategic reactions, as well as one that is in tune with the protection of gender equality, or recognizes social disadvantage. In essence, projecting the effects that a law may trigger has become the bread and butter of a growing number of professionals. Regulatory agencies are a good example of this trend. Recently, the Bank of Portugal and the Portuguese Securities Market Commission, like other banks and agencies throughout the world, had to decide—even if the decision appeared to be made by the EU—how to manage the possible imminent bankruptcy of the biggest Portuguese private bank. This required taking into account systemic risk, protection of trust in capital markets, depositors’ rights to preserve their savings, differentiated responsibility of shareholders and owners of obligations as well as the division between subordinated and non-subordinated obligations—all issues that required decisions that transcend the boundaries of an exclusively and traditional legal 120 answer. Lawmaking—modernized in recent times with increased attention on legislation as a science, theories of regulation, and legislation as jurisprudence (legisprudence)—also requires greater theoretical sophistication via law and social sciences and law and critical studies. Parallel to this development, there is increased importance of regulatory impact 121 assessment studies as a fundamental tool to increase the quality of legislation. A recent strategy adopted at the EU and OECD levels is the Better Regulation agenda which aims to improve the quality of lawmaking by subjecting important bills to ex ante impact assessment studies, e.g., the REACH regulation. This comprises economic, administrative, social, distributive, gender, and other possible impacts of the legislative proposals. Furthermore, ex post studies to measure actual effects of regulation are to be promoted, making legislation and the act of legislating an experimental social-scientific activity. To comply, lawyers need to update the basic assumptions of human and social behavior with which they generally work. Rather than common sense and rule-of-thumb, or comparative law support, legislative studies are forcing lawmaking to come to terms with states of the art in economics, sociology, and psychology. Arguably, the discipline making legal practice and thus, contra Ulen, the disjunction between education and practice may widen. Ulen’s argument reveals two unjustified assumptions: (1) That law should be studied as an empirical science; and, (2) that practice should not necessarily co-determine university education. Ulen’s thesis also omits the fact that most law professors of elite American law schools have little practical experience and little influence outside those universities. See Richard B. Cappalli, The Disappearance of Legal Method, 70 TEMP. L. REV. 393 (1997). 120

Cf. RICHARD SUSSKIND, THE FUTURE OF LAW: FACING THE CHALLENGES OF INFORMATION TECHNOLOGY (1996) (suggesting the market for legal services is changing due to technology and pressure from other markets and forcing lawyers to start acquiring a whole new set of skills and functions), with Larry E. Ribstein, Practicing Theory: Legal Education for the Twenty-first Century, 96 IOWA L. REV. 1649 (2011) (offering a more condensed account). These authors further the idea that legal practice and what counts as a legal professional is changing and this needs to be factored in legal education. 121

See REGULATORY IMPACT ASSESSMENT: TOWARDS BETTER REGULATION? (Colin Kirkpatrick & David Parker eds., 2007).

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the biggest impact so far has been economics, since most of regulatory impact assessment studies’ potential lies in the use of a common metric to measure costs and benefits of different options to achieve a given goal. Here, solid theoretical knowledge will advocate for cost-benefit analysis, cost-effectiveness, and other procedures, as well as information constraints. Furthermore, despite lawyers’ criticism of cost-benefit analysis as putting a price on everything and assuming that all values are equal, these are assumptions that can 122 be modeled differently. Indeed, cost-benefit analysis can account for distributive effects, and in any case, best practice suggests that analysis should never be carried out by policymakers. Viscusi, a leading risk-analysis author, famously showed, against conventional wisdom, that 123 society makes a profit for every packet of cigarettes smoked. He explained that differentials in results stem from the fact that studies refused, on moral grounds, to quantify savings in medical expenses and pensions, arising from smokers’ lower longevity, 124 as an economic benefit. Furthermore, regulatory studies may be tailored to list costs and benefits without any quantitative measurement, or decision-makers may decide that gender or distributive criteria should prevail, notwithstanding the substantiality of costs. A simple qualitative analysis based upon economic incentives may suggest that a policy of freezing rents, such as the one adopted in Southern European countries during the twentieth century, may well play against the professed objective of providing affordable housing for those in need. Why? If rents are frozen, tenants already bound by rental agreements are clearly benefited, for they pay increasingly less in rent over time. Conversely, landlords have no incentive for upkeep since income from rents cannot be raised in the foreseeable future. Furthermore, because they know that future rental agreements will be subject to the same limits, landlords have incentives to charge very high prices to new tenants in order to account for the loss of future capacity to raise rents. Deterioration in construction is also likely, as well as many void dwellings. Thus, the aim of the legislation is defeated. I do not wish to be misinterpreted here. I am critical of the economic account of human action and doubt the behavioral economics therapy. Be that as it may, law and economics, as well as other disciplines that investigate human action like psychology or sociology, confront us with a naked truth: Lawmakers write explanatory memoranda and laws based on implicit assumptions about human behavior, legal compliance, and the role and effect

122

Matthew D. Adler & Eric A. Posner, Rethinking Cost-Benefit Analysis, 9–10 (Harvard Law Sch. John M. Olin Ctr. for Law, Economics, & Business, Working Paper No. 72, 1999). 123

See W. Kip Viscusi, The New Cigarette Paternalism, 25 REG. http://object.cato.org/sites/cato.org/files/serials/files/regulation/2005/12/v25n4-13.pdf. 124

See id.

58,

62

(2002),

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of regulation within society. The role of the new lawyer—and part-time social scientist— consists in being able to understand how new findings impact the quality and effectiveness of legislation. The bottom line is that developments such as the Better Regulation agenda will trigger an increase in the demand for lawyer-economists or lawyers sensitive to an understanding of law and its effects in context. As a young researcher, I became an associate to the European Network for Better Regulation, an academic and practitioners’ outlet that discussed national agendas on the evaluation of legislation. The most frequently voiced concern by local partners was the lack of human resources equipped with the capacity to perform actual regulatory impact assessment studies. E. Conclusions: What Kind of Legal Theory? In a nutshell, this article suggests that the importance of legal theory in and for legal practice cannot be determined by legal theory’s intrinsic features. Instead, we need to differentiate amongst styles of legal theory and combine this knowledge with the current Zeitgeist in legal life. Within this framework, I have claimed that most legal theory is useless for conventional legal practice as traditionally understood in Europe. However, recent developments in law—constitutionalization, Europeanization, and transnationalization—demand stronger theoretical sophistication. This applies both at the descriptive level—i.e., in order to know, understand, and apply existing law—as well as at the normative level—i.e., to mobilize law to promote social change. Furthermore, I have suggested that, once legal practice is more broadly defined, it would encompass careers that require lawyers to adopt a legislative point of view. This task demands a socialscientific and normative approach to law. Finally, taking into account that the interests of 125 theorists and practitioners of law may always and inevitably be in conflict, and that legal practice is often skeptical of legal theory’s value, this article has suggested that it should be 126 up to the latter to justify its place in legal education. Such an arrangement would overcome some of the limitations of seeing law and legal 127 128 education as purely determined either by academics or practitioners. This balance is 125

See Andrew Halpin, Law, Theory, and Practice: Conflicting Perspectives?, 7 INT’L J. LEG. PROF. 205, 218 (2001).

126

It is important to dispel the idea that academics do not need to justify what they do. See, e.g., STEFAN COLLINI, WHAT ARE UNIVERSITIES FOR? (2012) (arguing in favor of humanities or non-technical education in universities). See also Ribstein, supra note 9, at 1651 (suggesting that legal academics have been very successful in teaching what they choose). 127

128

See Ulen, supra note 48, at 326.

See Learned Hand, Have the Bench and Bar Anything to Contribute to the Teaching of Law?, 24 MICH. L. REV. 466 (1926).

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particularly important in Europe, where a strong positivist and formalist approach to legal practice still prevails. A focus on contemporary specific legal developments and their entanglement with different theories and philosophies also enables us to confront recent arguments in favor of the teaching of legal philosophy. For instance, Flores makes a case for the importance of theory by appealing to a historical analysis and comparing Langdell’s 129 and Holmes’ approaches to law. As I hope I have shown, there is little to gain from reissuing debates in isolation from the actual demands and developments in legal practice, the substance of law, lawmaking, and legal academia. Only the million-dollar question remains: What then should we be teaching as legal theory? I will clarify the argument made so far and address some anticipated objections. First, to maximize the understanding of the role that theory plays in legal education and legal practice, a compulsory course in legal theory must be offered at the beginning of any law education. Such a course would clarify how different forms of legal practice require correspondingly different styles of legal theory and communicate clearly the core attitudes and careers, and the different theoretical skills they require. Broadly speaking, these are conventional legal practice, transformative practice, and legal roles that ask for a legislative point of view. Crucially, such a subject would teach the basic idea that there is no discussion about the law without conceptualization and theorization, even if these remain unarticulated. The approach sketched here avoids doing so in purely theoretical fashion and consequently in isolation from specific professional and institutional developments. Second, I believe that a compulsory subject in legal theory should consist of an introduction to both legal reasoning and multiple theories of law, showing how different conceptualizations of law and legal problems trigger varying answers. Thus, legal theory should be a window into critical legal studies, law and economics and policy, theories of 130 regulation and law-making, anthropological studies of legal practice, law and gender, cause lawyering, law and literature, and other theoretical approaches to law. As emphasized throughout this article, however, attention must be paid to showing how law and social sciences and law and humanities are distinct from one another and intersect legal practice differently. Third, legal theory should be taught from a problem-based perspective. Thus, students should learn “by doing” the difference between making descriptive and normative claims, and how these can be mobilized from various legal roles. What does this mean? Teaching should mix theoretical lenses with the concrete materials—cases, contracts, impact assessment studies—provided by the different developments in legal practice and legal careers—i.e., constitutionalization, Europeanization, transnationalization, scientificization of law. In other words, the teaching of legal theory should have as a reference legal 129

See Flores, supra note 79, at 131.

130

See, e.g., BRUNO LATOUR, THE MAKING OF THE LAW: AN ETHNOGRAPHY OF THE CONSEIL D’ ÉTAT (2010).

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reasoning and how the latter communicates with normative legal practice, inventiveness in 131 transnational legal practice as well as lawmaking and institutional design. Before readers ask, “How on earth do you expect to teach such sophisticated legal materials to first-year students?” I acknowledge that designing and choosing materials for such a course, which sensitizes students to the roles theory may come to play in law, requires much work and care. Importantly, theoretical ideas are not communicated in isolation from specific everyday legal events and materials. Furthermore, a general course in legal theory should not replace specialized courses such as law and literature, law and economics, legal sociology or constitutional law, as discussed below. Such a course could be administered with a highly flexible schedule throughout the year, alternating between conventional lectures and intensive one-day workshops. Fourth, and perhaps radically, I submit that no general jurisprudence should be taught per se, given its lack of usefulness for legal practice and the fact that it is a largely bankrupted enterprise. As shown, the “existence and essence of the domestic law question” is hardly relevant nowadays. If anything, general jurisprudence could be a resource to approach significant problems defined outside of its discourse, such as the study of transnational law. I reiterate that one should follow a problem-based approach and focus on concrete 132 events that link different normative spaces, such as the Kadi judgement or internet disputes to mention but two examples, rather than theorizing in abstracto the nature of the transnational legal sphere according to a list of features that any legal system should display. Studying Austin, Hart, Kelsen, Dworkin, Raz, and many others could suit an elective course in legal theory. It would be, however, more appropriate to call that “A History of Analytic Jurisprudence.” Fifth, and related to the last point, the course in legal theory I advocate is entirely at odds with Varga’s own proposal that starts thus: Accordingly, it deals, firstly, within the paradigms of legal thought, with the Methodological directions in thinking (through the example of legal development [by the classical Greek antiquity and especially dikaion justice, the Roman praetorian law and Justinian’s codification, the Enlightened absolutism and the French Code civil], of geometry [of Euclid, as challenged by Bolyai/Lobachevsky, and ending in Einstein’s 131

See STEPHEN TOULMIN ET AL., AN INTRODUCTION TO REASONING (1984); NEIL MACCORMICK, RHETORIC AND THE RULE OF LAW (2005). For a philosophical articulation of the view that knowing the law consists in following the forms of argument recognized in the practice of law, see PATTERSON, supra note 18. 132

Joined Cases C-402/05 P & C-415/05 P, Yassin Abdullah Kadi & Al Barakaat Int’l Found. v. Council & Commission, 2008 E.C.R. I-6351.

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revolution], as well as of the potentialities—in human thinking making use of texts—of Autonomy with fertilising ambiguity [exemplified by the New Testament’s parabolic argumentation, Cicero’s rhetorical testimony, Augustine’s confessional style, the Talmudic lesson of tradition accumulated, 133 Orthodox Christianity, and Modern “irrationalism”… . Varga’s work is worth mentioning here because it starts from a similar concern to mine: The decay of “legal philosophy as an educational subject” in continental Europe. Furthermore, his paper offers the most comprehensive articulation of the “philosophy of teaching legal philosophy” written in recent times. Thus, it is doubly paradoxical that a contemporary work complaining about the poor condition of legal philosophy’s teaching offers as therapeutic a course in legal theory that practically covers landmarks of the whole comparative history of cultural, religious, social, methodological, and philosophical thinking about the law. In other words, both the content of Varga’s proposal and the argumentative strategy employed—assuming that the benefits of reading Cicero, Aristotle, or Leibniz for legal and cultural education, as well as legal practice, are obvious—appear to be part of the problem we both want to address. With such a program, however, one is highly unlikely to promote a legal theoretical education that appeals to students in general and helps some of them in their future legal practice. I do not wish to engage in empty polemics. One of my most formative legal-education experiences was studying legal theory at University of Trento Faculty of Law at a time when legal reasoning was approached in a purely abstract way, by means of studying pre-Socratic philosophers including Thales, 134 Parmenides, Heraclitus, and others. Only eight students enrolled on this module. My point is simple: The travails of legal theory cannot be overcome by preaching to the 135 already converted. There are three possible objections that could be launched against the case I have made here. First, some may argue that my analysis dissolves legal theory as an autonomous subject by reducing it to specialized disciplines such as constitutional law, law and economics, or European legal reasoning. Thus, why insist on teaching a separate course in legal theory? Such a course gives students, from the outset of their legal education, a picture of the possibilities, uses, and limits of different theories and methods before they jump into fully-fledged specialized courses in which disciplinary biases are often hidden or lost within the details.

133

Varga, supra note 3, at 170.

134

See FRANCESCO CAVALLA, LA VERITÀ DIMENTICATA ATTUALITÀ DEI PRESOCRATICI DOPO LA SECOLARIZZAZIONE (1996).

135

See, e.g., Cotterrell, supra note 3, at 182.

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Second, one may object that the case I make for legal theory’s relevance does not apply to ordinary legal practice, and, thus, speaks only to a legal elite or elite law schools. Having been brought up in a small town in Portugal, I am well aware of the fact that legal practice in big cities bears little resemblance to that which takes place in the countryside. This hardly scratches my argument however. I am not advocating for an overhaul of legal education modeled after theories, nor have I argued that we ought to make several legal theoretical courses compulsory. A course along the lines sketched above simply provides a primer in legal interpretation as well as insight into the different ways in which law can be mobilized. Basically, even if not useful on a daily basis, legal theory will make students aware that law could always be different from how it is, while providing some tools to make things happen. The final objection may disagree with my apparently disenchanted view of legal practice and legal theory. This is a thorny issue, given my natural interest in humanities, but here is my reply. First, we are talking about only a single course in legal theory. It cannot possibly, nor is it designed to, provide a blueprint for an entire legal education. Second, despite my interest in ethical reflection and some experience in teaching ethics, I doubt the effects of heavy emphasis in ethical education. I have come to share Bernard Williams’s fear that 136 philosophical inquiry may well destroy ethical knowledge. Moreover, it is also difficult to establish that morally educated persons make better concrete decisions. Third, I share a pragmatist commitment to social life and, as such, I am interested in the role of values in actual social practices rather than values as ideal constructs. I have tried to demonstrate that, with the constitutionalization trend, law absorbed relevant moral values that now need to be dispensed judiciously through legal practice. The legal theory in which I believe acknowledges this phenomenon and, thus, focuses on concrete problems and materials rather than abstract and theoretical speculation on the relationship between law and justice. Lastly, because my analysis distinguishes between legal theories that are more explicitly normative than others, and discusses how different legal roles can engage in transformative legal practice, the utopian dimension of law is safeguarded.

136

See BERNARD WILLIAMS, ETHICS AND THE LIMITS OF PHILOSOPHY (2006).

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Articles Tamanaha and His Critics: Transatlantic Reflections on the “Crisis” in Legal Education By Lawrence Donnelly*

Abstract In this article, Lawrence Donnelly, an American born and trained attorney who is now a Lecturer & Director of Clinical Legal Education in the School of Law at the National University of Ireland, Galway, considers Professor Brian Tamanaha’s seminal Failing Law Schools, a comprehensive critique of legal education in the United States. The article first thoroughly outlines and analyses the central lines of argument in Failing Law Schools and then evaluates the scholarship written in response to it. The article next compares and contrasts the state of play in legal education in the US with what is happening in Western Europe and posits that, for a variety of reasons, law schools on the eastern side of the Atlantic Ocean may actually be better – and more realistically – placed at present than their US counterparts. Lastly, the article urges that legal educators around the world continue an open dialogue on the “crisis” Professor Tamanaha presciently identifies in a concerted effort to ensure that law students receive the best possible training to equip them for working in legal careers that may not closely resemble those pursued by their predecessors in light of rapid globalization, ever-improving technology and consequent changes to how legal services are provided.

*

B.A., cum laude, College of the Holy Cross (1996); J.D., magna cum laude, Suffolk University Law School (1999). The author wishes to thank his colleague, Dr. Conor Hanly, for the long loan of Failing Law Schools and the numerous conversations about legal education that helped to shape this article.

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A. Introduction: Whither Legal Education in 2015? “Legal education is a broken, failed, even corrupt enterprise. It exalts and enriches law professors at the expense of lawyers, the legal profession, and most of all the students 1 whose tuition dollars finance the entire scheme.” These are the words of Professor James Chen, the eminent former dean of the Louis D. Brandeis School of Law at the University of Louisville. Peruse U.S. media outlets, and one will discover a plethora of news items and opinion pieces proclaiming a terrible state of affairs in legal education. New law graduates are overburdened with debt, have a difficult time landing legal jobs, and are suffering a precipitous decline in salaries. Some law schools have been sued for allegedly massaging 2 figures to improve law school standing to draw more tuition dollars. In the wake of these alarming trends, many legal academics have proposed changes in the traditional model of 3 U.S. legal education—most notably, to reduce the three-year degree to two years. While widespread media reports on legal education are troubling, Brian Tamanaha’s tour 4 de force on the topic, Failing Law Schools, has been far more distressing. Tamanaha, the William Gardiner Hammond Professor of Law at Washington University School of Law, has a sterling track record as a scholar and professor, and has published widely in 5 jurisprudence, his area of specialty. Who he is, and what he has done, renders his comprehensive critique in Failing Law Schools more compelling, and difficult to rebut, than 6 mainstream journalistic accounts of the “crisis” in legal education. Notably, however, his 7 arguments are not rooted primarily in pedagogy, but in economics. This article first outlines and evaluates the arguments made in Failing Law Schools and then considers the responses to Tamanaha. His critics have voiced countless objections to 1

See, e.g., BRIAN TAMANAHA, FAILING LAW SCHOOLS (John M. Conley & Lynn Mather eds., 2012).

2

J. Maureen Henderson, Why Attending Law School is the Worst Career Decision You’ll Ever Make, FORBES (June 26, 2012), http://www.forbes.com/sites/jmaureenhenderson/2012/06/26/why-attending-law-school-is-theworst-career-decision-youll-ever-make/. 3

Reforming America’s Legal Education: http://www.economist.com/node/21571213/.

The

Two-Year

Itch,

THE

ECONOMIST

(Feb.

2

2013),

4

TAMANAHA, supra note 1; see also Michael Olivas, Ask Not for Whom the Law School Bell Tolls: Professor Tamanaha, Failing Law Schools, and (Mis)Diagnosing the Problem, 41 WASH. U. J.L. & POL’Y 101 (2013) (describing Failing Law Schools as “apocalyptic” and a “shrill call to arms”). 5

See Philip Schrag, Failing Law Schools—Brian Tamanaha’s Misguided Missile, 26 GEO. J. LEGAL ETHICS 387, 392 (2013) (noting that Tamanaha has produced a great deal of scholarship—not all of it practical in orientation). 6

Id. at 387; see also Legal Education Reform, N.Y. TIMES (Nov. 25, 2011), http://www.nytimes.com/2011/11/26/opinion/legal-education-reform.html?_r=0 (positing that “case method” still employed in U.S. law schools was dated by the 1920s and a relic by the 1960s). 7

See TAMANAHA, supra note 1, at xii.

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the analytical methodology and the conclusions reached in Failing Law Schools. Three main categories of criticism exist. First, critics assert that Tamanaha overstates the economic burden law graduates face. Second, they claim that his book is a harangue against the free market, which can be relied upon to work and will also itself correct the current “crisis” in legal education. Finally, in a wider sense, his pessimism underestimates the long-term value of a law degree. This article lastly questions the import, if any, of this ongoing debate in the context law schools—in Ireland, specifically, and in Western Europe, generally—now find themselves. This article posits that law schools on this side of the Atlantic, which face similar challenges as U.S. law schools, may actually be better placed than U.S. law schools overall in 2015. Simultaneously, this article ponders what legal educators might do to ensure we continue to “roll with the punches” in the rapidly changing climate of technology and globalization. This article concludes with a parting thought on the need for international dialogue of what the future holds for legal education. B. Failing Law Schools: Problems and Solutions? Brian Tamanaha opens Failing Law Schools with an anecdote of his time at St. John’s University School of Law in New York City. He recounts when then-Dean Rudy Hasl 8 announced his resignation. At least two of his fellow professors were in a celebratory 9 mood, and they toasted the Dean’s departure with plastic cups of whiskey. Tamanaha notes many who were happiest about the news were the guiltiest of contributing to the law school’s decline in reputation and to its increasingly fraught atmosphere. They were not producing scholarship; they devoted minimal time to students and teaching; they were seldom present at the law school; they were indulging in private law practices and 10 consultancies; and they had become bitter and cynical about legal education. Legal academics, regardless of where in the world they are, will undoubtedly recognize their underperforming colleagues in Tamanaha’s description of the problematic state of play at St. John’s in 1997. To some extent, the recollection of Tamanaha’s personal experience synopses his comprehensive and damning evaluation of American legal education in the early twenty-first century. The fourteen subsequent chapters of Failing Law Schools are divided into four parts: (1) Temptation of self-regulation, (2) law professors, (3) the US News ranking effect, and (4) the broken economic model. The 8

See id. at 1 (stating that Dean Hasl has come under attack on the legal blogosphere as well for claiming that the media underestimates the long-term value of a law degree); see also Elie Mystal, Outgoing Law School Dean Tries To Slip In One Last Dumb Comment, ABOVE THE LAW (Nov. 9, 2012), http://abovethelaw.com/2012/11/outgoinglaw-school-dean-tries-to-slip-in-one-last-dumb-comment/. 9

See TAMANAHA, supra note 1, at 1.

10

See id. at 2.

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following summarizes each part with particular attention to issues also faced by law schools on this side of the Atlantic. I. Temptation of Self-Regulation Tamanaha outlines a 1995 lawsuit filed by the U.S. Department of Justice against the American Bar Association (ABA), which alleged “legal educators have captured the ABA’s 11 law school accreditation process.” In many American states, only graduates of ABA accredited law schools are entitled to sit for the bar examination. The ABA ultimately settled the lawsuit, and entered into a consent decree where it agreed to: not share information about pay levels for legal academics in connection with accreditation processes; not exclude for-profit law schools, per se, from being accredited; eliminate the prohibition students from transferring from unaccredited to accredited law schools; and to include individuals from outside the ranks of legal academia on their accrediting 12 committees and teams. As Tamanaha observes, this was “[a] humiliating capitulation by 13 the ABA . . . .” Next, he considers whether Juris Doctor programs—the three-year course of law study following an undergraduate degree—must necessarily be three years. As one law school dean has remarked, “[O]ne of the well known facts about law school is it never took three years to do what we are doing; it took maybe two years at most, maybe a year and a 14 half.” Tamanaha charts the complex history of how legal education in the U.S. came to be a three-year, postgraduate course of study, and argues there is no compelling justification 15 for why it must be so. He claims that although some lawyers greatly benefit from, and 16 embark upon, careers for which three years of academic training is useful, many do not. 17 For them, a two-year course would be just fine. He argues law schools should be entitled 18 to decide whether its degree is two or three years in duration. He admits that the elite law schools would stay as they are, and many with less sterling reputations would embrace 11

Id. at 11.

12

See id. at 13–14.

13

Id. at 14.

14

See id. at 20 (quoting Big Think Editors, Stanford Law’s Larry Kramer on the Law School Revolution, BIG THINK (Aug. 2, 2010), http://bigthink.com/the-voice-of-big-think/stanford-laws-larry-kramer-on-the-law-schoolrevolution). 15

See id. at 20–25.

16

See id. at 27.

17

See id.

18

See id.

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19

the two-year model. Some might argue that would lead to even further stratification, but Tamanaha claims the two-year course would provide “affordable access to becoming an 20 attorney.” Tamanaha lastly considers the reality that law is both an academic and a vocational discipline. This is particularly the case in the U.S., where the law schools assume— expressly or impliedly—some responsibility for professional training because the U.S. does not have professional training schools like those in Ireland, the United Kingdom, or 21 elsewhere. The tension between academic and vocational discipline is manifest in the complex relationship between those who teach “academic” law subjects and those 22 involved in “practical” teaching, such as clinical legal education. Tamanaha opines clinicians make valuable contributions to the experiences of thousands 23 of law students in the US, but may have overplayed their hands. Simultaneously, their representative body, the Clinical Legal Education Association (CLEA), assails those who teach “academic” law subjects for failing to prepare students for law practice and having overly favorable conditions of employment and salaries. The CLEA asserts the best way to 24 ameliorate things is to expand these employment conditions and salaries to clinicians. Insofar as clinical programs in the U.S. are extremely expensive for law schools, Tamanaha posits that clinicians “must consider the economic implications of clinical programs and separate more sharply those work conditions they would like for themselves from what is 25 necessary to best educate law students at an affordable cost.” But Tamanaha does imply that the extraordinary import placed on scholarship is a substantial, and to some extent 26 unjustified, impediment to some of CLEA’s worthy educational goals.

19

See id.

20

See id.

21

Marie-Luce Paris & Lawrence Donnelly, Legal Education in Ireland: A Paradigm Shift to the Practical, 11 GERMAN L.J. 1067, 1091 (2010). 22

Todd Berger, Three Generations and Two Tiers: How Participation in Law School Clinics and the Demand for ‘Practice-Ready’ Graduates will Impact the Faculty Status of Clinical Law Professors, 43 WASH. U. J.L. & POL’Y 129, 137–44 (2013). 23

See TAMANAHA, supra note 1, at 34–35.

24

See id. at 32–35.

25

Id. at 35; see also Paul Campos, The Crisis of the American Law School, 46 U. MICH. J.L. REFORM 177, 191–92 (2012) (stating that clinical legal education programs in the U.S., which typically require an extremely low staffstudent ratio and a high level of administrative support, have been one of the key factors in driving up the cost of legal education in the U.S.—even though many students never avail themselves of clinical course offerings). 26

See TAMANAHA, supra note 1, at 59–60.

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II. About Law Professors Tamanaha’s second part charts the American legal academy’s changes over the last century. In short, average teaching loads have declined significantly, while average salaries have climbed equally significantly. As for salaries, in 1965, the average annual pay for a full-time law professor at a US law school had risen to $16,749 ($120,110 adjusted for inflation) and went up to $30,000 27 ($215,200 adjusted for inflation) for the best paid in their ranks. The most reliable recent data, which only accounts for approximately one-third of all U.S. law schools and does not include many of the elite law schools paying the highest salaries, features in the 2013 28 edition of the Society of American Law Teachers (SALT) newsletter. Data reveals an average salary for full-time legal academics, spanning from newly hired assistant 29 professors to full professors, but not including deans, that is well in excess of $150,000. These figures do not account for the summer research stipends—up to $30,000—virtually all the law schools provide, and any additional income legal academics derive from 30 practice, consultancy, media work, and so on. The high rate of pay has always been predicated on the fact that legal academics are highly educated and could make 31 substantially more in full-time law practice. As Tamanaha notes, however, practicing lawyers typically work much longer, and more tedious, hours, and successful performance on law school exams is no guarantee that one would have “cut it” in the rigors of corporate 32 law practice. Looked at any way—and there is no doubt what can be garnered from the SALT newsletter understates the average—American legal academics are now extremely 33 34 well paid. Their students help bear the cost of their salaries. In 1941, the teaching load was 6.71 hours per week at elite U.S. law schools, 7.65 hours per 35 week at mid-tier law schools, and 8.66 hours per week at lower ranked law schools. As of 27

See id. at 46 (citing William Ferguson, Economics of Law Teaching, 19 J. LEGAL EDUC. 439 (1967)).

28

2012–13 SALT Salary Survey, SALT EQUALIZER content/uploads/2013/06/SALT-salary-survey-20131.pdf. 29

See id.

30

See id.

31

See TAMANAHA, supra note 1, at 46–47.

32

See id. at 47–48.

33

(May

2013),

http://www.saltlaw.org/wp-

Suffice it to say that legal academics everywhere else will undoubtedly salivate at their American counterparts’ salaries. 34

See TAMANAHA, supra note 1, at 51–53.

35

See id. at 40.

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2006, teachers at elite law schools taught 3.97 hours per week, and those at schools with 36 lesser reputations taught 5.57 hours per week—and these figures continue to decline. The justification for this marked reduction has been to allow more time to produce scholarship. Yet Tamanaha notes that well-established scholars have continued to be prolific; spending less time in the classroom has had little effect on legal academics who are either somewhere in the middle or at the bottom when it comes to writing and 37 productivity. Moreover, law school deans have rarely penalized underperformers by 38 allocating them additional teaching hours. Conversely, Tamanaha notes that the deliberate “academicization” of U.S. law schools, with more time and emphasis placed on research output and less on teaching, has led to the marginalization of American legal scholarship. As Justice John Roberts, Chief Justice of the United States Supreme Court, once put it, “[W]hat the academy is doing, as far as I can 39 tell, is largely of no use or interest to people who actually practice law.” As a jurisprudence scholar himself, Tamanaha is keen not to disparage the value of scholarship for scholarship’s sake, yet cites a recent study of 385,000 U.S. law review articles—forty percent which are never cited and eighty percent which are cited less than 40 ten times. He notes law professors used to write articles about legal doctrine, often together with, or after, consulting with practitioners and judges, but this no longer counts 41 as legal scholarship. Tamanaha attributes this new reality, at least in part, to the background of new law teachers, who are more likely to have Ph.D. degrees in law or other 42 disciplines than to have spent any time in law practice. The system law schools created, and perpetuated, is responsible for the new reality. In this context, and while not demeaning academic research, Tamanaha observes that “not all law schools and not all law professors [‘especially at lower ranked schools where graduates have a lower expected income’] must be oriented toward research” and “society would not suffer if the mountain 43 of writing now coming out of law faculties is cut down to a less extravagant size.” 36

See id. at 42.

37

See id. at 44–45.

38

See id. at 45.

39

Id. at 55 (quoting Adam Liptak, Keep the Briefs Brief, Literary Justices Advise, N.Y. TIMES (May 21, 2011), http://www.nytimes.com/2011/05/21/us/politics/21court.html?pagewanted=all&_r=0); see also Harry Edwards, The Growing Disjunction Between Legal Education and the Legal Profession, 91 MICH. L. REV. 34 (1992). 40

See TAMANAHA, supra note 1, at 56.

41

See id. at 56–57.

42

See id. at 57–59.

43

Id. at 61.

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In summing up his exposé on inconvenient truths for the US legal academy, Tamanaha details the additional costs—which are born to a great extent by students—inherent in the 44 “less teaching, higher salaries” model law schools have embraced. He concludes, “While 45 Harvard has the financial heft to pull it off, most law schools do not.” III. The US News Ranking Effect In the third part of Failing Law Schools, Tamanaha turns his attention to the American law 46 school ratings published annually by US News & World Report magazine: “Despite many criticisms from legal academics that the rankings are misleading and counterproductive, it is undeniable that the US News rankings now play a substantial role in shaping the way American law schools are evaluated by students, alumni, employers, and even many 47 faculty.” This central fact of life for law schools in the US has had myriad consequences. Tamanaha focuses in on the most disturbing consequence: To improve their position in the US News rankings, many American law schools have played “fast and loose” with figures 48 relating to graduate employment and salaries; others have outright lied. Tamanaha does not shy away from naming those law schools whose behavior has been ethically questionable. For instance, Villanova University Law School was forced to admit it 49 submitted inflated Law School Aptitude Test (LSAT) scores on several occasions. The University of Illinois College of Law admitted students with high grade point averages 50 (GPA) without requiring an LSAT score. At least one elite institution, Northwestern 51 University Law School, hired its unemployed graduates to improve statistical showings. When reporting the numbers of employed graduates, a huge percentage of law schools boost figures by including paid employment—whether their jobs require a law degree or 52 involve law at all. This behavior prompted lawsuits from students, and a number of blogs,

44

See id. at 62–68.

45

Id. at 68.

46

See id. at 71 (stating that rankings have been published on an annual basis since 1987).

47

Robert Jones, A Longitudinal Analysis of the U.S. News Law School Academic Reputation Scores Between 1998 and 2013, 40 FLA. ST. U. L. REV. 721, 722–23 (2013). 48

See TAMANAHA, supra note 1, at 71–84.

49

See id. at 74.

50

See id. at 82–83.

51

See id. at 73.

52

See id. at 71–72.

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such as Third Tier Reality and Inside the Law School Scam, which law professors, students, 53 and other anonymous stakeholders contribute to. As Tamanaha concludes: [S]ince students rely heavily on the US News rankings in their decision, schools are forced to maximize their rank to succeed in the competition. Law schools are helpless to do otherwise as long as these conditions hold. . . . A conscientious dean who refused to engage in questionable number reporting or any of the other dubious practices risked not just her continued tenure as dean but the standing of her institution, which would pay the price for her scruples by looking worse than competitor institutions that were being less 54 forthright. Perhaps the most tangible consequence of the US News rankings has been its perpetuation of elite law school dominance and the career prospects of students from wealthy backgrounds, who don’t require financial assistance to access these institutions, and the 55 myriad gilded doors their imprimatur ultimately opens. IV. The Broken Economic Model

56

Tamanaha focuses on the recent explosion of costs for legal education. Elite law schools have led this disturbing trend. For instance, Yale Law School’s yearly tuition was $12,500 in 57 1987; $26,950 in 1999; and $50,750 in 2010. By any measure, this extraordinary—and many would say outrageous—increase in less than twenty-five years vastly outpaces the 58 rate of inflation. All law schools have taken a similar pattern. The median tuition rates for 53

See id. at 75–78.

54

Id. at 83–84.

55

See id. at 96–103. (detailing the rise in the number of scholarships being offered to many law schools aspirants with high GPAs and LSAT scores. Of course, the top law schools only offer scholarships to a tiny sliver of outstanding students. Those students who are “next best” will be offered admission, but little financial assistance that they will not need to pay back. Consequently, “next best” students who are not financially well off are more likely to attend less highly-ranked law schools which offer them scholarships). 56

Running to nearly eighty pages, this is, by far, the lengthiest section of Failing Law Schools. It is dealt with in relatively short shrift here because the situation in the U.S. is different to what prevails in Europe. 57

See id. at 109.

58

See id. at 108.

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US private law schools were $15,438 in 1985; $24,988 in 1995; $33,021 in 2005; and 59 $39,496 in 2011. Average tuition at public law schools rose by $15,000 between 2002 and 60 61 2012. Again, the rate and extent of increase are staggering. Why the increase? Tamanaha attributes the rapid rise in law school tuitions to seven 62 factors. The first two are probably the most significant. First, “[l]aw faculties have grown owing to reduced teaching loads to facilitate research and the expansion of clinical 63 programs and legal writing staff.” This stems from the drive to produce scholarship, which is emphasized by the US News rankings, and from complaints a series of reports 64 indicating graduates were not prepared for law practice. The second factor is the surge in 65 law professor pay, prompted by competition for the most productive legal scholars. The remaining five factors are: The jump in pay at corporate law firms, which increased the number of law school applicants and helped law professors argue for higher salaries; the broader introduction of large grants to support research output; merit, partial, and full scholarships to attract a stronger caliber of students; the siphoning off of law school revenues by the larger universities of which they are a constituent part; and funding 66 reductions by state legislatures who control the budgets of public law schools. What have been the effects of the increase? The primary, and most dramatic, impact on 67 law graduates has been the amount of debt they must service. The average educational debt—including both undergraduate study and law school—was $15,676 in the mid-1980s, 68 69 and $47,000 in 1999. It was $87,538 in 2010. The last figure is astonishing. At the same time, as law schools have produced more and more graduates, the number of high paying, entry level jobs has diminished. These jobs are usually available only to graduates of the 59

See Campos, supra note 25, at 177, 182.

60

See TAMANAHA, supra note 1, at 108.

61

The author has witnessed this firsthand. Tuition at my alma mater, Suffolk University Law School in Boston, was $19,500 in my final year, 1998–99. Tuition for academic year 2014–2015 was $45,900. 62

See TAMANAHA, supra note 1, at 126–27. The reasons Tamanaha offers are unassailable.

63

Id. at 126.

64

See id.

65

See id.

66

See id. at 126–27.

67

See id. at 107–108.

68

See id. at 109.

69

See id.

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highest ranked law schools or, to a lesser extent, to those who finish at the top of their 70 class at law schools held in lower esteem. Those who do not obtain law jobs starting in the six figures find themselves in lower paid legal employment or, increasingly and alarmingly, in jobs which do not require a law degree, and inevitably find themselves 71 struggling with huge debt. Some even default. Income-based repayment plans and progressive legislation facilitating student loan forgiveness after debt have been serviced 72 for a requisite time period and have made things more bearable for people in difficulty. 73 Tamanaha argues this less than desirable option was intended only as a last resort. Yet it will be availed by a substantial percentage of law school graduates in the future to the 74 detriment of U.S. taxpayers. What does Tamanaha offer by way of solution? First and foremost, Tamanaha believes law school applicants should perform a financial cost-benefit analysis before taking the plunge. For a significant number, this will likely lead to the conclusion that law school, in the 75 present climate, is not worth it. As the declining numbers of students entering law schools now manifest, together with the climate of alarm and uncertainty prevalent at so many U.S. law schools, Tamanaha proffers that the economic foundations of the entire enterprise are collapsing, and change is necessary. He moots a number of reforms: Allowing differentiation in legal education—for instance, by allowing law schools to offer two-year degrees; cutting costs further by limiting or outsourcing clinical legal educations programs, requiring professors to teach more classes, cutting the number of 70

See id. at 112–88; see also Campos, supra note 25, at 177, 206–15.

71

See TAMANAHA, supra note 1, at 118–25.

72

See id. at 119–25. Income-based repayments are discussed in more detail in Part III.

73

See id. at 123–25.

74

See id. at 124–25. Tamanaha writes: Predictably, legal educators have now incorporated IBR (incomebased repayments) into their sales pitches. A law professor asserted in a national law magazine in 2011 that owing to the benefits of IBR law school debt Is not that bad. “After 25 years, any remaining loan balance is forgiven . . . . Moreover, the loan forgiveness aspects of these plans are basically back-end scholarships.” This is a cavalier way to speak about the lives of graduates who will spend the bulk of their professional careers in a program designed to help people in financial hardship. What law schools portray as a “back-end” scholarship the graduates will experience as a life-crimping financial ball and chain. From the standpoint of the national fisc, it is worrisome when law schools try to introduce naïve students to enter law school by telling them that they won’t really have to pay back the scary loan amounts if things don’t work out.

75

See id. at 135–44.

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administrators, and eliminating or downsizing law libraries; removing the American Bar Association from the accreditation process, and make unaccredited, less expensive law 76 schools a more viable option; and capping federal student loan totals by school. As Tamanaha himself admits in a later article written in response to the critics of Failing Law Schools, however, “[F]rankly, I don’t like my own proposals. . . . I would happily abandon my proposals for better ones. But I have yet to see any suggestions from critics 77 that solve the fundamental problems that plague legal education.” Perhaps there are no good solutions for the large problems identified by Tamanaha, or for the underlying “crisis” he argues the problems are emblematic of. Not all agree the situation is as dire. C. The US Legal Academy Responds In that same article, Tamanaha observes that he has been criticized for being against scholarship, against clinics, and against libraries, for being elitist and self-serving, for imperilling academic freedom, promoting a race to the bottom, ignoring the underserved population in society, trying to destroy the world’s greatest legal education system, threatening to undermine the rule of law, and for advocating a terribly retrogressive 78 system. Given the inherently incendiary nature of a book called Failing Law Schools, Tamanaha should not be surprised by serious criticism. The following displays an examination of compelling critiques of Tamanaha’s views offered by American legal academics. Professor Philip Schrag of Georgetown University Law Center rebuts Tamanaha’s arguments concerning the surging debts of American law graduates; he considers the effects of the income-based repayment (IBR) option, which was created by the Congress in 79 2007. Schrag posits Tamanaha overstates how burdensome law school debts will be in the long-term and understates how flexible the terms of repayment can be. He argues Tamanaha fails to recognize that, even if IBR is aptly characterized as a subsidy for higher

76

See id. at 172–81.

77

Brian Tamanaha, The Problems with Income Based Repayment, and the Charge of Elitism: Responses to Schrag and Chambliss, 26 GEO. J. LEGAL ETHICS 521, 539 (2013). 78

Id. at 538–39.

79

See Schrag supra note 5, at 387.

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education, nearly every aspect of American life is subsidized. Schrag’s “nuts and bolts” fiscal points about IBR are only bolstered by President Barack Obama’s recent executive 81 action to allow IBR for all federal student loan borrowers, regardless of when borrowed. The executive action will cap monthly student loan payments at ten percent of 82 discretionary income, and will forgive any remaining loan debt after twenty years. Notwithstanding legitimate concerns about holding the government accountable for the remaining debt, the actions of Congress and President Obama poke holes in Tamanaha’s arguments about overwhelming law graduate debt. Ohio State University Moritz College of Law Professor Deborah Jones Merritt and Daniel Merritt, while largely agreeing with Tamanaha’s findings in Failing Law Schools, propose a 83 radical, free market solution: To “deregulate the legal profession by abolishing 84 prohibitions against the unauthorized practice of law.” In the Merritts’ model, prospective clients could require specific levels of skill and expertise, depending on the 85 nature of the work, when hiring individuals or organizations. Acknowledging that some might scoff at this notion, the Merritts opine that clients, now better equipped than ever to research service providers in the “information age,” would retain the benefit of 86 consumer protection and anti-fraud legislation. Furthermore, they claim that attempts to regulate lawyers to prevent harm to clients have failed, and the Meritts’ model would not 87 have net impact on the inadequate provision of legal services to those without means. They argue law schools would still be involved in education and training, but the 88 methodologies would change, and the number of law schools would inevitably decrease. 89 Albeit unsettling, the Merritts claim these developments are likely to occur anyway. Undeniably, most involved in legal education and practice cannot imagine the Merritts’ vision, which lies well beyond the realm of Failing Law Schools. It is also undeniable that 80

See id. at 394–405.

81

Michael Stratford, Obama Expands IBR, Pushes Refinancing, INSIDEHIGHERED (June 10, 2014), http://www.insidehighered.com/news/2014/06/10/obama-expands-income-based-repayment-older-borrowerspushes-democrats%E2%80%99-student-loan. 82

See id.

83

Deborah Jones Merritt & Daniel Merritt, Unleashing Market Forces in Legal Education and the Legal Profession, 26 GEO. J. LEGAL ETHICS 367 (2013). 84

Id. at 380.

85

See id. at 381.

86

See id. at 381–82.

87

See id. at 383–84.

88

See id. at 382–85.

89

See id.

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the future will likely resemble the Merritts’ description more than the status quo, and there are glimpses of the Merritts’ vision in various reforms already initiated 90 internationally. Stanford Law School’s Professor Deborah Rhode writes that “[t]he recent chorus of ‘crisis’ 91 rhetoric should remind us of our obligation to do better.” Although Rhode is not sure 92 legal education is in such dire straits, she proposes several reforms. First, she argues law schools still do not offer sufficient opportunities for students to acquire practical skills; current clinical and related offerings, she maintains, are at the fringes of U.S. legal 93 education, and are taken up by a small percentage of students. Furthermore, she claims 94 this gap is not impossible to fill because it is resource intensive. Instead, a lot “can be accomplished with existing resources through case histories, problems, simulations, 95 cooperative projects, and interdisciplinary collaboration.” Next, she submits that values—broader than merely professional rules and including: Morality and ethics, pro bono service, and the duty of the legal profession and diversity—must become a core, 96 rather than a peripheral, component of legal education. Lastly, similar to Tamanaha, she 97 advocates differentiated law degrees. Specifically, Rhode explains that law schools could provide one or two year programs, which would allow graduates to provide basic legal services; that they could accept students who have not yet completed an undergraduate degree; and that they could develop niche areas of specialization with heightened reliance 98 on adjunct teachers and online course delivery. Professor Michael Hoeflich of the University of Kansas School of Law has a relatively straightforward solution to the “scathing indictment” in Failing Law Schools: 90

In another thoughtful article written in response to Tamanaha, one commentator provides a similarly futurist, though not as far-reaching and detailed, prescription, noting both that the challenges facing law schools are not altogether different from the challenges facing universities in general and that the only way for law schools to react is to embrace things like online education. See Ray Worthy Campbell, Law School Disruption, 26 GEO. J. LEGAL ETHICS 341 (2013). 91

Deborah Rhode, Legal Education: Rethinking the Problem, Reimagining the Reforms, 40 PEPP. L. REV. 437, 459 (2013) (original quotation marks omitted). 92

See id. at 438–59.

93

See id. at 448–49.

94

See id. at 449.

95

Id.

96

See id. at 450–53.

97

See id. at 455–56.

98

See id.

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“[R]einstituting a version of the traditional method of legal education: apprenticeship.” Hoeflich writes that the standard outmoded model of American legal education lasted so long because it was de facto differentiated—graduates of the elite law schools went into large firms or high-ranking positions in the federal government; graduates of other law 100 schools went into small firms, state government, or careers outside the law. Law schools, in their respective practices, reflected that difference because a greater premium 101 was placed on scholarship, and higher tuitions were charged at the former. This 102 distinction has slowly blurred. Students at public and lower ranked law schools are forced to pay exorbitant tuitions to embark upon potentially unsustainable career paths. To counter this reality, Hoeflich argues his state of Kansas should adopt another path to 103 qualify lawyers: Three semesters of law school and an apprenticeship of eighteen 104 months. To prevent the concerns inherent in the “outsourcing” of legal education, Hoeflich asserts: (1) There must be a system for accrediting law offices where law students could serve as apprentices; (2) the bar exam must be carefully crafted to ensure those who sit for it are fully prepared to do so; and (3) there must be clearly delineated and closely 105 monitored guidelines about who may supervise apprentices. Of the legal academics who posed trenchant objections to Failing Law Schools, the most 106 convincing is Professor Michael Olivas of the University of Houston Law Center. Olivas opens with fighting words: The real Cassandra, however, is Professor Brian Z. Tamanaha, whose apocalyptic book Failing Law Schools is a shrill call to arms, a substantial work of powerful charges and dire solutions, well-written and arriving at a crucial time in legal education, in the United States and worldwide. I believe he holds powerful diagnostic skills and has a storyteller’s narrative, but I believe his solutions are substantially wide of the mark, and would

99

Michael Hoeflich, Rediscovering Apprenticeship, 61 U. KAN. L. REV. 547, 547–48 (2012).

100

See id. at 551.

101

See id. at 552.

102

See id.

103

See id. at 553.

104

See id.

105

See id. at 556.

106

See Olivas, supra note 4, at 101.

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violate the code that remedial actions should, at the 107 least, do no harm. Notwithstanding the diminishing number of LSAT takers in recent years, Olivas claims the decline is relatively small, and the talent pool from which US law schools can choose continues to expand, with more international students seeking American legal 108 education. Moreover, he states Tamanaha glosses over the role students, by living beyond their means as law students, play in exacerbating debt burdens upon 109 graduation. Olivas also points out that, even though Tamanaha is highly critical of the role of the ABA in legal education, the reality is students at ABA-accredited law schools receive a superior education, manifested by far better bar passage rates than those who 110 attend unaccredited schools. Furthermore, Olivas refuses to accept statistics showing more law graduates working in non-legal fields as evidence of declining competence— 111 rather, they show the transferrable analytical value of the skills inculcated in law school. While conceding Failing Law Schools is a “needed wake up call,” Olivas opines Tamanaha’s 112 “solutions” would only exacerbate undeniable problems. Olivas alleges first that, if the powers that be acted upon Tamanaha’s attack on the existing student loan system, it would further stratify legal education and the profession, and ensure that substantially fewer putative law students would be able to access the financial 113 support they need. Additionally, Olivas refuses to accept the criticisms Tamanaha levels 114 at the American legal academy. The purported selfishness and indolence Tamanaha instances in Failing Law Schools belie Olivas’ experience of scholars committed to their 115 students, their institutions, and the law and legal system. Olivas states that the overinflated salaries Tamanaha cites are not reflective of the situation in many U.S. law schools, where junior faculty sometimes make as much, or more, than colleagues who 116 have been at the same institution for considerably longer. Lastly, Olivas forcefully argues 107

Id. at 101–02.

108

See id. at 109–10.

109

See id. at 111.

110

See id. at 111–12.

111

See id. at 126–27.

112

See id. at 115–18.

113

See id. at 118–20.

114

See id. at 119–30.

115

See id. at 120–22.

116

See id. at 121.

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“increasing the number and percentage of contingent and transitory faculty will diminish the overall quality of the enterprise, and should be resisted vigorously, rather than regressing to the churning mean of a part-time faculty, serving as independent 117 contractors.” D. (Ir)Relevance of Tamanaha’s Critique on this Side of the Atlantic? There is much to digest in Professor Brian Tamanaha’s Failing Law Schools and the American legal academy’s multi-faceted ongoing response. But what relevance, if any, does the burgeoning body of so-called “crisis literature” and subsequent debate have for those of us working on the other side of the Atlantic? It is to a consideration of this and consequentially related questions that this article now turns. Five areas, each of which features prominently in the “crisis” literature, and which are points of transatlantic convergence and divergence, are examined. This examination realizes there are common yet wholly dissimilar challenges confronting legal academics in the U.S. and Western Europe. It also leads the author to a conclusion, however tentative and generalized, that— whether one calls it a “crisis” or not—the current situation in the U.S. is slightly more daunting than it is here. I. Costs/Tuition The second most significant point of transatlantic divergence in legal education is the 118 matter of costs or tuition. The costs of attending American law schools, both public and private, rest comfortably beyond the imagination of most Europeans. Unlike the U.S., higher education in Europe is heavily government-subsidized. For example, the annual cost of studying for a full-time, three, or four year law degree in Ireland in 2014–2015 will be 119 €2,750—a tiny fraction of the average annual tuition at American law schools. Even allowing for a considerable rise in fees to study law in the UK in recent years, much of the 120 American literature on this point is inapposite to the European experience. As a result, legal educators operate in parallel universes. By way of examples, the most senior professors in Ireland, the UK, and elsewhere typically earn less than half of what similarly 117

Id. at 126.

118

By some distance, the most significant difference is that law is taught at the undergraduate level in Western Europe and at the postgraduate, doctoral level in the U.S. 119

The figures on annual fees for third-level students in Ireland, termed registration fees are available on the Citizens Information Service of Ireland website. Third-Level Student Fees and Charges, CITIZENS INFORMATION, http://www.citizensinformation.ie/en/education/third_level_education/fees_and_supports_for_third_level_educ ation/fees.html (last visited Aug. 7, 2015). 120

Rowena Mason, Universities Minister Refuses to Rule Out an Increase in Fees, THE GUARDIAN (Mar. 23, 2014), http://www.theguardian.com/education/2014/mar/23/tuition-fees-catastrophe-lib-dems-labour (noting that UK university fees have already tripled to up to £9,000 in 2012).

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placed colleagues are paid in the U.S., and are not bestowed institutional research grants as generous; administrative and other support for legal academics in Europe do not approximates what is available in the US; and clinical legal education and other experiential learning programs are not, nor can they ever be, as well-staffed, resourceladen, and personalized in Europe as they are in the U.S. Leaving aside all of the positive and negative consequences of the differing financial models, Tamanaha’s economic analysis, fundamental as it is to his view that American legal education is in “crisis,” is, at most, an outlying concern in Europe. II. Structures Commentators have explained that law school autonomy in the U.S. has eroded in recent years by virtue of being a part of a broader university. This gradual erosion has led to an increasing “emphasis on scholarship rather than professional training described by Tamanaha” and, despite the role of accreditation bodies as co-arbiters of law degree content, “in the long run the same sociological structures pushing university faculty toward valuing research and the same economic pressure pushing other departments toward 121 more efficient models will be felt in law schools.” Others claim the universities which law schools are a part of treat them as “cash cows” and deliberately inflate tuition to fund 122 other ventures and programs. In recent years, there has been a more rapid erosion of law school autonomy in universities in Ireland and elsewhere. The diminution was accomplished more quickly here because of law’s standing as one of a multitude of undergraduate academic disciplines that is not vocational in the same way it is in the U.S., given that law graduates must subsequently attend professional schools, combining both further study and structured 123 apprenticeship, before qualifying as lawyers. Once free standing entities, most law schools in Ireland are now part of larger colleges, which pair them with business schools or wide-ranging humanities disciplines. These changes, and the centralization initiatives that have typically accompanied them, show that a growing number of law schools do not have the independence they once did. It has been argued that this has had several detrimental effects. Namely, there are echoes of the “cash cow” factor cited above; ill-suited research metrics, and hiring and promotional criteria have been implemented and applied; and law 124 students now lack the same identity and sense of purpose had in the past.

121

Ray Worthy Campbell, Law School Disruption, 26 GEO. J. LEGAL ETHICS 341, 348, 353 (2013).

122

See Richard Bourne, The Coming Crash in Legal Education: How We Got Here, and Where We Go Now, 45 CREIGHTON L. REV. 651, 686 (2012). 123

124

See Paris & Donnelly, supra note 21, at 1070–78.

For a more detailed discussion on this point, see Lawrence Donnelly, Clinical Legal Education in Ireland: Some Transatlantic Musings, 4 PHX. L. REV. 7, 12–14 (2010).

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In contrast, with respect to the issue of structures, a common theme in the “crisis” literature is the notion that variation should be allowed in what is taught in a law degree and how it is taught. As these advocates observe, there are structural and institutional 125 obstacles to doing so. One advantage of not being responsible, explicitly or implicitly, for professional, in addition to academic, training in the law is that law schools in such jurisdictions can offer the courses they like. This has led to a proliferation at law schools in Ireland and throughout Europe of multi-disciplinary degrees and law degrees including a 126 foreign language component with a year spent abroad. In order to place problem-based learning at the core of its students’ educational experience, York Law School in the UK has recently done away with traditional classroom or lecture theatre instruction altogether. The curriculum centers on problem-based teaching with a heavy emphasis on clinical and 127 experiential legal education. This is a dramatic shift in university legal education in a still rather traditional setting. It will be interesting to evaluate the results of the “York experiment” in years to come. III. Pedagogical Innovation: Clinical Legal Education and Experiential Learning At the close of a reform-minded article drawing on historical debates about legal education and taking due account of more recent criticisms leveled in various reports and by members of the bar, Professor A. Benjamin Spencer, then of Washington & Lee University School of Law, writes it is time for legal academics in the U.S. to abandon the old ways of doing things and move “toward a truly twenty-first century program of professional legal 128 education that prepares graduates for practice.” University legal academics in jurisdictions where graduates must attend professional schools prior to being admitted to practice might justifiably bristle at this notion. That said, there can be no questioning the growth of clinical legal education programs and endeavors to promote experiential learning in Western Europe, once referred to as the “last holdout” in this sphere, in recent 129 years. These efforts, the purpose which does not aim to only produce “practice-ready” graduates, are nonetheless a departure from the old way of doing things on this side of the Atlantic. Those of us who have worked to introduce, expand, and enhance clinical legal education programs in Western Europe have always regarded the programs at U.S. law schools—which focus on “live client” interaction and student representation of actual 125

See Rhode, supra note 91, at 437, 446–56.

126

See Paris & Donnelly, supra note 21, at 1088.

127

See UNIVERSITY OF YORK, YORK LAW SCHOOL (Aug. 7, 2014), http://www.york.ac.uk/law/undergraduate/ (providing more information on the undergraduate curriculum at York Law School). 128

A. Benjamin Spencer, The Law School Critique in Historical Perspective, 69 WASH. & LEE L. REV. 1949, 2063 (2012). 129

Richard Wilson, Western Europe: Last Holdout in the Worldwide Acceptance of Clinical Legal Education, 10 GERMAN L.J. 823 (2009).

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clients in real cases, providing students with practical experience and a cognizance of the law’s capacity for promoting social justice in the process—as the “Rolls Royce” model to 130 aspire to. At the same time, it is intriguing and disheartening to read in “crisis” literature that there are sustainability issues for clinical legal education in the U.S. Tamanaha claims the objective of integrating skills training throughout the curriculum and ensuring that a majority of law school students take part in a clinic is “infeasible financially under the 131 current model, which allocates such large amounts of time to faculty scholarship.” The point is made elsewhere that “expenses associated with clinical legal education can be reduced through greater use of well-designed externship programs, which allow students 132 to obtain many of the same benefits at a radically reduced cost.” 133

Could clinical legal education really be in decline in the U.S.? Although the rhetoric emanating from certain quarters seems overly pessimistic, there is almost no doubt that clinics would be devastated if more American law schools move to a two year Juris Doctor degree. Students would surely take doctrinal courses to prepare for the bar exam, and 134 obtain practical experience outside of their studies. Moreover, if law schools are forced to cut spending, it is difficult to envisage an easier target for defunding than clinics. If those making the direst of predictions for U.S. law schools are ultimately proven correct, it could be that those of us in Europe whose clinics and/or experiential learning programs are externship or simulation-based are much better off relatively than had previously been thought. The birth of the European Network of Clinical Legal Education (ENCLE), focused on sharing experiences and resources internationally, and national organizations, like the Irish Clinical Legal Education Association (ICLEA), together with clinic-centric law schools, like Northumbria University Law School in the UK, might allow for this transformative pedagogical innovation to flourish and narrow the gulf between ourselves and the rest of 135 the world. 130

See Donnelly, supra note 124, at 9–11.

131

TAMANAHA, supra note 1, at 59.

132

Campos, supra note 25, at 177, 217.

133

As someone passionately committed to clinical legal education, I pose this question and scenario with a heavy and disbelieving heart. 134

Although it is not dispositive, the fact that the vast majority of law students who take part in clinical courses do so in their third year is indicative that clinical programs would become much smaller at many law schools and disappear entirely if the JD degree were shortened to two years. See Carole Silver, Getting Real about Globalization and Legal Education: Potential and Perspectives for the US, 24 STAN. L. & POL’Y REV. 457, 476 (2013). 135

For more information on ENCLE, see ENCLE (Aug. 7, 2014), http://encle.org/; for more information on ICLEA, see Recent Developments in Clinical Legal Education, PILA (Dec. 12, 2012), http://www.pila.ie/bulletin/2013/january-2013/16-january-2013/recent-developments-in-irish-clinical-legaleducation/; for more information on Northumbria University Law School, see NORTHUMBRIA LAW SCHOOL (Aug. 7, 2014), https://www.northumbria.ac.uk/about-us/academic-departments/northumbria-law-school/.

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IV. Research and Scholarship One of the most lamentable observations made in Failing Law Schools, and echoed in the responding articles and reviews, is that legal scholarship in the U.S. is becoming irrelevant. As Tamanaha notes, despite the growth—both in overall numerical terms and in individual length—of American law review articles, they are seldom referred to by the courts, of little 136 or no use to practitioners, and are often never, or rarely, cited after being written. It could be argued that legal scholarship in the U.S. might have much less impact now than it 137 138 did in the past. In Ireland, at least, things have not reached this unfortunate stage. Academic writings are often referred to in court judgments and feature prominently in practitioners’ work. Comments made by judges and practitioners in Ireland about the 139 scholarship of legal academics are reverential, not dismissive. Nonetheless, a trend outlined by Tamanaha in his examination of the reasons for the increasingly esoteric and practically irrelevant nature of legal scholarship in the U.S. is mirrored here, and may produce a similar outcome in time. In the US, law professors now typically have little or no 140 experience of law practice. Many have Ph.D. degrees either in law or another discipline. As such, they probably have neither the background nor the inclination to produce books and articles that will be useful to the legal profession. In Ireland, a PhD. has become the sine qua non of entry into the legal academy; a professional qualification or experience of 141 law practice now means little, if anything. Accordingly, it is an open question as to whether scholarship produced by the new and coming generations of Irish legal academics will remain as valued by lawyers and judges in the future. Still, the strong tradition in that regard, as well as a pronounced emphasis on impactful research and the fact that law review articles are ordinarily shorter and tighter in scope in European outlets than in their American counterparts, militate against an emulation of what has happened in the U.S.

136

See TAMANAHA, supra note 1, at 55–58.

137

David Hricik & Victoria Salzmann, Why There Should Be Fewer Articles Like This One: Law Professors Should Write More for Decision-Makers and Less for Themselves, 38 SUFFOLK U. L. REV. 761, 766–87 (2005). 138

See, e.g., THE IRISH ASSOCIATION OF LAW TEACHERS: 30 YEARS OF LEGAL SCHOLARSHIP (Thomas Mohr & Jennifer Schweppe eds., 2011). 139

For example, a cursory Westlaw search reveals that my colleague in the School of Law at the National University of Ireland, Galway, Tom O’Malley, is frequently cited and deferred to by judges of the Irish superior courts and by practitioners in the area of criminal law. 140

See TAMANAHA, supra note 1, at 57–58.

141

See Donnelly, supra note 124, at 14.

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Lastly, Tamanaha refers to what is a largely intractable truism of university life in all 142 disciplines everywhere: Academics producing little or no scholarship. A few academics are prolific scholars; a few are consistently poor underperformers; and the overwhelming majority fall somewhere in between. Other than reallocating tasks within a law school along the research-teaching-administration continuum to ensure greater equivalence of contribution, it is an extremely tough nut to crack. V. Graduate Career Prospects In asking whether an American law degree is a worthwhile investment in the early twentyfirst century, Tamanaha and others decry the tough job market facing today’s law 143 graduates. They also fret that American law graduates are no longer assured a career as 144 a practicing lawyer, or even in employment requiring a law degree. Again, these have long been facts of life in Europe, where historically, a significant percentage of people who 145 studied law have gone on to related, or even wholly unrelated, careers. Of course, the major difference is that American postgraduate legal education has a greater vocational dimension than undergraduate study in Europe. That distinction notwithstanding, it is in many respects advantageous and definitely less morally vexing to welcome and teach new law students who do not, and should not, have the same expectations of what path their law degrees will necessarily put them on. Informal polls taken at my own law school during the past academic year indicate that only about half of our students wish to qualify as lawyers in Ireland; the others desire either to use their law degrees to pursue other career options or to qualify as lawyers in other European countries or elsewhere around the globe. That they are younger and largely unencumbered by the same potentially crippling financial debt as U.S. law graduates allows them greater freedom to consider a panoply of career options. Notwithstanding the foregoing points, law graduates in Ireland and the UK, in particular, who want traditional legal careers as solicitors and barristers, are in an unenviable 146 position. As the number of law graduates, and those who come from non-law 142

See TAMANAHA, supra note 1, at 2; see also David Gregory, The Assault on Scholarship, 32 WM. & MARY L. REV. 993, 996–97 (1991). 143

See TAMANAHA, supra note 1, at 107–25.

144

See id. at 114–18.

145

Law schools in Europe do not deny that this is the case. My own law school, as do others, describes the diversity of previous graduates’ career paths as a strength and indicative of the versatility of a law degree. See Alternative Careers in Law, NUI GALWAY, http://www.nuigalway.ie/media/nuigalwayie/content/files/collegesschools/businesspublicpolicylaw/documentsf orms/Alternative-Careers-in-Law.pdf (last visited Aug. 8 2014). 146

See Alex Aldridge, Law Graduates Face a Bleak Future at the Bar, THE GUARDIAN (Nov. 25, 2011), http://www.theguardian.com/law/2011/nov/25/law-graduates-bleak-future-bar.

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backgrounds, has risen or stayed approximately the same, the number of opportunities for 147 a viable start in law practice has decreased. The unflagging popularity of law, and 148 expanded access to law study, coincided with a period of global economic calamity. Moreover, a variety of mooted, and already implemented, reforms to the legal profession could dramatically change the nature of law practice and ultimately mean that there will 149 not be the need for as many lawyers. Without delving into the specific circumstances of individual European countries, it suffices to say that law graduates in Europe intending to practice as lawyers will have to overcome different, but equally complex, obstacles as those in the U.S. if they are to succeed. It is not unduly pessimistic to state that their prospects are more uncertain and bleaker than those of previous generations. This new reality is inextricably intertwined with the inexorable march onward of technology and 150 globalization. VI. The Future: Overarching Thoughts This thorough review and analysis of the “crisis” literature in the U.S. and some considered reflection, undertaken concurrently with continuing dialogue with fellow legal academics in Europe, has led not to despair or panic, but to unease. That is healthy. Complacency must be the common enemy of all educators. Tamanaha and his critics have started a conversation that rages on in the American legal academy, but would be considered as other-worldly by many in Western Europe. The majority of the threats that must be overcome in the U.S. vary in nature, source, and extent from those in Europe. Some similar threats are on the horizon here, and there are also uniquely European matters that need to be addressed. It is this author’s view, however, that the threats in the U.S. are more imminent and will prove harder to overcome, at least in the short term. Money, as ever, is the central element in this calculus. The gulf between the expectations of American and European law graduates is another key factor. Whether Tamanaha’s rather apocalyptic end scenario comes to pass or not, some pain and restructuring lies ahead. On the bright side, that will create opportunities for reinvention and reinvigoration. 147

See id.; see also Shannon Sweeney, Law Graduates Face Difficulty Obtaining Employment, THE GLOBAL LEGAL POST (July 1, 2014), http://www.globallegalpost.com/big-stories/law-graduates-face-difficulty-obtainingemployment-51323138/. 148

See Aldridge, supra note 146.

149

The Legal Services (Regulation) Bill 2011 in Ireland contains such far-reaching reforms, though the Bill has not made its way through the parliament. See Legal Services Regulation Bill 2011 Law Society Annual Conference, DEP’T OF JUSTICE AND EQUAL., http://www.justice.ie/en/JELR/Pages/SP12000102 (last visited Aug. 8, 2014). 150

Adam Cohen, Just How Bad Off Are Law Graduates, TIME (Mar. 11, 2013), http://ideas.time.com/2013/03/11/just-how-bad-off-are-law-school-graduates/ (noting that globalization allows law firms to outsource work to India and other places where legal services are less expensive and that technological advances mean that software programs can perform previously labor intensive document review projects. Neither of these developments is good for recent law graduates—in the U.S. or in Europe).

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Finally, it is folly to seek to characterize the “crisis”—or whatever term one uses for it—as a strictly American phenomenon. Two incredibly powerful tidal waves—technology and globalization—touch upon all aspects of human life, legal education included, and affect us all. They are the prime movers behind the challenges legal educators currently encounter. The boundless quagmires engendered by technology and globalization range from the unique nuances of teaching the millennial generation to building law school curricula that 151 reflect the world’s interconnectedness. These may lie well beyond this article and the “crisis” that prompted its writing. Nonetheless, we must turn our collective attention and energies to such broader matters urgently. E. Conclusion It is hoped that this article, by shining a light from quite a different place on Tamanaha’s instantly seminal Failing Law Schools and its American progeny, and then measuring the import of that discourse comparatively in the context of European legal education, will stimulate further discourse among legal academics around the world in an era of unprecedented change and ever-mounting uncertainty. What is certain in 2015 is that interesting times—inevitably, they will be exciting and devastating at various junctures—lie ahead for all of us who are involved in, and committed to, the ambitious enterprise of legal education. For myriad reasons, now more than ever, we are all in this together.

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For more probing treatments of just these two examples, see Emily Benfer & Colleen Shanahan, Educating the Invincibles: Strategies for Teaching the Millennial Generation in Law School, 20 CLINICAL L. REV. 1 (2013); see also Anita Bernstein, On Nourishing the Curriculum with a Transnational Law Lagniappe, 56 J. LEGAL EDUC. 578 (2006).

Articles “I Don’t Take This Man to Be My Lawfully Wedded Husband”: Considering the Criminal Offense of “Forced Marriage” and Its Potential Impact on the Lives of Girls and Young Women with Migrant Backgrounds in Germany By Kerstin Braun*

Abstract In Germany, the practice of forcing a person to marry against his or her own free will was not explicitly penalized and did not attract much political attention until the beginning of the new millennium. Since the mid-2000s, however, the German legislature has enacted a number of laws concerning forced marriage, possibly due to increased public and media interest in honor-related gender violence in immigrant communities. In 2011, the German Criminal Code (StGB) was amended to include “Forced Marriage,” thus making forcing someone to marry an offense in its own right. In light of similar recent developments criminalizing forced marriages in other European jurisdictions—such as England and Wales—this article aims to critically assess the German legislation and its potential impact on victims and offenders. First, this article considers the German criminal legislation in detail. Second, it contemplates the underlying question of whether the introduction of criminal law as a repressive measure effectively addresses the issue of forced marriage. Third, this article contemplates non-legislative measures that could contribute to affording more holistic protection. Finally, it concludes that improving the situation for victims of forced marriage in practice requires more than adopting criminal law on the matter.

*

PhD (UQ), LL.M. (UQ); Lecturer in Law at the School of Law and Justice, University of Southern Queensland, Australia. Email: [email protected]. Many thanks to the editor and the editorial team of the German Law Journal for the professional and expedient process.

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A. Introduction I. Forced Marriage in Germany For decades in Germany, issues concerning forced marriage were neither publicly debated 1 nor on the political agenda. The reason behind the lack of attention to this practice, which often affects persons from immigrant communities, is unclear. Yet, the conduct fits Germany’s past philosophy of minimally interfering with affairs of immigrant families to preserve a functioning multicultural society. Moreover, in the past, the dominating concern was that debate on forced marriage in a public forum would discriminate and alienate certain religious or cultural communities living in Germany, thus contravening the 2 objectives of immigration and integration policies. Since the introduction of the new forced marriage legislation in 2011, German law defines a forced marriage as a marriage into which a third party coerces the victim by force or by 3 threat with an appreciable harm. A forced marriage is therefore characterized by the lack of free will on the part of the victim to enter into a marriage. A forced marriage differs from an arranged marriage, which also involves intervention by third parties, such as relatives, friends, or marriage brokers. In an arranged marriage the spouses may reject the 4 proposed partner, while in a forced marriage they may not. In Germany, an arranged 5 marriage is not penalized but considered a respected cultural tradition. 6

Forced marriage is often associated with Muslims of Turkish origin in Germany. The Turkish population is Germany’s largest immigration group and is thus statistically more 1

Karin Schubert & Isabella Moebius, Zwangsheirat—Mehr als nur ein Straftatbestand: Neue Wege zum Schutz der Opfer [Forced Marriage—More Than Just a Criminal Norm: New Ways to Protect Victims], ZEITSCHRIFT FÜR RECHTSPOLITIK 33, 33 (2006). 2

See id. (contemplating the past lack of discourse on the issue); see also Klaus Letzgus, Der neue Straftatbestand der Zwangsheirat [The New Criminal Offense of Forced Marriage], FAMILIE PARTNERSCHAFT RECHT 452, 452 (2011); DEUTSCHER BUNDESTAG: PLENARPROTOKOLL [BT] 17/96, at 10981 (During the passing of the 2011 legislation on forced marriages, the Federal Minister of the Interior at the time, Hans Peter Friedrich, pointed out that the new legislation aims to establish new integration policies that are based on the principles of promotion and encouragement (“Fördern und Fordern”).). 3

STRAFGESETZBUCH [STGB] [PENAL CODE], § 237; see also Wieck-Noodt, § 237, in MÜNCHENER KOMMENTAR ZUM STGB para. 1 (Wolfgang Joecks & Klaus Miebach eds., 2nd ed. 2012). 4

See Wieck-Noodt, supra note 3, at para. 27.

5

Initiative für Münchener Mädchen e.V. [IMMA], Zwangsheirat verhindern [Stop Forced Marriage], STADTRAT DER LANDESHAUPTSTADT MÜNCHEN 4 (2012), http://www.ris-muenchen.de/RII/RII/DOK/SITZUNGSVORLAGE/2746374.pdf (last visited Nov. 6, 2014). 6

Schubert & Moebius, supra note 1, at 34; see also Mohamed Fadlalla, Zwangsheirat—die Änderungen des Personenstandsgesetzes und das neue Gesetz zur Bekämpfung der Zwangsheirat [Forced Marriage—the Change of the Law on Civil Status], FAMILIE PARTNERSCHAFT RECHT 449, 451 (2011) (discussing that while some cultural and

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7

likely to be affected by the practice. However, forced marriages are not only found in Islamic cultures. The practice of forced marriage has also been described in Buddhist and Hindu societies, as well as in some African and European nations, such as parts of Greece 8 and southern Italy. Issues relating to forced marriage in Germany are inadequately researched and therefore, 9 for the most part, insufficiently understood. The little existing evidence available—namely assessments of cases reported to victim support organizations—suggests that girls and young women between the ages of sixteen and twenty-one with migrant backgrounds are 10 mostly affected by the practice. Because the number of females at risk of forced marriage appears much greater, this article focuses on girls and young women, while also acknowledging that boys and men can become victims of this practice. Due to limited research in this area, reliable figures of persons affected by forced marriage in Germany are scarce. Estimates by women’s support groups and the Federal Ministry for Family, 11 12 Senior Citizens, Women and Youth suggest that between 1,000 and 3,500 persons each 13 year are affected in some manner, with a much higher number of unreported cases. ethnic groups refer to Islam to justify forced marriage, Islam does not promote forced marriages and sets out that women should not marry without consent). 7

Starting in the 1950s, shortly after the end of the Second World War, foreign workers from Turkey were invited by the German Government as so-called “guest workers” to support Germany’s economy. Many second or third generation people of Turkish descent are now living in Germany. See Gokce Yurdakul & Anna Korteweg, Gender Equality and Immigrant Integration: Honor Killing and Forced Marriage Debates in the Netherlands, Germany, and Britain, 41 WOMEN’S STUD. INT’L F. 204, 208 (2013). 8

Ralph Göbel-Zimmermann & Manuela Born, Zwangsverheiratung—Integratives Gesamtkonzept zum Schutz Betroffener [Forced Marriage—Integrative Holistic Concept to Protect Affected Persons], ZEITSCHRIFT FÜR AUSLÄNDERRECHT 54, 54 (2007); Wieck-Noodt, supra note 3, at para. 2; Monika Schröttle, Zwangsverheiratung, Gewalt und Paarbeziehungen von Frauen mit und ohne Migrationshintergrund in Deutschland—Differenzierung statt Polarisierung [Forced Marriage, Violence and Couple Relationships of Women with and Without a Migration Background in Germany—Differentiating Instead of Polarizing], ZWANGSVERHEIRATUNG IN DEUTSCHLAND 145, 149 (Bundesministerium für Familie, Senioren, Frauen und Jugend eds., 2008); Jörg Eisele, § 237, in STRAFGESETZBUCH (Schoenke & Schroeder eds., 29th ed. 2014). 9

See Eisele, supra note 8, at para. 3.

10

Schubert & Moebius, supra note 1, at 33. While boys and young men can also be affected by such practices, anecdotal evidence suggests that the risk of girls and women becoming victims is much greater. See GöbelZimmermann & Born, supra note 8, at 54. According to a study by the Federal Ministry for Family, Senior Citizens, Women and Youth, girls and young women are affected in ninety-three percent of all cases. See Thomas Mirbach, Torsten Schaak & Katrin Triebl, Zwangsverheiratung, IN DEUTSCHLAND—ANZAHL UND ANALYSE VON BERATUNGSFÄLLENKURZFASSUNG 22 (Bundesministerium für Familie, Senioren, Frauen und Jugend eds., 2011). 11

Estimate by the women’s support organization Terre de femme in 2007. See Interview with Myria Böhmecke, Zwangsehen: Mütter drohen heiratsunwilligen Töchtern mit Selbstmord [Forced Marriage: Mothers Threaten Their Daughters Who Are Unwilling to Marry with Suicide], SPIEGEL ONLINE (Aug. 10, 2007), http://www.spiegel.de/politik/deutschland/zwangsehen-muetter-drohen-heiratsunwilligen-toechtern-mitselbstmord-a-499121.html (last visited Nov. 6, 2014).

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Public debate on the issue in Germany has increased since the first decade of the new millennium, possibly generated by the growing media interest in forced marriages and 14 honor-related gender violence in immigrant communities. One case receiving ample media coverage was the 2005 honor-related killing of twenty-three-year-old Hatun Sürücü, a young woman of Turkish and Kurdish descent. Hatun Sürücü grew up in Berlin with her family who had immigrated before her birth. She had divorced her husband, a cousin from Turkey, whom she married at age sixteen. She lived with her son outside the family home in a suburb of Berlin. Although living on her own, the young woman maintained contact with some of her family members. She embraced a western lifestyle without veil and traditional clothing, and the family suspected she engaged in amorous relationships 15 outside of marriage. Hatun Sürücü was killed by her eighteen-year-old brother at a bus stop in Berlin by three shots to the head for motives relating to dishonoring her family. Newspapers alleged that Hatun Sürücü’s murder was the sixth honor-related crime in 16 Berlin that year. Increased political attention to the practice of forced marriage accompanied the increased public and media attention. By the mid-2000s, several German states (Länder) had drafted legislative initiatives suggesting that the Federal Parliament should enact Federal criminal 17 laws explicitly penalizing forcing someone to marry in all German states. As a 12

Mirbach, Schaak, & Triebl, supra note 10, at 22. The research conducted by the Federal Ministry for Family, Senior Citizens, Women and Youth has been criticized in Germany as not being empirical and, therefore, as only being of suggestive nature. The study did not conduct research on victims of forced marriage itself but sent out questionnaires to support organizations in Germany to evaluate their experiences with victims of forced marriage. The study itself points out that the results of estimated victims have to be qualified as some victims may have sought help with different organization and may therefore be listed more than once. See Ulrike Schwarz, Zwangsheirat—Probleme in der Praxis [Forced Marriage—Problems in Practice], NACHRICHTENDIENST DES DEUTSCHEN VEREINS FÜR ÖFFENTLICHE UND PRIVATE FÜRSORGE 1, 2 (2013). 13

For an overview of older research studies on forced marriage in different German states, see Wieck-Noodt, supra note 3, at 16. 14

Göbel-Zimmermann & Born, supra note 8, at 54. For analysis on newspaper coverage of so-called honor killings in Germany, see generally Anna Korteweg & Gökçe Yurdakul, Islam, Gender, and Immigrant Integration: Boundary Drawing in Discourses on Honour Killing in the Netherlands and Germany, 32 ETHNIC & RACIAL STUD. 218 (2009). 15

For an overview and update on the case, see Barbara Hans, Geschwistermord—Die verlorene Ehre der Familie Sürücü, SPIEGEL ONLINE (June 27, 2011), http://www.spiegel.de/panorama/justiz/geschwistermord-die-verloreneehre-der-familie-sueruecue-a-777021.html. For media coverage of the case in English, see Derek Scally, Brother Gets Nine-Year Sentence for 'Honour Killing' of Sister, IRISH TIMES (Apr. 14, 2006), http://www.irishtimes.com/news/brother-gets-nine-year-sentence-for-honour-killing-of-sister-1.1038216. 16

17

Yurdakul & Korteweg, supra note 7, at 208.

See, e.g., DEUTSCHER BUNDESRAT: DRUCKSACHEN [BR] 767/04 (the initiative of the German state BadenWürttemberg); DEUTSCHER BUNDESRAT: DRUCKSACHEN [BR] 436/05 (the initiative of Berlin); DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 16/1035 (the initiative of the German Parliament); DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 17/4401 (the 2010 initiative of the German government, which led to the amendment of the German Criminal Code). For a historic overview of the different legislative initiatives, see Wieck-Noodt, supra note 3, at para. 19.

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consequence, forcing someone to marry against his or her own free will became 18 punishable as an explicit form of coercion in Germany in 2005. Yet, proponents of the introduction of a specific criminal statute on forced marriage suggested that explicit legislation could increase overall awareness that forcing someone to marry is a punishable 19 criminal offense in Germany. As a consequence, in July 2011 the German Criminal Code (StGB) was amended by the inclusion of Section 237, entitled “Forced Marriage,” making forced marriage an offense punishable by six months’ to five years’ imprisonment. II. Forced Marriage in Other European Jurisdictions Other European countries with large immigrant populations—such as France and Britain— 20 are also grappling with the phenomenon of forced marriages. France has not adopted explicit criminal legislation on this issue but has chosen to strengthen existing laws to 21 address the situation. In the past, Britain based its attempts to improve the situation for victims of forced marriage mostly on civil remedies, adopting the Forced Marriage (Civil Protection) Act of 2007 under which Forced Marriage Protection Orders prohibiting a person to force another 22 into marriage can be issued. In June 2012, however, the British Government announced that forced marriage would be made a criminal offense in its own right to combat the problem more adequately. On 16 June 2014, offenses relating to forced marriage 23 enshrined in the Anti-social Behaviour, Crime and Policing Act came into force. As a 18

On the legislative history, see Eisele, supra note 8, at para. 1.

19

See Johannes Eichenhofer, Das Gesetz zur Bekämpfung der Zwangsheirat [The Law to Fight Forced Marriage], NEUE ZEITSCHRIFT FÜR VERWALTUNGSRECHT 792, 794 (2011). 20

Brigitte Clark & Claudina Richards, The Prevention of Forced Marriages—A Comparative Approach, 57 INT’L & COMP. L. Q. 501, 501 (2008). See, e.g., Sundari Anitha & Aisha Gill, Coercion, Consent and the Forced Marriage Debate in the UK, 17 FEMINIST LEGAL STUD. 165 (2009) (analyzing forced marriages in the UK); see also Esther Efemini, Til Death Do Us Part: Forced Marriages in the UK, 79 CRIM. JUST. MATTERS 14 (2010). See, e.g., Alicia Lobeiras, The Right to Say "I Don't": Forced Marriage as Persecution in the United Kingdom, Spain, and France, 52 COLUM. J. TRANSNAT’L L. 896 (2014) (analyzing forced marriages in France in regards to asylum laws). 21

Aisha Gill & Anicee Van Engeland, Criminalization or ‘Multiculturalism Without Culture’? Comparing British and French Approaches to Tackling Forced Marriage, 36 J. SOC. WELFARE & FAM. L. 241, 247 (2014). 22

Forced Marriage Protection Orders are injunction orders prohibiting addressees to perform acts related to forcing someone into marriage. See id. at 244. For a discussion on whether forced marriage should be treated as a civil rather than a criminal matter and the UK government’s past policy, see Kaye Quek, A Civil Rather than Criminal Offence? Force Marriage, Harm and the Politics of Multiculturalism in the UK, 15 BRIT. J. POL. & INT’L REL. 626 (2013). 23

According to § 121 of the Act: (1) A person commits an offence in England and Wales if he or she— (a) uses violence, threats or any other form of coercion for the

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consequence, forcing someone into marriage is punishable with a sentence of up to seven years’ imprisonment in England and Wales. Moreover, breaching a Forced Marriage Protection Order is now penalized. Similarly, in European states such as Norway, Denmark, 24 and Austria, forced marriage has been explicitly criminalized. In comparison, it has been outlined that in Scotland no intention to penalize forced marriage—and thus follow the 25 initiative of England and Wales—can be detected. In light of recent developments in England, Wales, and other European countries, this article seeks to critically explore the effectiveness of criminal legislation governing forced marriage in Germany. In Part B, this article first considers forced marriage from an international perspective and examines what international obligations are placed on Germany in regards to protecting its state nationals from being forced into marriage. Subsequently, in Part C, this article critically assesses the criminal law dealing with forced marriage in Germany, and conceptual problems of the legislation are identified. Part D considers whether criminal law as a repressive measure generally has the potential to protect girls and young women with migrant backgrounds from forced marriages. The article concludes in Parts E and F that criminal law alone does not appear suitable to deal with forced marriage and that additional measures—such as specifically tailored support schemes for victims, intercultural dialogue, and interlinked support structures—may assist in offering affected girls and young women in Germany more holistic protection.

purpose of causing another person to enter into the marriage, and (b) believes, or ought to reasonably believe, that the conduct may cause the other person to enter into the marriage without free and full consent. (2) In relation to a victim who lacks capacity to consent to marriage, the offence under subsection (1) is capable of being committed by any conduct carried out for the purpose of causing the victim to enter into a marriage (whether or not the conduct amounts to violence, threats or any other form of coercion). (3) A person commits an offence under the law of England and Wales if he or she— (a) practices any form of deception with the intention of causing another person to leave the United Kingdom, and (b) intends the other person to be subjected to conduct outside the United Kingdom that is an offence under subsection (1) or would be an offence under that subsection if the victim were in England and Wales. The maximum penalty for forced marriage offenses is seven years. 24

Gill & Van Engeland, supra note 21, at 246.

25

Id. at 247.

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B. Forced Marriage as a Human Rights Violation According to international human rights law, forcing someone to marry constitutes a human rights violation. Germany, as a UN Member State and signatory to numerous treaties and conventions concerned with forced marriage, is therefore obligated to protect 26 the human rights of its citizens. According to Article 16(2) of the Universal Declaration of Human Rights, marriage shall be 27 entered into only with the “free and full consent of the intending spouses.” Since the 28 adoption of the International Covenant on Civil and Political Rights (ICCPR) and the 29 International Covenant on Economic and Social Rights (ICESR), which together with the Declaration are often referred to as the International Bill of Human Rights, the obligation that marriage can only be entered into with free and full consent of the future spouse has been enshrined in international treaty law. In addition, the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) stipulates that Member States shall afford women the right to freely choose a spouse and to enter into marriage with 30 their free and full consent. In some UN Member States, the ratification or the accession to an international convention or treaty automatically makes the content of the international instrument part 31 of the Member State’s national law. Upon ratification, the content of the legally binding

26

For analysis on human rights relating to forced marriage and Germany’s obligations under international human rights law, see Hanna Beate Schoepp-Schilling, Zwangsverheiratung als Menschenrechtsverletzung, Die Bedeutung der internationalen Rechtsinstrumente [Forced Marriage as a Human Rights Violation, the Meaning of International Law], 1 ZWANGSVERHEIRATUNG IN DEUTSCHLAND 201, 205–11 (Bundesministerium für Familie, Senioren, Frauen und Jugend eds., 2007); see also Letzgus, supra note 2, at 452. 27

G.A. Res. 217 (III) A, Universal Declaration of Human Rights (Dec. 10, 1948).

28

International Covenant on Civil and Political Rights, art. 23(3), Dec. 16, 1966, 999 UNTS 171 (entered into force for Germany Mar. 23, 1976); Gesetz zu dem Internationalen Pakt vom 19. Dezember 1966 über bürgerliche und politische Rechte, Nov. 15, 1973, BGBL. II at 1533. 29

International Covenant on Economic and Social Rights, art. 10(1), Dec. 16, 1966, 933 UNTS 3 (entered into force for Germany Jan. 3, 1976); Gesetz zu dem Internationalen Pakt vom 19. Dezember 1966 über wirtschaftliche, soziale und kulturelle Rechte, Nov. 23, 1973, BGBL. II at 1569. 30

Convention on the Elimination of All Forms of Discrimination Against Women, art. 16(1)(b), Dec. 18, 1979, 1249 UNTS 13 (entered into force for Germany July 10, 1985); Gesetz zu dem Übereinkommen vom 18. Dezember 1979 zur Beseitigung jeder Form von Diskriminierung der Frau, Apr. 25, 1985, BGBL. II at 647. 31

Referred to as monism. On monism, see generally DAVID WEISSBRODT & CONNIE DE LA VEGA, INTERNATIONAL HUMAN RIGHTS LAW: AN INTRODUCTION 343 (2007); see also PETER MALANCZUK, AKEHURST'S MODERN INTRODUCTION TO INTERNATIONAL LAW 63 (7th ed. 1997); DONALD ROTHWELL ET AL., INTERNATIONAL LAW: CASES AND MATERIALS WITH AUSTRALIAN PERSPECTIVES (2010).

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international instrument becomes fully justiciable in the national court system. In Germany, international treaties are considered to have the same effect as national legislation, where the international law is self-executing, meaning where the law is directly 33 applicable without further clarification. The German judiciary has found treaties to be non-self-executing where their obligations allow States’ discretion but also where treaties fail to expressly stipulate that they are self-executing. In these instances, translation 34 legislation is required in Germany. The international obligations relating to forced marriage grant Member States discretion on how to best implement and comply with the obligations in order to protect their state nationals from this practice. For example, international law does not specifically obligate 35 Member States to criminalize acts relating to forced marriage. Nevertheless, international human rights law places the obligation on Germany to enact efficient 36 measures and to comply with them in order to protect its citizens.

32

In other Member States, however, international instruments have no direct impact on national legislation until legislation is adopted by the Member State that “transports” these obligations into national law; this is referred to as dualism. 33

DANA ZARTNER, COURTS, CODES, AND CUSTOM: LEGAL TRADITION AND STATE POLICY TOWARD INTERNATIONAL HUMAN RIGHTS 97–98 (2014) (classifying Germany as a monist state). Grundgesetz [GG] [Basic Law] art. 59(2) (stating that “treaties that regulate the political relations of the Federation or relate to subjects of federal legislation shall require the consent or participation, in the form of a federal law, of the bodies responsible in such a case for the enactment of federal law. In the case of executive agreements the provisions concerning the federal administration shall apply mutatis mutandis”). AND ENVIRONMENTAL LAW

34

See also Katharine Young, The Implementation of International Law in the Domestic Laws of Germany and Australia: Federal and Parliamentary Comparison, 21 ADELAIDE L. REV. 177, 184 (1999). For further explanations on the situation in Germany, see JOSEF ISENSEE, HANDBUCH DES STAATSRECHTS DER BUNDESREPUBLIK DEUTSCHLAND 167 (3rd ed. 2007); see also ERNST BENDA, WERNER MAIHOFER, & HANS-JOCHEN VOGEL, HANDBUCH DES VERFASSUNGSRECHTS DER BUNDESREPUBLIK DEUTSCHLAND: STUDIENAUSGABE 1466–67 (1995). 35

See Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery, arts. 6(1)–(2), 1(c)(i), Sept. 7, 1956, 266 UNTS 3 (entered into force for Germany Jan. 14, 1958); Gesetz ueber den Beitritt der Bundesrepublik Deutschland zum Zusatzübereinkommen vom 7 September 1956 ueber die Abschaffung der Sklaverei, des Sklavenhandels und sklavereiähnlicher Einrichtungen und Praktiken, July 4, 1958, BGBL. II at 203 (stating that an obligation exists to criminalize practices similar to slavery including servile marriage). Whether forced marriages are servile marriages will depend on whether the perpetrator exercises powers attached to ownership. See Frances Simmons & Jennifer Burns, Without Consent: Forced Marriage in Australia, 36 MELBOURNE U. L. REV. 970, 984 (2012). 36

In some UN Member States, no international instrument—including legally binding instruments, such as treaties or conventions—has direct force until the State adopts legislation that transports these obligations into national law—the distinction between monist and dualist states. See generally Joseph G. Starke, Monism and Dualism in the Theory of International Law, 17 BRIT. Y.B. INT’L L. 6 (1936); Giuseppe Sperduti, Dualism and Monism, A Confrontation to Be Overcome, 3 IT. Y.B. OF INT’L L. 31 (1977); David Feldman, Monism, Dualism and Constitutional Legitimacy, 20 AUSTL. Y.B. OF INT’L L. 105 (1999).

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Possibly in an attempt to comply with its international obligations, Germany adopted the Act to Combat Forced Marriages and to Better Protect Victims of Forced Marriage in 37 2011. While some of the laws enacted amend Germany’s immigration laws, this article focuses exclusively on the adopted criminal legislation and its potential to effectively protect girls and women against forced marriage. C. Germany’s Legislative Response to Forced Marriage I. Legislation Explicitly Criminalizing Forced Marriage in Germany From 2005 to 2011, the act of forcing someone to marry had been punishable as an 38 expressly named form of coercion under Section 240 of the StGB. Yet, in 2011 the legislation was repealed, and German Parliament made “Forced Marriage” a specific 39 criminal offense in its own right. It is noteworthy that the title of the criminal offense, “Forced Marriage,” replicates common language used to describe this phenomenon while 40 the correct title for the criminal act would be “forcing someone to marry.” Why Parliament has relied on the popular language rather than using the legally more precise term is unclear, but it may be related to wanting to reach perpetrators and victims to 41 ensure that they understand what behavior is considered criminal. In Germany, according to Section 237(1) of the StGB: Whosoever unlawfully coerces another person by force or threat of appreciable harm to conclude a marriage shall be liable to imprisonment from six months up to five years. The act is unlawful if the use of force or the threat of appreciable harm is deemed inappropriate for 42 the purpose of achieving the desired outcome. 37

Gesetzes zur Bekämpfung der Zwangsheirat und zum besseren Schutz der Opfer von Zwangsheirat sowie zur Änderung weiterer aufenthalts- und asylrechtlicher Vorschriften, June 30, 2011, BGBL. I at 1266–70. The explanatory memorandum to the legislation by the German government explicitly refers to human rights relating to forced marriage and concludes that more than preventative measures are required to protect victims, see DEUTSCHER BUNDESTAG: DRUCKSACHE [BT] 17/4401, at 8. 38

STGB § 240(4)(2); see also Schubert and Mobius, supra note 1 (referring to the rule as an aggravation (Regelbeispiel)). 39

STGB § 237.

40

Brian Valerius, Gedanken zum Straftatbestand der Zwangsheirat (§ 237 StGB) [Thoughts on the Criminal Offence of Forced Marriage (§ 237 StGB)], JURISTISCHE RUNDSCHAU 430, 432 (2011); Eisele, supra note 8, at 1. 41

Valerius, supra note 40, at 431.

42

STGB § 237(1).

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Under Section 237(2), a person who, through violence or threat with harm, forces or lures another person to leave Germany in order to force this person to marry outside of Germany’s territorial jurisdiction or to prevent a person from returning to Germany, 43 commits a criminal offense. In Germany, forced marriages have been found to frequently occur in the following contexts. First, a forced marriage can be concluded between two persons living in Germany, usually from the same cultural background, where at least one spouse does not consent to the marriage. Second, one spouse from a different country, often the immigrant family’s home country, can be brought to Germany to enter into a marriage against the will of at least one of the parties. This form of forced marriage is often referred to as an “import marriage” and is associated with the possibility of obtaining a German visa for the spouse. Finally, a person normally living in Germany can be taken abroad, usually to the family’s home country, and be forced to marry there. This form of forced marriage is 44 commonly known as a “holiday marriage.” II. Problems and Shortfalls of the German Legislation The subsequent assessment mainly focuses on three shortcomings associated with the German legislation: First, the ambiguity of the term “marriage” as used in the provision; second, the limitations of the definition of “threat with an appreciable harm” in light of a “forced” marriage; and third, uncertainties as to who can be considered a perpetrator and an accessory. 1. “Marriage” German criminal law in Section 237 of the StGB nominates that a “marriage” must have been concluded between two parties. The question arises as to whether “marriage” means 45 46 a marriage according to German law, or recognized in Germany, or whether marriages not recognized in Germany, such as exclusively religious or traditional marriages, also fall within the scope of this section. The question seems particularly important as a 2011 study 43

STGB § 237(2).

44

Dagmar Kaiser, Zwangsheirat [Forced Marriage], FAMILIENRECHTSZEITUNG 77, 77 (2013); DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 16/1035, at 6. On the terminology, see also Bernd-Ruediger Sonnen, § 237, in STRAFGESETZBUCH at para. 1 (Kindhäuser et al. eds., 4th ed. 2013). 45

46

BÜRGERLICHES GESETZBUCH [BGB] [CIVIL CODE] § 1310.

EINFÜRHUNGSGESETZT ZUM BÜRGERLICHEN GESETZBUCHE [EGBGB] [INTRODUCTORY ACT TO THE GERMAN CIVIL CODE], arts. 11, 13. See Jens Bülte & Raymond Becker, Der Begriff der Ehe [The Term Marriage], ZEITCHRIFT FÜR INTERNATIONALE STRAFRECHTSDOGMATIK 61, 63 (2012).

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conducted by the Federal Ministry for Family, Senior Citizens, Women and Youth on forced marriage suggests that over thirty percent of forced marriages considered in the study 47 were exclusively religious marriages not recognized under German law. Some German commentators contend that to afford victims ample protection, any form of marriage must fall within the scope of Section 237, regardless of whether the marriage is 48 formally recognized in Germany. They assert that forced “marriages” that are not formally recognized in Germany but are highly valued in certain cultural groups and forced marriages that are recognized by German law are often conducted for the same reasons— namely to force daughters into traditional roles and to secure the position of the family 49 within the cultural group. For this reason, the scholars argue that as long as the marriage is widely morally acknowledged and recognized in the respective country of conclusion it 50 should fall within the scope of Section 237. Other scholars assert that Section 237 only criminalizes forced marriages that are either 51 concluded under German law or are formally recognized in Germany. Their view is supported by the fact that the terminology of the respective criminal law section and that 52 of German civil law on matrimonies is identical when referring to “marriage.” The similarity in wording suggests that the meaning of marriage is intended to have the same meaning in the two provisions—a marriage either formally conducted or recognized in Germany. Moreover, nothing suggests that German Parliament intended to include marriage-like relationships, not formally recognized as marriages in Germany, in the criminal statute. During consultations prior to the enactment of the legislation, the Deutscher Juristinnenbund (German Women Lawyers Association) specifically suggested broadening the scope of the section by including other marriage-like partnerships

47

Mirbach, Schaak, & Triebl, supra note 10, at 38.

48

Letzgus, supra note 2, at 455; Jörg Eisele & Christian Majer, Strafbarkeit der Zwangsheirat nach § 237 StGB im Lichte des Internationalen Straf-und Privatrechts [Criminal Responsibility According to § 237 StGB in Light of International Criminal and Private Law], NEUE STRAFRECHTSZEITUNG 546, 551 (2011). 49

Valerius, supra note 40, at 432.

50

Kaiser, supra note 44, at 86.

51

See Karl Lackner, § 237, in STGB, at para. 3 (Lackner & Kuehl eds., 28th ed. 2014); see also Kaiser, supra note 44, at 86; Volker Haas, Der neue Straftatbestand der Zwangsheirat (§ 237 StGB)—eine kriminalpolitische Bewertung [The New Criminal Law of Forced Marriage (§ 237 StGB)—A Criminal Political Assessment], JURISTEN ZEITUNG 72, 78 (2013); Wieck-Noodt, supra note 3, at 24. But see Valerius, supra note 39, at 432; Eisele & Majer, supra note 45, at 550. 52

BÜRGERLICHES GESETZBUCH [BGB] [CIVIL CODE], tit. 2 Eingehung der Ehe [Concluding marriage]. See also Valerius, supra note 40, at 432; Sonnen, supra note 44, at 21; Bülte & Becker, supra note 46, at 63.

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53

acknowledged abroad but not in Germany. This, however, was not explicitly included in the finalized norm, suggesting that the legislature had no intention of expanding criminal 54 responsibility to the act of forcing someone into a marriage-like partnership. Consequently, forcing someone into an exclusively religious or traditional marriage, such as so-called “Imam-marriages” or “Sinti-marriages,” arguably does not give rise to criminal 55 responsibility under German criminal law on forced marriage. Those who stress that these “marriages” do not fall within the scope of Section 237 contend that no protection gaps exist. Kaiser explains that a person forcing someone into a religious marriage may not be liable under Section 237 but could instead be criminally 56 responsible for coercion. This argument, however, serves to highlight the incongruity of the German law reform on forced marriage. It is incomprehensible why the law on forced marriage as a form of coercion would be repealed and a specific norm on the issue introduced, if around thirty percent of all reported forced marriages arguably do not fall within its scope due to their religious nature and recourse to coercion must be taken instead. The above discussion highlights that the definition of “marriage” in regards to Section 237 has been subject to debate in academic scholarship. Similarly, interpretation problems have arisen in the context of “forcing” someone to marry. 2. Forced Marriage and Consensual Marriage According to Section 237 of the StGB, a person must be coerced into marriage by force or by threat with an appreciable harm. Under German law, threat requires the perpetrator to allege that he or she has influence over the appreciable harm and the ability to evoke that 57 harm if the victim does not comply. It must first be said that distinguishing between criminalized forced marriage and a nonpunishable arranged marriage appears difficult in practice. In an arranged marriage, the bride and groom are able and allowed to reject the marriage partner in question and 53

Deutscher Juristinnenbund, Stellungnahme zum Gesetzentwurf der Bundesregierung zur Bekämpfung der Zwangsheirat und zum besseren Schutz der Opfer von Zwangsheirat sowie zur Änderung weiterer aufenthalts- und asylrechtlicher Vorschriften, BT-Drs. 17/4401 (Mar. 10, 2011), http://www.djb.de/Kom/K5/st11-02/ (last visited Nov. 10, 2014). 54

See Bülte & Becker, supra note 46, at 63.

55

See Sonnen, supra note 44, at para. 23; see also Wieck-Noodt, supra note 3, at para. 26 (contemplating whether forcing someone into a religious marriage could constitute an unsuccessful attempt of § 237). 56

Kaiser, supra note 44, at 86; see Bülte & Becker, supra note 46, at 66.

57

Wieck-Noodt, supra note 3, at para. 43.

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58

therefore do not marry against their will. The threat or force and thereby the absence of 59 the victim’s free will to marry characterizes a forced marriage. Whereas the differences between forced and arranged marriages may be clear in theory, the borders are less 60 transparent in practice. Ultimately, the differentiating criterion is solely the inner consent of bride and groom to marry. The degree of pressure and manipulation some young women experience from their relatives, as well as the financial and emotional dependency on their families, make it difficult to clearly assess whether a person consented to the 61 marriage, albeit due to external pressure, or was indeed forced. Furthermore, the definition of “threat” in light of Section 237 excludes certain methods of force, thus bringing into question the overall effectiveness of the legislation. As per Section 237, a perpetrator is criminally responsible if he or she either forces the victim to marry or threatens the victim into marriage. Force is defined not only as physical force and includes acts such as hitting, torturing, sexually violating, and constraining the victim, but also 62 arguably withholding the phone or laptop from the victim to prevent calls for help. “Threat” requires that the perpetrator allege that he or she has influence over the harm the victim is threatened with and make clear that he or she will evoke the harm if the 63 victim does not comply. This can include threats that the victim will be excluded from the family unit in case of non-compliance, as well as threats of gender-related honor 64 violence. Consequently, threatening or pressuring victims with something the perpetrator claims to have no control over does not amount to criminal conduct in Germany. Some research has identified that a “shotgun marriage,” meaning a marriage into which a victim is forced by threat of homicide in case of non-compliance, does not frequently occur 65 in practice. In Germany, Yerlikaya and Çakir-Ceylan made similar findings based on

58

IMMA, supra note 5, at 4.

59

Schubert & Moebius, supra note 1, at 34.

60

Göbel-Zimmermann & Born, supra note 8, at 54.

61

See IMMA, supra note 5, at 5; Eisele, supra note 8, at para. 6 (contemplating the difficulty of the assessment); Mirbach, Schaak, & Triebl, supra note 10, at 26. For critical scholarship on distinctions between forced and arranged marriages in the UK context, see Anitha & Gill, supra note 20. 62

Wieck-Noodt, supra note 3, at para. 43.

63

Id. at para. 47.

64

Id. at para. 48; Lackner, supra note 51, at para. 3.

65

In the U.S. context, see J. Fortheringham, expert in matrimonial law, cited in Julia Alanen, Shattering the Silence Surrounding Forced and Early Marriage in the United States, 32 CHILD LEGAL RTS. J. 1, 6 (2012).

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interviews with fifteen young women of Turkish descent affected by forced marriage. The researchers identified that girls and young women were recurrently coerced into marriage by subtle pressure. Yerlikaya and Çakir-Ceylan outline that victims were repetitively confronted with the marriage proposal and told that they would learn how to love the 67 person they were supposed to marry. In addition, it was pointed out to the women that 68 refusing to get married would dishonor the family. While in other jurisdictions, such as the United Kingdom, the definition of “force” includes coercing someone into marriage by psychological means, the building up of subtle psychological pressure does not amount to 69 threat or force under German law. Because the perpetrator does not allege to have any influence over the appreciable harm the young woman is threatened with, namely dishonoring the family in case of non-compliance, the subtle pressure merely creates an uncomfortable position for the affected person and does not amount to a threat in the legal sense. Thus, while girls and young women raised in patriarchal structures may react to such subtle pressure and marry against their own free will, this conduct is not 70 considered criminal under German law. Furthermore Yerlikaya and Çakir-Ceylan found that in some instances the patriarch merely authoritatively commands that the marriage will take place regardless of the girl’s wishes 71 without mentioning any threatening consequences in case of disobedience. The researchers argue that possibly due to the authoritarian way in which some children are raised in patriarchal family structures, girls and young women fail to oppose these orders 72 despite the fact that they do not wish to marry. Due to the lack of threat with an appreciable harm, however, this behavior also does not amount to threat in terms of 73 Section 237. 66

See generally Hayriye Yerlikaya & Esma Çakir-Ceylan, Zwangs-und Scheinehen im Fokus staatlicher Kontrolle; Eine Betrachtung des juengsten Gesetzesentwurfes zur Bekämpfung der Zwangsheirat unter Verhinderung von Scheinehen im Lichte des Opferschutzes [Forced Marriages and Marriages of Convenience in the Focus of State Control: Considering the Most Recent Draft Bill to Fight Forced Marriages and Prevention of Marriages of Convenience in Light of Victim Protection], ZEITSCHRIFT FÜR INTERNATIONALE STRAFRECHTSDOGMATIK 205 (2011), http://www.zis-online.com/dat/artikel/2011_4_546.pdf. 67

Id. at 207.

68

Id.

69

Kaiser, supra note 44, at 79; Eisele, supra note 8, at 9; Haas, supra note 51, at 76. On the definition of “force” in the UK context, see Forced Marriage (Civil Protection) Act 2007, c. 20, § 63A(6), pt. 4A. On emotional pressure and the “myth of free choice” in the UK context, see generally Anitha & Gill, supra note 20. 70

Yerlikaya & Çakir-Ceylan, supra note 66, at 208; Lackner, supra note 51, at para. 3; Eisele, supra note 8, at 9.

71

Yerlikaya & Çakir-Ceylan, supra note 66, at 208; Wieck-Noodt, supra note 3, at para. 50 (highlighting that the authoritative word of the patriarch does not necessarily constitute a threat with future harm). 72

Yerlikaya & Çakir-Ceylan, supra note 66, at 208.

73

Id.

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Consequently, the German legislation excludes two methods reportedly used to coerce victims into marriage: Relying on the honor of the family or not mentioning a specific threat to the victim. The criminal law, therefore, appears to fall short of adequately 74 addressing the phenomenon of forced marriage as it occurs in actuality. 3. Perpetrators and Accessories Distinguishing between principal perpetrators and accessories to forced marriage is a 75 challenging undertaking in practice, as forced marriages are reportedly initiated by a 76 number of actors within a family or clan. For example, it is difficult to substantiate to the legal standard whether a child’s mother, in threatening her daughter into a forced marriage, was acting upon the instructions of the child’s father or out of her own accord, and should thus be treated as a principal or accessory to the offense. The categorization of principal perpetrators, accessories, and non-actors in a criminal sense seems particularly challenging in patriarchal family structures with a potential power imbalance between 77 female and male family members. In that regard, it is uncertain whether a wife, by not stopping her husband from forcing his daughter to marry, possibly out of her own fear of repercussions and her gender-specific role in a patriarchal family setting, could be held criminally responsible for her omission. Due to the lack of available case law on forced marriage in Germany, it is unclear how courts would address any of the issues identified above. Thus, much uncertainty currently revolves around the criminal legislation on forced 78 marriage in Germany. While some of the identified protection gaps and uncertainties could be addressed through law reform, Part D ponders the underlying question of whether a repressive measure, such as legislation penalizing forced marriage, is well-suited to address the issue effectively and to afford victims sufficient protection. Put differently, the subsequent analysis will discuss whether the adoption of criminal legislation on forced marriage has the potential to positively impact the situation of affected persons.

74

See Valerius, supra note 40, at 433.

75

Christian Sering, Das neue ‘Zwangsheirat-Bekämpfungsgesetz’ [The New Law Against Forced Marriage], NEUE JURISTISCHE WOCHENSCHRIFT [NJW] 2161, 2163 (2011). 76

Yerlikaya & Çakir-Ceylan, supra note 66, at 208.

77

Sering, supra note 75, at 2163.

78

Wieck-Noodt, supra note 3, at para. 55 (agreeing that it will be difficult to identify the different actors in practice). No criminal verdicts on forced marriage are recorded in the Juris database as of July 2015.

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D. Legislation as an Effective Tool to Prevent Forced Marriages? Some advocates for the introduction of specific legislation on forced marriage have suggested that the introduction of a criminal norm is likely to deter offenders to a greater 79 extent, thus affording victims of forced marriage more protection. While there may be some truth in this argument, the following section outlines why specific legislation alone does not effectively improve the situation for victims. I. Reporting Criminal conduct can only be investigated and prosecuted if it is brought to the attention of law enforcement agencies. Reporting rates for forced marriage may increase with the greater visibility of the new legislation. Victims could become more aware of the 80 criminality and could feel more inclined to report the offense. Increasing reporting rates could be beneficial for effectively targeting this practice. In the years subsequent to the introduction of the criminal law in 2011, reporting rates have remained low. Only fifty-six cases of forced marriage were recorded in the 2012 crime 81 statistics, sixty-two cases in the 2013 statistics, and fifty-eight cases in the 2014 crime 82 statistics. It may be that the ongoing low reporting rates are related to the fact that the law has only been in force for a relatively short period and that more time is needed to demonstrate its effectiveness. Yet, it may also be that criminal law alone is ill-suited to deal with forced marriage, as it is not an exclusively legal issue, but also a complex cultural and social issue. The reasons behind the underreporting of forced marriage have not been subject to ample research in Germany. From the little that is known about victims’ reporting behavior, the following factors have been identified as significant: Göbel-Zimmermann and Born argue that some young women do not report attempts to force them into marriage, as they do 83 not wish to incriminate their own parents and families. Reporting the conduct could 79

DEUTSCHER BUNDESTAG: PLENARPROTOKOLL [BT] 17/84, at 9425.

80

Discussed in the UK context in Home Office, Forced Marriage—A Consultation—Summary of Responses 12 (June 2012), https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/157829/forcedmarriage-response.pdf. 81

Bundeskriminalamt [BKA] [Federal Criminal Police Office], Police Crime Statistics 2013, http://www.bka.de/DE/Publikationen/PolizeilicheKriminalstatistik/pks__node.html (last accessed Nov. 6, 2014). 82

Bundeskriminalamt [BKA] [Federal Criminal Police Office], Police Crime Statistics 2014, http://www.bka.de/DE/Publikationen/PolizeilicheKriminalstatistik/pks__node.html?__nnn=true (last accessed July 28, 2015). 83

Göbel-Zimmermann & Born, supra note 8, at 60.

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make them subject to repercussions in the family and, in the worst-case scenario, to violence and homicide. In any case, incriminating their parents would likely estrange 84 victims and their families, thus threatening victims’ cultural identities. Others are unwilling to incriminate their parents due to financial concerns and problems relating to adequate housing when they are forced to leave the family home after reporting their 85 parents to criminal justice authorities. The suggested reasons for underreporting in Germany, namely fear of repercussions within the family, lack of financial support, fear of being alone, and loss of cultural identity, have not been adequately resolved by the introduction of the new criminal legislation on forced marriage. It is therefore unrealistic to expect that the underreporting will automatically end with the introduction of a new statute that “clarifies” the legislation and enables young women to say that forced marriages are “criminalized in their own right and thus 86 illegal.” As long as social, cultural, and economic issues prevail, girls and young women will likely abstain from reporting this offense to relevant authorities. While victims may not only continue to refrain from reporting, the introduction of criminal law on the issue may even lead some girls and young women to abstain from seeking the 87 help of victim support services due to fear of criminal repercussions for their relatives. This could potentially remove the problem of forced marriage from the public sphere and 88 turn it into an underground issue, eventually isolating victims further and aggravating their situation. While the introduction of the criminal legislation may not have any significant influence on increasing the currently very low reporting rates, it may also have no deterring effect on perpetrators for reasons explained below. II. Procedural Problems and Deterring Perpetrators Where cases of forced marriage are reported and enter the criminal justice system, perpetrators can only be convicted if the offense is established to the standard required by law. In German criminal cases, the judge must be fully persuaded that an alleged fact is 89 true (Volle richterliche Überzeugung). In a case of forced marriage, the judge would have 84

Kaiser, supra note 44, at 89.

85

Schubert & Moebius, supra note 1, at 33.

86

DEUTSCHER BUNDESTAG: PLENARPROTOKOLL [BT] 17/84, at 9425 (comment by Monika Lazar).

87

See Yerlikaya and Çakir-Ceylan, supra note 66, at 213.

88

Home Office, supra note 80, at 9 (discussing the issue in the UK context).

89

JULIANE KOKOTT, THE BURDEN OF PROOF IN COMPARATIVE AND INTERNATIONAL HUMAN RIGHTS LAW 203 (1998).

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to be persuaded that the victim was threatened with appreciable harm or force and thus did not consent to marriage. Proving these issues to the required standard, however, appears fraught with evidentiary and procedural problems. In a case of forced marriage, most victims, defendants, and potential witnesses are relatives. While in Germany the accused has the right to remain silent or even to lie in court, witnesses generally have to testify the truth. Witnesses, including victims, who are close family relations to the accused, are afforded the right not 90 to testify. Where the accused remains silent or lies about the voluntariness of the marriage or the motives behind bringing the victim abroad, and where key witnesses or the victim herself refuse to testify, it will be very difficult to prove the alleged elements to 91 the required standard. It can be imagined that due to potential power imbalances in 92 patriarchal families, many female family members may not testify in court. Particular problems exist in proving the intent to bring someone abroad and forcing them to marry there. It has been found in the British context that numerous trips occur under the premise 93 of taking a family holiday, and victims are unaware of the planned wedding. This makes it especially difficult to produce any evidence of the defendant’s intent to force a girl into marriage abroad when leaving Germany. Consequently, the accused would be acquitted at trial. In case of an acquittal, victims may remain traumatized by their court experience while possibly also having to face severe repercussions from family members, including the 94 defendant. All of this places victims in an extremely vulnerable position. That the introduction of legislation relating to forced marriage and coercion in 2005 and the new legislation in 2011 has not increased the number of convictions of forced marriage is evidenced by the fact that, since the introduction of the legislation, no relevant verdicts dealing with the criminal offense in question have been published by German criminal 95 courts. A deterring effect in legislation has been linked to, inter alia, a high risk for 96 perpetrators of being incriminated and convicted for the criminal conduct. Yet, the low

90

STRAFPROZESSORDNUNG [STPO] [CODE OF CRIMINAL PROCEDURE] §§ 52, 55.

91

See R. Kalthegener, Strafrechtliche Ahndung der Zwangsverheiratung: Rechtslage-PraxiserfahrungReformdiskussion [Criminalization of Forced Marriage, Law, Practice, Reform Discussion], in ZWANGSVERHEIRATUNG IN DEUTSCHLAND, FORSCHUNGSREIHE 221 (Bundesministerium für Familie, Senioren, Frauen und Jugend eds., 2007); Wieck-Noodt, supra note 3, at 78. 92

In relation to the likelihood of victims not testifying out of fear, see Letzgus, supra note 2, at 456.

93

Home Office, supra note 80, at 12.

94

Letzgus, supra note 2, at 456.

95

No criminal court verdicts are recorded in the Juris database as of June 2015.

96

Haas, supra note 51, at 76.

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reporting and even lower conviction rates for forced marriage and, relatedly, the overall marginal risk for perpetrators render a deterring effect of the legislation unlikely. While some commentators have pointed towards the deterring effect as justification for the criminal legislation, others contend that the benefits of the legislation are not associated with deterrence in the traditional sense. Rather, they argue the benefits of the legislation stem mainly from its symbolic value and the message it aims to send. III. Symbolic Value and Stigmatization of Minorities According to the German Government, the reason behind the introduction of the specific provision concerning forced marriage, in comparison to only criminalizing forced marriage as a form of coercion, was to raise “the awareness of the general public for injustice of 97 forced marriages.” Furthermore, the Government wanted to send out the clear “signal” that forced marriages are not a “tolerable tradition from past times and different 98 cultures.” It is unclear, however, whether the symbolic message the legislation aims to 99 send will reach perpetrators and change their attitudes towards the practice. Nothing suggests that the creation of a new criminal offense by itself is sufficient to reach actors in certain cultural communities in which forced marriages have occurred for 100 centuries. Haas asserts that perpetrators often stem from cultural groups in which a patriarchal understanding of family and marriage prevails and whose conduct is dominated 101 by an honor code. In the British context, Gill and Engeland have explained that many ethnic minority communities in Britain originate from clan- or tribe-like structures where the loyalty to the clan takes “precedence” over the individual clan members and their 102 individual relationships. Because many perpetrators with such backgrounds may reject individualist values and the freedom to choose a marital partner, it appears unlikely that 103 the message behind the legislation will reach these perpetrators and change their views. Based on the above considerations, it seems doubtful that the symbolic message will have a significant effect in practice.

97

DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 17/4401, at 1.

98

Id. at 9.

99

See Yerlikaya & Çakir-Ceylan, supra note 66, at 213.

100

Valerius, supra note 40, at 431.

101

Haas, supra note 51, at 76.

102

Gill & Van Engeland, supra note 21, at 246; see Wieck-Noodt, supra note 3, at 4 (concurring that forced marriage in Germany is mostly based on tribal customs and patriarchal family structure). 103

Haas, supra note 51, at 76.

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That the adoption of criminal legislation on forced marriage may not have any significant impact on the actual situation for victims, but rather may be more symbolic in nature, had already been identified in parliamentary debates prior to the enactment of the legislation. During discussions, politicians frequently expressed the view that the planned legislation would likely not deter perpetrators. They argued, however, that adopting legislation would 104 also not make the situation worse and should thus be undertaken. This shows that the adoption of criminal law on forced marriage was possibly more symbolic than an attempt 105 to adopt practically effective measures. The view that introducing said legislation “can’t hurt” and might have a symbolic meaning ultimately overlooks the risks associated with the adoption. Criminalizing forced marriage harbors the danger that affected groups or communities could perceive the legislation as the undesired involvement of cultural outsiders. This might cause a blanket rejection by respective communities to consider the issue of forced marriages further, thus not improving the situation for victims in practice. Furthermore, the legislation may stigmatize certain cultural groups, as mostly minorities with migrant backgrounds are affected by the practice. German political associations with right-wing tendencies could exploit this by discriminating against immigrant minorities in Germany on that basis. For this reason, similar legislative developments in the UK have been criticized 106 as creating “Ghetto” legislation. Additionally, the introduction of merely symbolic criminal law overlooks that the object of criminal law is the protection of society and not the creation of symbolism. Utilizing criminal law for the purpose of expressing a general political attitude towards a certain matter holds the risks of devaluing the whole system of criminal law and procedure in a 107 democratic state like Germany. The reasons outlined above raise doubt as to whether the criminal law statute is sufficient to holistically protect victims of forced marriage. Part E contemplates what additional measures could contribute to improving the actual situation for victims.

104

See Letzgus, supra note 2, at 453.

105

Schubert & Moebius, supra note 1, at 35.

106

See Amrit Wilson, The Forced Marriage Debate and the British State, 25 RACE & CLASS 25, 36 (2007); Quek, supra note 22, at 636–37 (discussing statements by proponents of the criminalization of forced marriage in the UK); see also Home Office, supra note 80, at 14 (discussing responses to criminalization of forced marriage in the UK and the perception that cultural outsiders do not understand the culture and criticism on their involvement). 107

See Yerlikaya and Çakir-Ceylan, supra note 66, at 213.

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E. Additional Measures to Address Forced Marriage I. Further Research on Forced Marriage The necessity to introduce a criminal norm on forced marriage to better combat the practice suggests that forced marriages are widespread in Germany. Surprisingly, it remains uncertain how widespread the phenomenon of forced marriage in Germany actually is and whether the numbers of forced marriages have been increasing, decreasing, or stagnating over the years. No undisputed empirical data exists on this issue and no conclusive research in the area of unreported cases, so called “dark figures,” has been conducted. It is noteworthy that Section 240(4)(2) of the StGB governing forced marriage as a form of coercion between 2005 and 2011 was repealed without assessment 108 of its effectiveness. The new legislation on forced marriage was introduced in 2011 without sufficient empirical research on the issue. Instead, previous legislative initiatives 109 on forced marriage relied on data estimated by individual victim support organizations. Undertaking additional research on affected persons is critical. It may be argued that the number of forced marriages occurring each year is irrelevant because even if the practice 110 were sporadic it would be intolerable. While this is true, without empirical evidence the number of victims in Germany remains only speculative. To improve the situation for victims more holistically, further research is needed on the responses and needs of victims of forced marriages, as well as the motives behind this practice. These research findings could broaden the current understanding of the psychological, emotional, and economic situation of victims and could aid in the introduction of specifically tailored support services, policies, and procedures in line with identified needs. As pointed out, subtle psychological pressure does not fall within the definition of “force,” despite subsequent research suggesting that this method is used in practice to force victims into marriage. This demonstrates that a better understanding and conceptualization of force and threat in relation to forced marriage is important to avoid 111 introducing legislation removed from the actual practice.

108

Sonnen, supra note 44, at para. 5.

109

DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 16/1035, at 6.

110

Clark & Richards, supra note 20, at 503 (citing Mission d’information sur la famille et les droits des enfants for the argument that the practice is intolerable). 111

DEUTSCHER BUNDESTAG: DRUCKSACHEN [BT] 17/2491, request 7. The Green party requested a Parliamentary inquiry into the effectiveness on the criminal law of coercion governing forced marriage. This request was unsuccessful.

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Greater knowledge of the motives behind forced marriage could also improve the overall understanding of the phenomenon and allow intercultural dialogue with communities. For example, identifying the specific reasons as to why girls and young women are forced into marriage, currently associated with the traditional understanding of marriage, the family’s 112 standing within the community, visa rights, and economic reasons, would allow for specifically tailored campaigns against forced marriage. Identified issues could be more precisely targeted, enhancing the practical relevance of campaigns. II. Dialogic Approach with Communities Initiating and furthering intercultural dialogue could contribute to effectively targeting the practice of forced marriage within communities. In light of the analysis in this article, it seems possible that a continuing dialogic approach and community engagement could help raise awareness of forced marriage as a human rights violation and as an unacceptable 113 practice to a greater extent than the creation of a criminal norm. While intercultural dialogue is not without risks, as it could empower self-announced spokespersons within 114 certain groups and strengthen power hierarchies in communities, care should be taken to avoid these risks. Ultimately, only changed social and cultural attitudes and practices are likely to fully and effectively protect girls and young women from forced marriage. While additional research and dialogue on the issue seems important to better protect victims, the situation cannot be holistically addressed without the introduction or advancement of specifically tailored support services as preventative measures. III. Strengthening and Interlinking Support Services for Victims of Forced Marriages and Government Involvement In response to the report “Strengthening Efforts to Prevent and Eliminate Child, Early and Forced Marriage” prepared by the UN High Commissioner for Human Rights, Germany outlined measures implemented to combat forced marriage on the German federal level in 115 December 2013. Mainly three “prevention and intervening” measures were described in the response. First, an online counseling service project on forced marriage was created, 112

See Eisele, supra note 8, at 3; Eisele & Majer, supra note 48, at 547; Haas, supra note 51, at 74–75.

113

See Valerius, supra note 40, at 431.

114

See Fauzia Shariff, Towards a Transformative Paradigm in the UK Response to Forced Marriage: Excavating Community Engagement and Subjectivising Agency, 21 SOC. & LEGAL STUD. 549, 549 (2012). 115

Response of the Federal Republic of Germany in preparation of UN High Commissioner for Human Rights’ report Strengthening Efforts to Prevent and Eliminate Child, Early and Forced Marriage in Light of UN Human Rights Council Resolution A/HRC/24/23, http://www.ohchr.org/Documents/Issues/Women/WRGS/ForcedMarriage/Germany.pdf (Dec. 13, 2013) (last visited Nov. 7, 2014).

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but support was withdrawn in 2010. Second, the operation of a federal telephone hotline for women affected by domestic violence was founded. This hotline, so Germany’s response suggested, could also be utilized by victims of forced marriage. Lastly, a thirtytwo-page brochure titled “The Right to Freely Choose One’s Partner” was published and 116 offered online to prepare teachers for discourse on the matter. According to Germany’s response, only two measures classified as efforts to prevent forced marriage currently exist on the German federal level: The telephone hotline open to all female victims of violence and the brochure that can be downloaded from the Federal Government website. The overall effectiveness of these two measures in addressing forced marriage has not been researched and appears limited. Possibly realizing the limitations, Germany’s response points out that the introduction of support services for victims of forced marriage is foremost the responsibility of German states and the municipalities, not 117 of the Federal Government. Whether and to what extent such support services for victims of forced marriages are being offered in German states, however, is not included in the response to the UN High Commissioner for Human Rights. Few German states appear to have issued specific reports on the support situation for victims of forced marriage in their jurisdiction, making it difficult to assess the available 118 services in Germany as a whole. In a 2012 report on the support available for victims of forced marriage in Munich, Bavaria, one of Germany’s biggest cities, it has been found that singular institutions, government entities, and individuals in Munich have been confronted more or less frequently with issues relating to forced marriage and the support of victims 119 and persons at risk. The support offered for victims of forced marriage in Munich, the report suggests, occurs in isolation, and the different agencies and actors are generally not 120 interconnected. One issue reportedly raised by support workers was the lack of information available on the topic and the need to receive more ample training in this 121 particular area. A lack of training for support staff risks that potential victims of forced marriage are not supported appropriately, potentially increasing the risk of victimization.

116

The brochure can be downloaded on the German Federal Government http://www.bundesregierung.de/Content/DE/Publikation/IB/leitfaden-fuer-schulen-zum-umgang-mitzwangsverheiratungen.pdf (last visited Nov. 6, 2014). 117

website,

Response of the Federal Republic of Germany, supra note 115, at 2.

118

Schwarz, supra note 12, at 2 (suggesting that a support service structure is missing particularly in rural areas in Germany). 119

IMMA, supra note 5, at 14.

120

See id.

121

See id. at 15.

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The report on Munich may be indicative of the situation in other German cities and states. To improve the support system for victims across Germany in the future, it could be beneficial to interconnect and further strengthen support services. The interlinking could not only occur between different entities in the individual German states, but also between different entities across the whole of Germany. This may offer more holistic assistance for victims, and more adequate training and information opportunities for support workers. In the Munich study, support workers suggested that a central body should be established, responsible for consulting on forced marriages, interconnecting different agencies, and 122 coordinating seminars on the issue for staff training purposes. The feasibility of establishing interlinked support services for victims of forced marriages in Germany and putting into place a central coordinating body, possibly also on the German federal level, should be explored further. Examples of central bodies concerned with forced marriage can be found in other European jurisdictions. In England, for example, the Forced Marriage Unit, a government agency, was established in 2005 with the aim to lead and coordinate 123 the British Government’s work and policy on forced marriage. While the Unit provides support and advice on the issue of forced marriage to nationals within its jurisdictions, it is also tasked with providing assistance to British nationals overseas. Furthermore, the Unit runs and provides training courses on an annual basis aimed at both professional support workers and potential victims of forced marriage. The Unit initiates media campaigns 124 against forced marriage and compiles statistics on the issue. The introduction of a similar government body in Germany may enhance the support structure for victims of forced marriage throughout Germany and could assist in advancing research on this matter. IV. Cost Implications Conducting further research, expanding support structures for victims, and establishing a leading government entity on forced marriage does not come without cost implications. It is inevitable that effective protection of victims of forced marriage requires making sufficient funding available. In comparison, the possibly more symbolic legislation explicitly criminalizing forced marriage may currently not be very cost intensive as few prosecutions, if any, occur. The effectiveness of the legislation by itself appears limited. A holistic protection of victims from human rights violations justifies making funding in this area available.

122

See id.

123

More information on the work of the Forced Marriage Unit, available at www.gov.uk/forced-marriage (last accessed Nov. 6 2014). The Unit was first launched in 2000 under the title Community Liaison Unit. See Shariff, supra note 114, at 552. 124

Id.

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F. Conclusion After decades of silence, Germany has recently placed the issue of combatting forced marriage on the political agenda. While ending the silence on forced marriage is a positive development, the German criminal legislation governing forced marriage contains a number of uncertainties and shortfalls. Overall, the effectiveness of the enacted legislation remains unclear. Legislation criminalizing forced marriage alone, as a repressive measure, does not seem likely to afford victims of forced marriage ample protection in actuality. This may be because forced marriage is not an exclusively legal, but also a complex cultural and social issue that must be addressed from multiple angles. Accordingly, additional wellresearched and specifically tailored support measures and structures for victims of forced marriage, as well as intercultural dialogue with communities, are required to address the situation more holistically. While Germany may have taken a first step towards ending the silence on forced marriage by introducing criminal laws on the matter, it should take further steps to comprehensively improve the protection of girls and women affected by this practice.

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Developments Trial and Error—A Critique of the New German Draft Code for a Genuine Corporate Criminal Liability By Markus Rübenstahl* & Christian Brauns**

Abstract The following article aims to analyze the first German draft bill concerning a corporate criminal code. The draft bill, recently introduced by the federal state of NordrheinWestfalen, led to a transformation of a theoretical academic discussion towards a specific proposal on potential future legislation. Firstly, the article introduces underlying reasons for the draft based on deficiencies of the current legislation. Current regulations solely provide corporate administrative responsibility for criminal offenses committed by a corporation´s management (involving huge fines). Subsequently, the article reviews the content of the draft, specifically the multiplicity of proposed criminal and other penalties. The authors intend to demonstrate that the draft is often too vague or—especially with regard to penalties—simply over the top. The applicable sanctions – which may be combined- would lead to a more draconic punishment than in any other comparable legal system. Furthermore, regarding the principles of due process and strict legality the proposed procedural rules of the draft are not satisfying. After all, the proposed procedural measures to safeguard the proceedings and the rules on representation and defense counsel are deficient.

*

Dr. Markus Rübenstahl is attorney at law in Cologne (Germany) specialized in Corporate Defense and White Collar crime. He is an associate lecturer with the Albert-Ludwigs-University in Freiburg and the European Business School (EBS) Law School in Wiesbaden. **

Christian Brauns is post-graduate legal trainee at the Higher Regional Court Karlsruhe.

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A. Introduction In 2013, Thomas Kutschaty, Minister of Justice of the federal state of Nordrhein-Westfalen (NRW), announced that the federal state of Nordrhein-Westfalen intends to introduce a Draft on a federal Corporate Criminal Code titled “Gesetzesentwurf eines 1 Verbandsstrafgesetzbuchs” (VerbStGB-E) to the Bundesrat (Federal Assembly). The Conference of the Ministers of Justice welcomed the draft. The draft was especially seen as 2 a sound basis for consultations on the introduction of a specific corporate criminal code. Regarding similar intentions within the coalition agreement of the governing parties on the federal level—the “Christlich Demokratische Union/Christlich Soziale Union” and the “Sozialdemokratische Partei Deutschlands” (CDU/CSU and SPD)—this draft bill seems to have a realistic chance of at least partial implementation. Thus, the issue of lacking necessity of a German corporate criminal law is discussed in politics, praxis, and academia, 3 and negated by most. Although there is a number of legitimate reasons for introducing a corporate criminal liability code, the implementation of the VerbStGB-E in the current version triggers more negative than positive effects: Particularly the intended corporate criminal sanctions seem unnecessarily draconic. Additionally, the procedural provisions of 4 the draft do not withstand a critical analysis. B. Reasons for the Draft The government of NRW assumes that economic, environmental, and corruptive crimes committed out of an enterprise are a menace to economic and social structure; more than fifty percent of the yearly total loss identified by the police crime statistics consistently

1

See GESETZESENTWURF EINES VERBANDSSTRAFGESETZBUCHS [VERBSTGB-E] [CORPORATE CRIMINAL CODE], presented in 2013, BUNDSRAT DRUCKSACHEN [BR] 1/13 (Ger.), https://dicoev.de/fileadmin/PDF/PDF_Intranet_2013/Unternehmensstrafrecht/2013-1015_Entwurf_zum_Unternehmensstrafrecht.pdf [hereinafter VERBSTGB-E]. 2

Löffelmann, Der Entwurf eines Gesetzes zur Einführung der strafrechtlichen Verantwortlichkeit von Unternehmen und sonstigen Verbänden, JR 2014, 185 (186), available at http://www.nrw.de/landesregierung/justizministerkonferenz-begruesst-die-gesetzesinitiative-von-nrw-zumunternehmensstrafrecht-15084/. 3

Rübenstahl & Tsambikakis, Neues Unternehmensstrafrecht: Der NRW-Gesetzentwurf zur Einführung der strafrechtlichen, 7/2014 ZWH (2014) 8; Kirsch, Völkerstrafrechtliche Risiken unternehmerischer Tätigkeit, 6/2014, NZWIST 212 (2014); Kindler, Unternehmensstrafrecht und individuelle sanktionsrechtliche Haftungsrisiken, 4/2014 (2014), 134. In detail about dogmatic concerns, see Hoven, Der nordrhein-westfälische Entwurf eines Verbandsstrafgesetzbuchs – Eine kritische Betrachtung von Begründungsmodell und Voraussetzungen der Straftatbestände, ZIS 19 (2014), http://www.zis-online.com/dat/artikel/2014_1_790.pdf. 4

See Markus Rübenstahl, Contra: Deutschland braucht kein (solches) Unternehmensstrafrecht, 1/14 ZRFC 26 (2014), available at http://www.compliancedigital.de/ce/contra-deutschland-braucht-kein-solchesunternehmensstrafrecht/detail.html.

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5

originate from economic crime. Kutschaty is convinced that the current criminal law regulations and administrative fines are not sufficient to address crimes committed by corporations, therefore – from his point of view - a new sanction system concerning legal 6 entities has to be established. Kutschaty´s point of view is mainly opposed, since the instrument of administrative fines for corporations in accordance with Sections 30, 17, 130 OWiG—which were recently considerably increased—can be seen as an established “de 7 facto corporate criminal law.” Even simple negligence regarding the breach of supervisory 8 duties by board members and executive employees in accordance with Section 130 OWiG suffices to impose a fine on a corporation in accordance with Section 30 (1)–(3) OWiG. Therefore, the scope of administrative fines for corporations in Germany is notably 9 broader than comparable potential sanctions against associations in other jurisdictions. Nevertheless, Kutschaty’s view is based on a NRW survey showing that only nine of nineteen prosecutor’s offices processed in total twenty six cases during 2006 and 2011 that led to administrative fines on corporations. Despite the considerable amount of economic crimes, the remaining ten prosecutor’s offices did not process a single case of 10 imposing an administrative fine on a corporation. According to Kutschaty, the discretionary decision is a focal point since it is used in very different ways by the 11 prosecutarial officials. Although a general guideline determines that the possible imposition of an administrative fine has to be considered, if the offender is an executive 12 employee of an enterprise, Kutschaty doubts – based on recent experience - that a guideline ensures coherent application of Section 30 OWiG. The crucial issue is the opportunity principle on which Section 30 OWiG is premised. Regarding the increase of prosecuted cases in Austria after a mandatory prosecution has been implemented he 13 prefers the principle of legality in this context.

5

VERBSTGB-E at 1.

6

Kutschaty, Deutschland braucht ein Unternehmensstrafrecht, 3/2013 ZRP 74, 75 (2013).

7

Rübenstahl, supra note 4, at 26; Haubner, Der Gesetzentwurf Nordrhein-Westfalens zur Einführung eines Unternehmensstrafrechts, 24/2014 DB 1358 (2014). 8

Even the negligent constitution of a mere administrative offense also by omission shall be sufficient.

9

See Rübenstahl, supra note 4, at 26.

10

See Kutschaty, supra note 6, at 75.

11

See id.

12

Richtlinien für das Strafverfahren und das Bußgeldverfahren [RISTBV] [Rules of Action for Criminal Proceedings], Sept. 2014, No. 180a (4) (Ger.) available at http://www.verwaltungsvorschriften-iminternet.de/bsvwvbund_01011977_420821R5902002.htm. 13

See Kutschaty, supra note 6, at 75.

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Nevertheless, the federal states are entitled to develop stricter guidelines by listing particular cases or using “should” to reduce the discretion and work toward imposing an 14 administrative fine on corporations in a higher number of cases. Furthermore, prosecutors of specialized economic crimes departments could be trained on applying Sections 130, 30, and 17 OWiG in a more comprehensive and knowledgeable way. In addition, increased financial and human resources could be allocated to these offices. The deplorable lack of resources of the German criminal justice system has to be tackled either way, no matter if the principle of legality for Corporate Criminal responsibility is implemented by the draft or if the guidelines for the application of Section 30 OWiG are formulated in a stricter way, forcing prosecutors to impose administrative fines on corporations in all suitable cases. The draft argues that single subordinated employees are used as pawn sacrifices, while the “organization's responsibility” according to the draft would not have only virtual 15 consequences. Nonetheless, the statement is not supported by a set of reliable data. Nevertheless, according to the draft, the company itself deserves the expression of 16 society's condemnation in terms of criminal punishment. Administrative fines could not lead to the necessary preventive effect since the asset recovery (can be calculated and a 17 lack of an ethical complaint. In contrast to the German criminal law based on the 18 principle of individual guilt, the draft attributes the criminal responsibility of executive 19 employees´ crimes to the corporation itself and deems that to be constitutional. Even though this point of view is based on previous case law of the 20 Bundesverfassungsgericht (Federal Constitutional Court), which was not related to a criminal case, it is highly doubtable whether such an attribution is constitutional. The addition of designated corporate sanctions effectively punishes innocent third parties such as shareholders or legal successors with no influence on the management, as well as 21 employees and vendors. Thus collective punishment, which is incompatible with the 14

See Rübenstahl, supra note 4, at 27.

15

See Rübenstahl, supra note 4, at 26, 27.

16

VERBSTGB-E at 2.

17

See Rübenstahl & Tsambikakis, supra note 3, at 8–9.

18

Constitutional requirement in accordance with Arts. 1 & 20 III. See GRUNDESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GRUNDEGESETZ] [GG] [BASIC LAW], May 23, 1949, BGBl. I, arts. 1, 20 III. 19

VERBSTGB-E at 29.

20

Bundesverfassungsgericht, [BVERFGE] [Federal Constitutional Court], Oct. 25, 1996, Case No. II BvR 506/34 paras. 20, 323, 336. 21

VERBSTGB-E § 4 at 9.

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principle of liability, would be established. In regard of the constitutional principle of 23 proportionality, it is elusive why practical experiences of the new scope of fines—which 24 have increased tenfold since 30 June 2013 —are not addressed by the draft, even though the draft thusly postulates the need for draconic criminal sanctions to achieve the 25 deterrent effect without any empirical foundation. 26

The current lack of explicit incentives in German statute law for Compliance Measures does not necessarily justify the establishment of a corporate criminal law. The legislator should rather incorporate a regulation into Section 30 OWiG that reduces a fine mandatorily in case that preventive or repressive Compliance Measures of a certain intensity or quality are taken. Exceptionally, the Compliance Measures could lead the prosecution to refrain from imposing criminal penalties—comparable to the leniency program in accordance with Section 46b StGB or a non-prosecution agreements under USlaw. In addition, the additionally applicable forfeiture of illegal profits under sections 73 seq. StGB should be combined with a hardship clause comparable to Section 73c sentence 27 1 StGB to avoid bankruptcy or other financial crises. Nonetheless, NRW proposes a draft regulating the corporation’s liability in a self-contained legal set both regarding substantive and procedural law. In consideration of methodic approach and indemnity due to Compliance Measures it is similar to the Italian corporate 28 criminal law. Furthermore, the draft is also similar to the US corporate criminal law 29 regarding the provisions on deferred prosecution agreements and compliance monitors.

22

See Rübenstahl, supra note 4, at 26–27.

23

In accordance with Art. 20 III GG.

24

See BUNDESGESETZBLATT, TEIL I [BGBL. I] at 1738; Witte & Wagner, Die Gesetzesinitiative Nordrhein-Westfalens zur Einführung eines Unternehmensstrafrechts, 12/2014 BB 643 (2014). 25

See Rübenstahl, supra note 4, at 26.

26

VERBSTGB-E at 2 (containing further references).

27

See Rübenstahl, supra note 4, at 26, 28.

28

D.Lgs. 231/2001; see Rübenstahl, Strafrechtliche Unternehmenshaftung in Italian, 8/2012 RIW 505, 508 (2012).

29

See Rübenstahl & Skoupil, Anforderungen der US-Behörden an Compliance-Programme nach dem FCPA und deren Auswirkung auf die Strafverfolgung von Unternehmen, 6/2013 209 (2013).

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C. (The Draft’s) Content I. Personal and Material Scope of Application 30

The draft addresses “associations,” hence every privately held company or plurality of business associates, but not individual businessmen. Additionally, corporate bodies under public law as well as companies owned by public authorities as well as the Federal Republic of Germany, the Federal States and the municipalities are associations in this context. Compared to international standards the punishment of public associations would be 31 extremely far reaching . The draft solely exclude exercises of governmental authority— 32 for example, the whole public service, all public procurements, political parties, etc. It is doubtable that this huge scope of the law was intended: The monetary penalty would possibly directly or indirectly burden the public budgets on the one hand and be in favor 33 of the same on the other hand. Furthermore, the inclusion of non-profit- entities is questionable: most of those (small) entities are not capable of establishing or enhancing compliance organizations. If they were going to use financial means in this matter, they 34 would risk a breach of earmarked funds, which might even be punishable. 35

The company’s liability begins with “infringements,” for example an illegal but not 36 necessarily criminal offense besides exercises of governmental authority. Taking into account the academic debate on the infringement’s subjective component (mens rea), the law should clarify explicitly whether intentional offenses—for example, fraud, Section 263 37 StGB (German Criminal Code)—must be committed intentionally. The infringements are due to the draft “related to the association”, if the association’s legal duties are breached

30

VERBSTGB-E § 1 at 7–8.

31

See Rübenstahl, supra note 4; Rübenstahl, supra note 28; Rübenstahl, Der Foreign Corrupt Practices Act (FCPA) der USA Part 1, 11/2012, NZWIST 2012; see also Rübenstahl, Der Foreign Corrupt Practices Act (FCPA) der USA Part 2, 1/2013, NZWIST 2013, 13. 32

Witte & Wagner, supra note 24, at 643–44.

33

See Rübenstahl, supra note 4, at 26, 28.

34

In particular, see ABGABENORDNUNG [AO] [FISCAL CODE], Oct. 1, 2002, BUNDESGESETZBLATT, TEIL I. [BGBL. I] §§ 51, 61– 63; STRAFGESETZBUCH [STGB] [PENAL CODE] § 266. 35

See ORDNUNGSWIDRIGKEITSGESETZ [OWIG] [Administrative Offenses Act], Feb. 19, 1987, [JURIS GMBH] § 130.

36

Witte & Wagner, supra note 24, at 643–44; VERBSTGB-E § 1.

37

Hoven, Wimmer, Schwarz, & Schumann, Der nordrhein-westfälische Entwurf eines Verbandsstrafegesetzes – Kritische Anmerkungen aus Wissenschaft un Praxis Teil 1, 5/2014 NZWIST 161, 163 (2014).

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by an illegal act, or if the association is enriched by the illegal act (according to the plan of 39 the person who commits the illegal act). “Decision makers” are authorized bodies or 40 members of such bodies of legal entities, members of the executive board of societies without legal capacity, authorized shareholders of joint partnerships with legal capacity, and persons taking a leadership position including the supervision of management and the 41 exercise of monitoring powers in an executive position. Unfortunately, the monitoring power does not exclude Compliance-Officers, CCOs or Heads of Legal Departments or Audits, and even environmental managers are not excluded from the scope of the draft. The expansion of the liability-causing circle of persons is disproportionate because of the 42 lack of influence on the management of some of the above named roles. “Legal successor” means universal successor or partial universal successor in accordance with 43 Section 123 UmwG. In contrast to the application of Section 30 OWiG, due to the draft prosecutors would have no discretionary power with regard to the application of the corporate criminal responsibility. Even the decision maker’s offense needs not be punishable for corporate criminal responsibility. Regarding the principle of liability, there must be at least one decision maker to whom the company can attribute the guilt or liability. Nonetheless the draft is not requiring individual liability as condition comparable to Sections 17, 20 f. StGB. Furthermore, an inadequate personal selection or insufficient designed task fields on the 44 executive level should justify a criminal accusation. It is unclear how the dispensation of 45 personal liability shall attribute a criminal guilt of the company. In accordance with 46 Section 2 (2) VerbStGB-E a company’s sanction is imposed as soon as a decision maker— 47 intentionally or negligently —fails to set a Compliance Management System in technical,

38

Correctly criticizing the fact, that offenses against the association—for example, embezzlement—shall be “related to the association” in that sense. Hoven, Wimmer, Schwarz, & Schumann, supra note 38, at 161, 163– 164. 39

VERBSTGB-E § 1(2) at 7.

40

VERBSTGB-E § 1(3)(d) at 8.

41

VERBSTGB-E § 1(3); see OWIG § 30 I.

42

Rübenstahl, supra note 4, at 26, 28.

43

VERBSTGB-E § 1(4) at 8; see OWIG § 30(2)(a).

44

VERBSTGB-E at 45.

45

See Rübenstahl, supra note 4, at 26, 29.

46

In the style of OWIG § 130.

47

The draft and its explanation do not explain whether negligently infringement shall be attributable when only intentional infringement is punishable for the individual. See VERBSTGB-E at 46.

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organizational or personal terms to avoid the infringement or at least mitigate the infringement. The gap quoted by the draft in criminal liability resulting in “organized 48 irresponsibility” is not empirically proven (see above). It is also rather counter-intuitive to the principle of liability that corporate criminal responsibility should not require the causality for the attribution of monitoring violation according to the draft but a simple 49 increase of risk. II. Criminal Penalties and Other Sanctions In Section 4 VerbStGB-E the draft contains a definitive enumeration of association’s sanctions: Criminal fine, warning with punishment salvo and public announcement of the 50 conviction and association’s reprimand, exclusion of subsidies or of the award of public 51 contracts and association’s dissolution. The skimming of profits in accordance to the 52 gross principle (Verfall) can also be imposed. Under certain circumstances, VerbStGB-E sanctions named in Section 5 can be disclaimed. 1. Criminal Fine The criminal fine ranges between five and 360 daily rates depending on the infringement’s gravity and shall not exceed ten percent of the company’s total sales. The amount of the daily rates shall depend on the economic power and result of operations. The latter is measured as the difference between total sales on the one hand and taxes and necessary 53 financial expenses on the other hand. The company is given the opportunity to influence the criteria for sentences, i.e. nature, seriousness and duration of the organization's fault, especially the behavior after the infringement, such as the effort for compensating damages and arrangements to avoid 54 future infringements—remediation and compliance. Internal Investigations and Disclosure should be considered as well, since the internal investigations are necessary to optimize a Compliance Management System (CMS) and the disclosure enables the authorities to clarify the company’s offenses completely and to set a proportionate punishment. 48

VERBSTGB-E at 36, 45.

49

See Rübenstahl, supra note 4, at 26, 29.

50

VERBSTGB-E § 4(1) at 9.

51

VERBSTGB-E § 4(2) at 9.

52

VERBSTGB-E § 3(1) at 8; STGB § 73.

53

VERBSTGB-E at 57.

54

VERBSTGB-E at 58.

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The maximum amount of ten percent of company’s total sales is nevertheless disproportionately high. The calculation rules for antitrust fines were the archetype for the draft and they can be explained by evidential difficulties regarding “Verfall” (forfeiture or 55 confiscation). In contrast, there are many company offenses that do not necessarily lead to any profit and are not committed with the intention of profit: serious accidents at the workplace, product liability cases with (a high number of) personal injuries or deaths, serious environmental crimes, etc. According to the draft, those offenses lead to high criminal fines, even if they are not comparable to the cost-benefit analysis of antitrust fines and cannot justify the unspoken goal of “Verfall.” The determination of sales is the baseline for the assessment of penalty, therefore the worldwide turnover by legal and natural persons shall be summarized, if natural and legal 56 persons act as an economic entity. This regulation gives cause for concern: in regard of a penalty sentence a liable participation of all subsidiary companies is simulated, even if the peripheral subsidiary companies are not specifically related to the holding company. This is 57 a possible breach of the principles of proportionality and liability. The simple existence of an economic unity does not justify an attribution that is adequate to the principle of liability—in contrast to the antitrust fine in accordance to Section 81 (4) sentence 2–4 GWB 58 which has no expression of society's condemnation. Furthermore, the expression 59 “economic entity” is highly uncertain since it leads to difficulties in distinguishing cases of larger and complex Groups. The application of the expression may, therefore, be a breach of the principle of certainty in accordance to Article 103 (2) GG. Additionally, the ne bis in idem principle in accordance to Article 103 (3) GG may be breached if the holding company is chargeable due to violations of organizational and supervisory duties regarding the 60 subsidiary and the total sales of the Group is relevant for sentencing both companies. The same applies for a German Limited (GmbH) and its single director-participator.

55

Cramer & Pananis, Kartellrecht GWB, § 81 marg, 59 (2009).

56

VERBSTGB-E § 6(5).

57

See Rübenstahl, supra note 4, at 26, 30.

58

Bundesverfassungsgericht [BVERFGE] [Federal Constitutional Court], July 16, 1969, Case No. II BvL 2/69 at paras. 18, 27, 33. 59

60

As well in antitrust law. See Cramer & Pananis, supra note 56.

Rübenstahl, supra note 4, at 26, 30; Görtz, Unternehmensstrafrecht: Entwurf eines Verbandstrafgesetzbuchs, 1/2014, WIJ 7 (2014), available at www.wi-j.de/index.php/de/wij/aktuelle-ausgabe/item/244unternehmensstrafrecht-entwurf-eines-verbandsstrafgesetzbuchs.

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2. Overkill of Penalties Due to Additional “Verfall” based on the Gross Principle Furthermore, the corporate criminal fine “Verfall” in accordance to Section 73 ff. StGB must be ordered by the judge, since sanctions of the general part of the StGB (German 61 Criminal Code) are additionally applicable if not stated otherwise. Thus, the rules of thirdparty-“Verfall” would be cumulatively applicable (Section 73 (1) (3) StGB). The application of Section 73 (1), (3) StGB would lead to the forfeiture of all revenues gained by a 62 corporation deriving from a crime without deduction of expenses Empirically, the thirdparty-”Verfall” has rarely applied on companies, since the prosecutors—in agreement with the company—feel able to order adequate corporate administrative fines in accordance 63 with Section 30 OWiG during the less complicated non-public preliminary proceedings. They could also skim the economic advantage of the corporation’s offense in accordance to Section 17 (4) OWiG—and not necessarily the whole revenue. Because corporate criminal fine—in accordance to the principle of legality—precedes the instruments of the 64 OWiG, this way will be barred. The draft combines the corporate criminal fine and the “Verfall” compulsorily, so the punishment may be in breach of the prohibition of excessive measures in particular cases. The calculating rule of the criminal fine borrowed by the antitrust law includes elements of skimming the profit. The “Verfall” in accordance to the gross principle on the other side is not only a skimming process but is a virtual 65 punishment. The combination of high payment exceeds the solvency of even very profitable companies—especially since the amount of the daily rates is in relation to the total sale and the liquid assets of a company regularly does not catch the edge of ten percentage of the annual sales. This accumulation leads to a more draconic punishment than in any other comparable 66 legal system.

61

VERBSTGB-E § 3(1) at 8; in detail about difficulties of the perpetration of an offense, see Mitsch, Täterschaft & Teilnahme bei der Verbandsstraftat, 1/2014 NZWIST 1, 4 (2014). 62

Bundesgerichtshof [BGH] [Federal Court of Justice], Mar. 21, 2002, Case No. 5 StR 138/01, para. 477.

63

Rübenstahl, Anwaltskommentar-StGB, § 73 marg. 61a-61g (2014).

64

Görtz, supra note 61, at 3, 4.

65

Rübenstahl, supra note 4, at 26, 31.

66

See Rübenstahl, supra note 28, at 505; Rübenstahl & Boerger, Der Foreign Corrupt Practices Act (FCPA) der USA Part 4, 8/2013 NZSTWI 281 (2013); see also Rübenstahl & Boerger, Der Foreign Corrupt Practices Act (FCPA) der USA Part 5, 10/2013 NZSTWI 267 (2013); Rübenstahl & Skoupil, supra note 29, at 209.

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3. Penalties and Sanctions Against the Legal Successor The legal successor is sanctioned if he knew the legal predecessor’s infringement—wholly 67 or partly—or recklessly did not know it at the time of transfer of rights. The draft equates the universal succession with the different sorts of transformation and the singular succession if the acquirer takes all relevant assets of the predecessor and applies it in the 68 same way. In range of Mergers and Acquisition, the acquirer’s liability for predecessor’s infringements would be related to knowledge because the previous Due-Diligence or the reckless unawareness because of missing or inadequate Compliance-Due-Diligence-Checks. The acquirer should try to displace liability risks for corporate crimes before the acquisition to the transferor because the delineation of simple negligent and reckless unawareness is too difficult to rely on. The authorities will assume recklessness at least in cases where the Acquirer-Due-Diligence does not cover the typical Compliance-Risks or the analysis is too cursorily to uncover systemic problems. Therefore, it seems unjust that only the reckless acquirer is to be punished but not the transferor, even if the seller in bad faith earns the economic equivalent to the sold 69 company. 4. Compliance, Internal Investigations, and Disclosure as a Cause for Refraining from Punishment (Similar to a Non Prosecution/Deferred Prosecution Agreement) Under the draft, the prosecutors and the court can decide to refrain from imposing a corporate sanction if the corporation has established the necessary Compliance Management System (CMS) to avoid comparable offenses in future. It is required, though, that no considerable damage has occurred or a considerable damage has been 70 comprehensively compensated. Otherwise the corporation must prove adequate compliance efforts for the future and additionally it is obliged to disclose evidence against the corporation voluntarily prior to the trial. The evidence must be adequate to prove the 71 offense. The effectiveness of a CMS is crucial for such non prosecution decisions.

67

VERBSTGB-E § 2(4) at 8; see STGB § 261(5); VERBSTGB-E at 50.

68

VERBSTGB-E § 2(4) at 8.

69

Rübenstahl, supra note 4, at 26, 31. Also in favor of a rule similar to section 30(2)(a) OWIG, see Görtz, supra note 60, at 8. 70

See STGB § 46a II; VERBSTGB-E § 5(1) at 9; Hein, Verbandsstrafgesetzbuch (VerbStrG-E) – Bietet der Entwurf Anreize zur Vermeidung von Wirtschafskriminalität in Unternehmen?, 2/2014 CCZ 75, 77 (2014) (criticizing the use the draft makes often termed “damage”). 71

VERBSTGB-E § 5 at 9–10.

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Nonetheless, the draft remains silent regarding specific guidelines establishing and 72 evaluating a CMS. This is surprising to a large number of scholars because suitable U.S., 73 British, or Italian role models do exist. Criminal judges might have difficulties in evaluating CMS without practical experiences and binding guidelines, therefore putting the requirements unnecessarily high. Regarding the wide scope of personal application, nonprofit associations or small communities might be overstrained by the compliance 74 requirements in legal, economic, organizational and personal matters. In contrast to the leniency program in accordance with Section 46b StGB, the requirements for evidence disclosure are considerably higher, which is problematic regarding the principle of equal treatment in accordance to Article 3 (1) GG. The concept that the suspected must prove the effectiveness of CMSs to be released from liability is a virtual breach of in dubio pro reo 75 principle and might be unconstitutional. In addition, the draft does not contain additional incentive on introducing effective CMS preventively, before a corporate offence is committed and detected: Whereas Compliance-Programs being implemented after a corporate offence are privileged in accordance with Section 5 (1) VerbStGB-E, CompliancePrograms that were settled before—but were not able to prevent the corporate offence— 76 cannot refrain from punishment. 5. Cautioning with Additional Measures and Public Announcement of the Conviction Alternatively, the court may issue a cautioning with additional measures and set conditions and instructions that must be fulfilled by the association during a certain probation 77 period. Furthermore, the association can be ordered to pay a certain amount to a nonprofit organization. Since the amount of the payment is not defined in the draft, there is the risk that the courts might tend to the potential criminal fine—comparable to Section 153a StPO—which would be disproportional regarding the additional “Verfall” in 78 accordance to Section 3 (1) VerbStGB-E. 79

The “corporate pillory” will focus on certain natural persons, thus it is doubtable that the 80 draft is adequate to constitutional, especially data-protection law. Furthermore, a 72

Rübenstahl & Skoupil, supra note 29, at 209; Görtz, supra note 61.

73

Rübenstahl & Skoupil, supra note 29, at 209; Rübenstahl, supra note 4, at 32.

74

Rübenstahl, supra note 4, at 26, 32.

75

See GRUNDGESETZ [GG] [BASIC LAW] arts. 2 I & 20 III.

76

Hein, supra note 70, at 75, 78.

77

VERBSTGB-E §§ 7–8 at 11.

78

Rübenstahl, supra note 4, at 26, 32.

79

VERBSTGB-E at 26.

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“naming and shaming” is contradicting to modern Continental European principles of criminal law. 6. Non-Criminal sanctions The other sanctions proposed in the draft could lead to more draconic effects than criminal sanctions. Sections 10 ff. VerbStGB-E provides for the exclusion of subsidies or the award of public contracts and association’s dissolution. The exclusion of subsidies or the award of public 81 contracts for at least one year can lead to the insolvency of certain corporations, especially in addition to imposed criminal fines and “Verfall”. This seems misguided, as the German economic administrative law provides for sufficient, more specific and proportional possibilities of responding, particularly the refusal or revocation of permissions, the prohibition of activities, and, in extreme cases, the enforced association’s 82 dissolution. I. Procedure The criminal proceeding against associations in principle follows the general rules, particularly the StPO and GVG, if the rules can be applied on associations and if the 83 VerbStGB does not contain more specific rules. The Landgericht (Regional Court) of First Instance is competent if association’s reprimands are expected or if the case is brought in an action at the Landgericht in accordance to Section 24 (1) No. 3 GVG and the Oberlandesgericht (Higher Regional Court) is not competent. Sections 74 (2) 74a, 74b, 74c 84 GVG apply accordingly and rule the competence of the Landgericht as well. 1. Principle of Legality 85

The prosecutors have the duty to pursue any association’s offenses if there are sufficient 86 factual indications that the association has committed an offense. Refraining from pursuit 80

See Görtz, supra note 61.

81

VERBSTGB-E §§ 10–11 at 12.

82

See Rübenstahl, supra note 4, at 26, 33.

83

See VERBSTGB-E § 13(1) at 13; for more details, see VERBSTGB-E §§ 13(3), 15–16, 21–22 at 13–14, 17.

84

VERBSTGB-E § 15(3) at 14.

85

VERBSTGB-E § 14(1) at 13.

86

VERBSTGB-E § 14(2) at 13.

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according to Section 153, the draft does not mention 153a StPO explicitly. The more specific Section 14 (2) and (3) VerbStGB-E may forbid an application of Sections 153, 153a 87 88 StPO. Even though Hoven, Wimmer, Schwarz, and Schumann argue convincingly that the Sections 153, 153a StPO could be considered to be applicable in a criminal procedure against associations and corporations, some legal uncertainty remains with regard to this assertion. As the capacity of German Criminal Law would be overwhelmed by even some dozen court procedures in complex and wide ranging cases against lager companies, it would be preferable if the legislator clarified the (analogous) applicability of the diversionary proceedings according to Sections 153, 153a StPO against companies. . Proceedings against associations shall be closed without sanctions if the infringement occurred completely outside of Germany and if a sanction, which is adequate regarding both the effect on the association and the defense of the legal system, was imposed 89 abroad or can be expected to be imposed abroad. If the case is brought to action the 90 court may close the case on the prosecution’s request —probably under the conditions of sentence one. Section 154(3) to (5) StPO rule the procedures of reopening the proceeding 91 accordingly. In contrast to the draft, the implementation of the principle of legality regarding the combined criminal fine and “Verfall” would lead to a disproportional, inflexible, and cost92 inefficient result. 2. Measures to safeguard the Proceedings 93

The innocuously worded heading of Section 20 (1) VerbStGB-E provides for the possibility of freezing order of the court up to ten percent of the assumed three-year average sales of an association, if it is strongly suspected to have committed association’s crimes and there is a strong suspicion that decision-makers stash the association’s property or want to 94 dissolute the association to prevent a criminal proceeding. A previous hearing is not necessary. The freezing order could exceed most company’s liquidity and would risk 87

See Rübenstahl & Tsambikakis, supra note 3, at 8, 11.

88

Hoven et al., supra note 38, at 210.

89

VERBSTGB-E § 14(3) at 13–14.

90

VERBSTGB-E § 14(2) at 13.

91

VERBSTGB-E § 14(3) at 13–14.

92

See Rübenstahl, supra note 4, at 26, 33.

93

See Rübenstahl & Tsambikakis, supra note 3, at 8, 12.

94

See STGB § 283(1)(1).

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insolvencies. The insolvency risk would increase even more , if the assumed amount of 97 offense’s profits can be confiscated provisionally during the criminal investigation . 3. Representation and Defense Counsel In the criminal trial tthe association is represented in accordance to the rules of civil 98 procedure, particularly Section 51 ZPO. Individuals being Defendants accused of having committed the infringement or the omission in sense of Section 2 (2) VerbStGB-E are 99 barred from representation of the association. They can be interrogated as targets, not 100 as witnesses and are entitled to retain defense counsel. 101

The defendant´s rights under Sections 133–136a StPO are applied accordingly. The 102 prohibition of multiple defense is explicitly not valid for the association and the natural 103 person being accused of the infringement. Still, the legislator may have had the one104 person-GmbH in mind, but the uncertain expression “if there is no conflict of interests” is highly problematic. There is reason to fear that most associations will try to defend at the 105 expense of the individual accused and vice versa. In most cases with potential recourse claims against e.g. board members of a corporation, a conflict of interest should be 106 assumed. If the association lacks legal representation, for example because all legal representatives are accused the court will provide a public defender at the request of the prosecuting

95

See Rübenstahl, supra note 4, at 26, 33.

96

See Rübenstahl, supra note 4, at 26, 33.

97

See VERBSTGB-E §§ 13(1)&(3) at 13; STPO § 111(b); STGB at § 73.

98

Not targets of a criminal investigation. See Hoven et al., supra note 38, at 201, 204, 206.

99

VERBSTGB-E § 17(1) at 15.

100

See Rübenstahl & Tsambikakis, supra note 3, at 8, 12.

101

VERBSTGB-E § 18(1) at 15.

102

STPO § 146.

103

VERBSTGB-E § 18(2) at 15.

104

VERBSTGB-E at 77.

105

See Rübenstahl, supra note 4, at 26, 33.

106

See Rübenstahl & Tsambikakis, supra note 3, at 8, 12.

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authority. If the public defender is provided despite the association’s will, 109 breach of the fundamental right of effective defense.

108

this is be a

D. Conclusion NRW’s draft of a corporate criminal liability code should not become law. The suggested combination of drastic mandatory association’s sanctions and reprimands in addition to the existing faculty of “Verfall” (forfeiture or disgorgement of the full revenue) is highly questionable in terms of constitutional law. It is in fact unnecessary and could lead to an 110 “overkill” of sanctions. Even without considering “death penalty” for associations provided in the draft, the consistent pursuit and the combined application of the economic sanctions would probably cause unnecessary company crises, insolvencies, and unemployment. The proposed corporate criminal law contains collective punishments at the expenses of innocent owners, stakeholders or employers, and would mean a relevant economic local disadvantage for Germany, as the sanctions are comparatively much more severe than in other jurisdictions. As a result of the draft becoming law, Internal Monitoring Systems and CMS of big associations would not be optimized, as the draft does not provide for effective incentives. Additionally, small associations like non-profit societies would be overstrained. A few well-aimed modifications of the existing laws on corporate administrative fines would have a more convincing effect. The unclear, half-baked, and partially constitutionally invalid procedural prescriptions of the draft would unduly restrict and complicate the association’s defense. The politically-motivated implementation of the principle of legality might lead to the inapplicability of the closing possibilities of Sections 153, 153a StPO in criminal procedures against associations which would violate the constitutional principle of proportionality. This would also penalize procedural economy 111 and overstrain the capacities of the German criminal justice system.

107

VERBSTGB-E § 19(1) at 15–16.

108

See Rübenstahl, supra note 4, at 26, 33; Hoven et al., supra note 38, at 201, 205.

109

GRUNDEGESETZ [GG] [BASIC LAW] arts. 2(1) & 20(3).

110

Görtz, supra note 61, at 10.

111

See Rübenstahl, supra note 4, at 26, 34.

Special Section The Constitutional Court’s Headscarf Case Religious Symbolism and the Resilience of Liberal Constitutionalism: On the Federal German Constitutional Court’s Second Head Scarf Decision By Matthias Mahlmann

Abstract The second decision of the German Federal Constitutional Court on the Islamic headscarf declares a general ban on headscarf to be unconstitutional and, in particular, a violation of freedom of religion. This case note examines whether this decision is an ill-conceived weakening of a religiously neutral state or, to the contrary, an encouraging manifestation of a liberal constitutional order that takes its aspirations in a highly contested area of law seriously.

A. Two Questions of Political Civilization One of the great questions of our time is whether peace between different religions has a future. The full meaning of this question is spelled out in open wars of geo-strategic importance involving major external powers and in what is called asymmetrical terrorist action with organizational backgrounds or driven by individual deadly fanaticism, as in the recent attacks on Charlie Hebdo. This problem not only concerns world religions but is also—as it has been for much of history—fueled by intrareligious sectarianism. The conflicts in Syria, Iraq, and now Yemen serve as a bloody and devastating testimony to this 1 fact. Liberal constitutional orders have a particular responsibility in this situation to show ways that such tragedies can be avoided and how it is not only possible but also can be experienced as a great cultural and social privilege to live in a society where many ways of interpreting human existence, of whatever religion or secular outlook, coexist and even more often than not—despite all differences and conflicts which should not be glossed 

Chair of Philosophy and Theory of Law, Legal Sociology and International Public Law, Faculty of Law, University of Zurich, Switzerland. 1

For a recent reminder on the different potential and aspiration of the revolutionary movement in the Middle East, see CHIBLI MALLAT, PHILOSOPHY OF NON-VIOLENCE (2015).

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over by pluralist romanticisms—are capable of enriching each other. Given this responsibility, there are good reasons to reflect very carefully on how to strengthen the many already-existing practices of understanding, tolerance, and mutual respect in liberal constitutional orders. In the European context, the relation of the Christian and secular majority towards Muslims is of particular importance, given the number of Europeans of Islamic faith—though there are other crucial issues as well—not the least because of the 2 many forms of xenophobia and anti-Semitism. In the last few years, there has been a symbolic representation of the problems of this relationship: the Islamic head scarf and, more precisely, the question of under what circumstances women are allowed to wear it. A second question of great importance for the contemporary political world concerns the political and cultural resilience of the liberal democratic constitutional order under the rule of law—the normative identity of which is defined by fundamental and human rights. The question is: How deeply is this piece of political and legal civilization actually rooted in the political culture and, ultimately, the bedrock convictions of the people who establish, maintain, and protect it? How fragile is this order? It is after all a very precious asset indeed, as not only the conflicts in the Middle East vividly illustrate through the suffering caused by political anomy every day. The question of the resilience of modern constitutional orders has many facets. Some of the dangers for these orders stem from within the core of their political institutions. An example of this is the attacks on their basic tenets in the framework of the War on Terror seeking to curtail fundamental liberal rights, with far-reaching effects for the project of 3 democratic self-governance. Other threats are formulated by new forms of political populism—often from the far right—that are quite successful in various European states, e.g. in Hungary. And there are perils originating in the religious sphere because of radical challenges that are formulated by religious movements pursuing political ideas that are the opposite of the democratic constitutional political order bound by fundamental rights. This danger is not abstract and remote but concrete and alive, as epitomized by the success of a political monstrosity like ISIS, which is even able to recruit people in Europe, or by the hatred behind the slaughter in Paris and the political ramifications that it may have. These two problems are intertwined. One view of their relationship is that protection of the liberal constitutional order and religious tolerance is not easily—if at all—reconcilable. It is maintained that, to the contrary, intolerance against certain religious manifestations is not only justified but necessary to protect the constitutional order that European states and others enjoy. This intolerance includes—and this is the central point of the issue discussed herein—opposition to symbolic manifestations of certain religious beliefs, 2

3

See, e.g., the series of murders claimed by the neo-fascist terror cell NSU.

David Cole, Must Counterterrorism Cancel Democracy?, THE NEW YORK REVIEW OF BOOKS, available at http://www.nybooks.com/articles/archives/2015/jan/08/must-counterterrorism-cancel-democracy/.

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primarily those of Islam. The contention is that, in order to protect the liberal constitutional order, not only a political and cultural containment, but also a roll-back of the cultural—including the symbolic—presence of Islam in Europe is the order of the day. This is necessary, it is argued, to defend democracy, fundamental rights—not the least the 4 equality of men and women—and the secular constitutional order in general. To underline this thrust of the debate, it is crucial to calibrate the discussion correctly, as no one doubts that intolerance against certain kinds of (religiously motivated) actions is manifestly justified. For example, there is no discernable reason to tolerate action that curtails the freedom of women by coercing them into ways of life they do not want to pursue. The same is true for any violent action that is directed against the democratic constitutional state and its order, with the usual caveats applying to the concreteness of the danger, among others that apply in such cases. Additionally, there is no question that the minds of all people united in a constitutional order normatively defined by fundamental rights and democracy have to be won again and again for this crucial political project of our time and that correspondent efforts have to be made to accomplish this goal. That such efforts are successful is far from evident, given the victories of other forces and of religious obscurantism, authoritarianism, and hatred against out-groups, as is witnessed daily. The question is, therefore, whether—beyond these evidently necessary measures to protect democratic constitutional orders against their enemies—a fight in the realm of symbols and their meaning has to be undertaken to truly counter the threat against this order and to increase its necessary and precious resilience against its many enemies. The headscarf is perhaps the prime example of this problem. B. The Second Head Scarf Decision 5

The cases decided now by the German Federal Constitutional Court are useful illustrations of the political content of these discussions and the possible legal answers a constitutional order may formulate. Let us first consider what the German Federal Constitutional Court decided and put the decision that has already stirred an intensive debate in a wider perspective. The decision concerns two constitutional complaints directed against 6 sanctions, confirmed by the German Labor Courts and the Federal Labor Court, that were 4

The prohibition of Minarets in Switzerland was, among others, driven by the argument that more than the four existing Minarets in Switzerland would give Islam too much room in the symbolic space of religious faith. 5

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 27, 2015, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10, http://www.bverfg.de/SharedDocs/Entscheidungen/DE/2015/01/rs20150127_1bvr047110.html. 6

See Bundesarbeitsgericht [BAG] [Federal Labor Court], Aug. 20, 2009, Case No. 2 AZR 499/08, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=2%20AZR%20499/08; Bundesarbeitsgericht [BAG] [Federal Labor Court], Dec. 10, 2009, Case No. 2 AZR 55/09, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=2%20AZR%2055/09.

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imposed on the complainants because they insisted on wearing a head scarf or a substitute as an expression of their religious faith. Both cases concerned the area of schools; one complainant was a social worker who was engaged in mediation in case of school conflicts; the other was a school teacher. In the first case, the woman—a German citizen—substituted an off-the-shelf woolen hat covering her ears and a garment covering her neck, e.g. a polo turtleneck, for the headscarf she had worn since she was seventeen after being reprimanded by school authorities. The German school authorities nevertheless maintained that this hat and turtleneck were still a display of the Islamic faith and—more concretely—a symbol of an attitude hostile to human dignity, the equality of the sexes, the fundamental liberties of 7 the German Constitution, and the liberal-democratic basic order of Germany. The same reasoning was applied to the second case in which the teacher wore a traditional Islamic 8 headscarf. On the basis of a recently-promulgated regulation in the North Rhine-Westphalia 9 Education Act, the first complainant was reprimanded and the second one dismissed because they were not prepared to remove the hat or the headscarf while performing their professional duties. The North Rhine-Westphalian Education Act prohibits the expression of political, religious, ideological, or similar views, which are likely to endanger or interfere with the neutrality of the state with regard to pupils and parents or to endanger or disturb the political, religious, 10 or ideological peace at school. The Act contains a further regulation that provides conduct that might create the impression amongst pupils or parents that a teacher advocates against human dignity, the principle of equal treatment, fundamental freedoms, 11 or the free democratic order is prohibited. Finally, the regulation provided that carrying out an educational mandate in accordance with the Constitution of the Land, presenting both Christian and occidental education and cultural values accordingly, does not 12 contradict the prohibition set out in the previous sentences of this norm. The latter regulation had been interpreted by federal courts in Germany as not allowing differentiation between religions with the consequence that, according to this 7

BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 8.

8

Id. at para. 26ff.

9

Education Act of North Rhine-Westphalia § 57 Sec. 4, sent. 1 (Jun. 13, 2006).

10

Id. at § 57 Sec. 4, sent. 1.

11 Id. at § 57 Sec. 4, sent. 2. 12 Id. at § 57 Sec. 4, sent. 3.

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jurisprudence, any visible religious symbol was prohibited in North Rhine-Westphalia. 14 These rules applied to social and educational staff. Both complainants worked without 15 problems for several years in their respective workplaces. The sanctions against the two women were upheld by the German Labor Courts, including the German Federal Labor 16 Court, which argued that it was permissible to ban such a visible religious symbol in schools because of the danger of interfering with other constitutional protected values, not the least with the (negative) freedom of religion of pupils, the rights of parents to educate their children, and the neutrality of the state. This jurisprudence was informed by the 2003 decision of the German Federal Constitutional Court, which accepted an abstract ban of visible religious symbols in schools as a constitutionally admissible regulation of that issue, but left it to the Länder (States) to decide whether they would pursue such a course 17 or to continue to allow such symbols as had been the practice in the past. It is important to note that in several German Länder, no such ban on religious symbols, such as the headscarf, exists, and from all that is reported, there are no substantial problems connected with this more liberal practice. The Federal German Constitutional Court was invited to reconsider its own jurisprudence 18 and came to new conclusions. It decided that an abstract ban on headscarves and other visible religious symbols for teachers at a state school is not compatible with the

13

Bundesarbeitsgericht [BAG] [Federal Labor Court], Aug. 20, Case No. 2 AZR 499/08; Bundesarbeitsgericht [BAG] [Federal Labor Court], Dec. 10, 2009, Case No. 2 AZR 55/09; Bundesverwaltungsgericht [BVerwG] [Federal Administrative Court], 116 ENTSCHEIDUNGEN DES BUNDESVERWALTUNGSGERICHTS [BVERWGE] 359 (on a parallel provision in Baden-Württemberg and the comments by Böckenförde JZ 2004, 1181, 1183). The Bavarian Constitutional Court took a different position. Compare Bayerischer Verfassungsgerichtshof, Jan. 15, 2007, Vf. 11-VII-05, with MAHLMANN, DIFFERENZIERUNG UND NEUTRALITÄT IM RELIGIONSVERFASSUNGSRECHT, MYOPS 39 (2007). 14

Education Act of North Rhine-Westphalia § 58, sent. 2.

15

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 27, 2015, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10, para. 7f, http://www.bverfg.de/SharedDocs/Entscheidungen/DE/2015/01/rs20150127_1bvr047110.html. 16

See Bundesarbeitsgericht [BAG] [Federal Labor Court], Aug. 20, 2009, Case No. 2 AZR 499/08, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=2%20AZR%20499/08; Bundesarbeitsgericht [BAG] [Federal Labor Court], Dec. 10, 2009, Case No. 2 AZR 55/09, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=2%20AZR%2055/09. 17

See 108 BVerfGE 282, NEUE JURISTISCHE WOCHENSCHRIFT [NJW] 56 (Sept. 24, 2003); Mahlmann, Religious Tolerance, Pluralist Society and the Neutrality of the State: The Federal Constitutional Court’s Decision in the Headscarf Case, 4 GERMAN L.J. 1099 (2003). 18

The Second Senate decided the older case, while the first the newer. This raises questions under Section 16.1 Bundesverfassungsgerichtsgesetz: The plenary of the Federal German Constitutional Court has to decide if one Senate wants to decide a matter differently than another Senate.

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19

Constitution because it is disproportionate. It held that this ruling does not exclude the possibility of prohibiting religious symbols in the case of a concrete danger to the peace at school or the neutrality of the state. The Constitutional Court argued that such a danger had to be qualified, manifest, and substantial enough to justify a prohibition. In this case, under qualified circumstances that make it proportional to do so, the state is allowed to prohibit expressions of religious beliefs for a certain amount of time at a certain school or a 20 certain school district if that is the only solution to prevent considerable conflict. The threshold is a sufficiently specific danger to the peace at school or the state neutrality in a 21 substantial amount of cases. Additionally, the state is under a duty to accommodate the interests of the person concerned, for example by employing the person in another 22 educational environment. The Court came to this conclusion by narrowly interpreting the relevant provision of the Education Act and by declaring one of its provisions unconstitutional. It accepted the general rule contained in this Act outlining the duty not to publicly express views of political, religious, ideological, or of a similar nature that are likely to endanger or interfere with the neutrality of the State regarding pupils or parents or to endanger or disturb the 23 political, religious and ideological peace at school. The Court argued, however, that this rule must be interpreted narrowly to meet the standards of the German Constitution. Central to this argument is the freedom of faith and freedom to profess ideological beliefs. Pursuant to Article 4, Sections 1 and 2 of the German Basic Law, this provision guarantees the right of teachers at interdenominational state schools not only to hold religious beliefs 24 but also to adopt behaviors according to the rules of their particular religious outlook. In that respect, as in other cases, the particular self-perception of the religious community and the individual concerned is regarded to be central to determining the content of 25 religious duties. State authorities are not to judge the content of religious belief. The Court holds that an Islamic headscarf can reasonably be regarded as a mandatory religious duty despite the fact that there are many discussions about its compulsory role within 26 Islam. 19

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 27, 2015, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10, para. 77ff, http://www.bverfg.de/SharedDocs/Entscheidungen/DE/2015/01/rs20150127_1bvr047110.html. 20

See id. at paras. 80, 113.

21

See id.

22

See id. at para. 113.

23

See id. at para. 103.

24

See id. at para. 83

25

See id. at para. 86.

26

See id. at para. 87ff.

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The Court took the action of the public authorities to be of sufficient gravity to interfere with the complainants’ freedom of religion. It concerned matters of their personal identity, and thus the right of personal development (Article 2, Section 1 in conjunction with Article 27 1, Section 1 German Basic Law). The Court held the interference to be disproportionate. It confirmed that the legislator of North Rhine-Westphalia pursued a legitimate aim in prohibiting the expression of religious beliefs. In the view of the Court it is manifestly a legitimate aim to preserve the religious peace at school and the neutrality of the state, and to safeguard the educational mandate of the state to protect other fundamental rights of 28 pupils and parents, and to prevent conflicts. The Constitutional Court’s decision held that, as such, wearing visible religious symbols does not interfere with the pupils’ negative freedom of faith and freedom to profess a 29 belief. The mere fact of being confronted by such a symbol does not mean—in the view 30 of the Court—that the right not to be indoctrinated is being interfered with. These symbols demand nothing but acknowledgement that the teacher is of a particular faith and imply no proselytizing behavior, be it verbal or in other forms. In addition, regarded in context, such symbolism is relativized and put into perspective by the other faiths or 31 religions adhered to by other staff members. The variety of symbolism thus serves as an example of a pluralist society within state schools. A symbol worn by an employee of the state is to be distinguished from a symbol displayed on the initiative of the state. The state 32 does not identify with this symbol in the former case, only in the latter. Therefore only in the latter case would the display of such a symbol be attributable to the state. The Court consequently regarded an abstract ban to be disproportional in the narrow sense, leaving 33 open whether such a ban is necessary to achieve the legitimate aim pursued. 34

The rights of the parents to educate their children also fails to provide a justification of a different solution as it does not entail the right to shield pupils from a confrontation with

27

See id. at para. 95f.

28

See id. at para. 99.

29

See GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GG] [BASIC LAW] art. 4, translation at https://www.bundestag.de/blob/284870/ce0d03414872b427e57fccb703634dcd/basic_law-data.pdf. 30

See BVerfG, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10 at para. 104f.

31

See id. at para. 105

32

See id. at para. 104.

33

See id. at para. 100.

34

See GG art. 6, § 2, translation at https://www.bundestag.de/blob/284870/ce0d03414872b427e57fccb703634dcd/basic_law-data.pdf.

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educational staff members that visibly adhere to a certain religion. The same holds for 36 the State's educational mandate, which has to be carried out in accordance with the State's duty to religious and ideological neutrality, as this mandate encompasses only the prohibition of conduct that can be regarded as a sufficiently specific danger to the peace at 37 school or the neutrality of the State. The Constitutional Court followed its consistent case law and defined the neutrality of the state as an open form of neutrality, one that is comprehensive and encourages freedom of faith equally for all beliefs. The mere visibility of religious symbols is not taken as a violation of this principle of the open neutrality of the state. The Court held that an identification of the headscarf—irrespective of other factors—as a manifestation of 38 contempt for democracy, the rule of law, and fundamental rights was implausible. It underlined that, especially in the case of the hat and turtleneck, such an interpretation was 39 particularly far-fetched. The Court made explicit that this reasoning applied to other 40 visible religious symbols as well, such as the nun’s habit or a kippa. In addition to these considerations stemming from the religious freedom of the complainants, the Court argued that another interpretation would cause problems under Article 3, Section 2 of the German Basic Law, which prohibits discrimination on the ground 41 of sex. It held that, despite the respective regulation of the Education Act’s being formulated without explicit differentiation according to sex, it still applied disproportionally to women, as Muslim women are the largest group concerned by this prohibition under the circumstances. The abstract ban of a religious symbol such as the headscarf, the court held, would thus constitute a factual or—as one might say in common 42 legal terminology—indirect discrimination on the grounds of sex. Only under the narrow interpretation of the Education Act formulated by the Court could such a violation of Article 3, Section 2 of the German Basic Law be avoided. The Court argued that, in addition, this interpretation is reconcilable with Article 12 of the German Basic Law on 35

See BVerfG, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10 at para. 106.

36

See GG art. 7, § 1, translation at https://www.bundestag.de/blob/284870/ce0d03414872b427e57fccb703634dcd/basic_law-data.pdf. 37

See BVerfG, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10 at para. 108ff.

38

See id. at para. 118.

39

See id. at para. 121.

40

See id. at para. 115. It is noteworthy in this context that the Central Council of German Jews in their amicus curiae held the general ban on religious vestiary symbols to be unconstitutional. See id. at para. 75. 41

See id. at para. 142ff

42

See id. at para. 143ff

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Freedom of Profession and other legal regimes, such as Article 9 of the European Convention of Human Rights and the Federal General Equal Treatment Act, which prohibits 43 discrimination amongst others on the grounds of religion or sex. The regulation in Section 57 Section 4, sentence 3 Education Act, which states that such rules do not apply to an education based on Christian and occidental cultural values, was taken to be unconstitutional because it violated the prohibition of discrimination on 44 grounds of faith and religion. The Court held that the legislative history of the regulation showed that the legislator intended this norm to establish a privilege for Christian and 45 Jewish symbols. The Court took the jurisprudence interpreting this regulation as providing a provision for any kind of visible symbol without privileging any particular 46 religious group as overstepping the boundaries of justified legal interpretation. In the view of the Court, there are no tenable reasons to discriminate between certain forms of religious beliefs given the principle of equal treatment of religions espoused by the Basic Law. C. The Dissenting Opinion The balanced and interesting dissenting opinion confirmed the previous jurisprudence of the Federal Constitutional Court, stating that the ban of a visible religious symbol was 47 constitutional, even in the case of only an abstract danger. The opinion held that only such an interpretation of the German Basic Law paid due respect to the principle state neutrality. The dissenting opinion further argued that employees always represent the state and that a differentiation between symbols worn by the employee and symbols 48 displayed otherwise (e.g. Crucifixes in schools) is thus not admissible. The opinion maintained that the constitutional complaint of the first complainant (who wore the hat and turtleneck) could have been regarded as well-founded given the rather implausible 49 interpretation of state authorities of that garment.

43

See id. at para.148ff.

44

See GG art. 3, § 3, sent. 1, translation at https://www.bundestag.de/blob/284870/ce0d03414872b427e57fccb703634dcd/basic_law-data.pdf; Id. at art. 33, § 3; BVerfG, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10 at para. 123ff. 45

See BVerfG, Case No. 1 BvR R 471/10 & No. 1 BvR 1181/10 at para. 127.

46

See id. at para. 132ff.

47

See id. at para. 2ff (dissenting opinion by justices Schluckebier and Hermans).

48

See id. at para. 17 (dissenting opinion by justices Schluckebier and Hermans).

49

See id. at para. 30 (dissenting opinion by justices Schluckebier and Hermans).

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In the second case, the dissenting judges considered the possibility as well that the complaint may be well-founded due to the circumstances of the case—despite being more skeptical about it—given the need to protect the trust of the second complainant in continuing to wear her headscarf. D. Constitutional Freedom of Religion Made Concrete The decision raises many questions, several of which will be highlighted here. The first concerns the parameters for determining the meaning of a religious symbol and, more concretely, the meaning of a headscarf. Can this meaning be abstractly defined, or is context relevant? This problem had already occupied other courts, including the European 50 Court of Human Rights. The Federal German Constitutional Court denied that such an abstract definition of the meaning of the headscarf exists and insisted that a concrete interpretation is necessary. In particular, the Court doubted that the headscarf is a symbol of hostility towards human rights, democracy, and the rule of law. This is a rather convincing stand because it is indeed impossible to attach to many symbols any fixed meaning while disregarding context, in particular the context provided by the comportment of an individual. That is especially the case for those symbols worn by a person that have an intimate meaning to this particular person, and not to others, and their potentially different interpretation of the symbol. By being independent, educated working women, the complainants already defy a certain kind of interpretation of the headscarf they wear. It is consequently implausible that all women who wear headscarves endorse the meaning initially ascribed to the headscarf by the German school authorities. This is vividly illustrated by Tawakkol Karman, who received the Nobel Peace Prize for her activism in Yemen, amongst others for women’s rights and presented her Nobel Prize 51 lecture with a covered head. The same is true for Malala Yousafzai, who was shot by Taliban for her struggle for girls’ educational rights and also wore a headscarf when 52 accepting her Nobel Peace Prize. This point of view does not deny that there are obviously contexts where a headscarf is in fact connected to such a message, but it does deny that this is necessarily so and that the behavior of a person is not of central importance for that interpretation. There may be symbols whose meaning, at least in wider given contexts, is hard to change—say the meaning of a swastika in Europe. But a headscarf does not belong to this category of symbols.

50 See Vajnai v. Hungary, App. No. 33629/06, (July 8, 2008), http://hudoc.echr.coe.int/. 51

See Tawakkol Karman—Facts, http://www.nobelprize.org/nobel_prizes/peace/laureates/2011/karman-facts.html. 52

See Malala Yousafzai, Nobel Lecture http://www.nobelprize.org/mediaplayer/index.php?id=2424.

(Dec.

10,

NOBELPRIZE.ORG, 2014),

available

at

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The second problem concerns state neutrality. The first sub-question is whether the neutrality of the state is conceptualized as an open neutrality that encompasses the possibility of a religious display within the public sphere or rather takes the form of laicism. The Federal Constitutional Court confirmed its previous case law on the matter, endorsing an open interpretation of state neutrality. This confirmation is laudable from a liberal point of view because it provides for the possibility to live one's faith in the public sphere—even while working for the state—within the limits that particular duties may impose. This decision does not question the jurisprudence of the Court in other cases, including the placement of a Crucifix on school walls. The Court argued rightly that there is a difference between a symbol worn by a person and a symbol displayed by the state. A symbol displayed by the state is evidently one that can be legitimately attributed to the state. In the case of a symbol worn by a person, such an endorsement is not possible because there is no reason to assume that the state identifies with all of the personal displayed convictions of state employees. That no such identification of personal convictions of employees and of the state is justified is clear for a much more important example than vestiary symbols, namely the opinions a teacher holds. This is particularly evident in a pluralist environment where persons may display very different religious thoughts. It is not clear what ramifications the decision will have and what it concretely means for other sphere of public service—e.g. the police, judges, prosecutors etc. Be that as it may, it clearly applies to all visible religious symbols. It is hard to believe that a German pupil confronted with a math teacher wearing a headscarf, a Sikh French teacher wearing a turban, a chemistry teacher wearing a kippa, and a Geography teacher wearing no symbol at all would consider the appearance of these teachers as a state endorsement of Islam, Sikhism, Judaism and Agnosticism respectively. This leads to the next and most important problem: the effect of such a symbol on pupils. This is a serious matter, because children are particularly vulnerable and there are many reasons to protect them against any form of indoctrination. It is important to put into perspective what the effects of religious symbols actually are. It is clear that pupils often do know the opinions and religious orientation of their teacher. Therefore, the headscarf adds little to what the students know and what they are confronted with anyway. One may ask questions, such as whether one should differentiate according to the age of pupils, but even then it is not obvious that a religious symbol otherwise alters the impact a teacher will have. The central point is, therefore, that nothing in the behavior of the teacher crosses the threshold of indoctrination. There is no reliable evidence that the effects of a visible symbol alone have such impact. It is a remarkable fact of the jurisprudence of these cases that not too much effort was made by the courts to establish what the empirically-substantiated consequences of the exposure to such religious symbols on pupils actually are. A notable exception is the German Federal Constitutional Court which, in its prior decision, did try to establish what knowledge in psychology, educational science, and sociology is available in this respect,

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with the result being that there is no hard evidence on the detrimental effects of religious 53 symbols on pupils. The empirical studies are, however, limited in their explanatory power. The fact that the complainants worked for years—as other teachers in other Länder did—without causing any problems is therefore decisive and reverses the burden of proof. It seems thus to mirror the realities of a pluralist society well to state that merely being confronted with the fact that a teacher has a different faith is not as such interfering with pupils’ freedom of religion. Another valuable point of the judgment is the consideration of gender issues. Such consideration is important because the discussions about religious symbols in Germany (as elsewhere) mostly concern symbols worn by women. That could be otherwise if there were a comparable presence of Jewish teachers wanting to wear a kippa at school, for example, a situation that may change the terms of the discussion considerably given Germany’s past. The qualification of the ruling allowing public authorities to prohibit symbols in the case of concrete danger seems reasonable, too, because there are certainly imaginable situations where religious conflict is of such intensity that the visibility of such symbols would only intensify already-existing problems. In that case it seems acceptable to demand believers to adapt their behavior accordingly or to be open to employment in a different environment, which the Court proposed as a measure of reasonable accommodation. The dissent provided important arguments. These arguments, however, are not as convincing as the conclusions of the majority of the Court. Given what has been said, the dissent indicated an important aspect of the decision by its differentiated approach to concrete cases: The harsh attitude towards Islamic headscarves that was manifested in some of the actions of state authorities in North Rhine-Westphalia found no echo within the Court. E. Soumission à l’allemande? Germany has recently contributed to the history of political farce with its so called PEGIDA (Patriotische Europäer gegen die Islamisierung des Abendlandes; Patriotic Europeans Against the Islamization of the Occident) movement, a succession of organized demonstrations that found considerable participants in Dresden and, to a lesser degree, elsewhere in Germany. These demonstrations often were accompanied by counterdemonstrations and other protests,—e.g. turning off the lights on the Cologne Cathedral, 53

See 108 BVerfGE 282 (306), 56 NEUE JURISTISCHE WOCHENSCHRIFT [NJW] (Sept. 24, 2003). The European Court of Human Rights in its decision in the Dahlab v. Switzerland case did not consider existing empirical studies but rather stated a detrimental effect of visible symbols as evident, despite the fact that the teacher concerned taught without problems for three years. See Dahlab v. Switzerland, ECHR App. No. 42393/98 (Feb. 15, 2001), http://hudoc.echr.coe.int/eng?i=001-22643#{%22itemid%22:[%22001-22643%22]}.

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to show that the church did not want to have anything to do with the PEGIDAdemonstrators. Behind the PEGIDA movement were rather amorphous fears within the population originating in a region that has a very small percentage of people with immigration backgrounds. This is a recent example of the kind of discussions that manifest an increasingly hostile attitude towards Islam in Europe. The background of these movements is, among others, an identification of Islam with some of its fanatic adherents that shocked the world with barbaric acts, from 9/11, to Charlie Hebdo, to the cruelties of the Islamic State (ISIS). In such an environment, Michel Houellebecq’s most recent novel, titled Soumission, enjoyed considerable success in Europe and other countries. The novel tells the story of the submission of the French people under the authoritarian rule of an Islamic party, epitomized by the protagonist of the novel, who is partly motivated by sadomasochistic tendencies and who lost every direction, preferring a comfortable life within an authoritarian structure to the demands of a more autonomous pursuit of happiness. Some commentators consider this novel an important statement about the situation in Europe. This is surprising, given that it seems not too far-fetched to think that the real danger in Europe (and elsewhere) is the submission of the liberal order under a new democraticallycamouflaged authoritarianism, if not of the extreme right wing, at least profoundly colored by the latter’s political agenda. The many forms of populist right-wing movements and their success and influence on mainstream policy illustrate this. After all, the Front National, not an Islamist party, competes for the French presidency. Given this real danger, the decision of the Federal Constitutional Court must be regarded as highly welcome. It is the product of an intense political and legal debate, one in which many have argued for years for a differentiated solution—like the one now endorsed by 54 the Court. The judgment enforces the central principle that all religions must be treated equally. It displays sensitivity towards the importance of religious faith and a differentiated approach to the impact religious symbols may have. The consequence of the judgment is— though not spelled out in these terms—that it is not outward appearance but rather human substance that counts when individuals’ religiously-motivated comportment is to be evaluated. This is important because it is the central lesson taken from religious 54

See, e.g., a) for the constitutionality of such a solution: Böckenförde, „Kopftuchstreit“ auf dem richtigen Weg?, NEUE JURISTISCHE WOCHENSCHRIFT [NJW] 723 (2001); C. WALTER & A. VON UNGERN-STERNBERG, Verfassungswidrigkeit des nordrhein-westfälischen Kopftuchverbots für Lehrerinnen, DIE ÖFFENTLICHE VERWALTUNG 488 (2008); S. Korioth in Maunz/Dürig, GG, 72. Aufl., 2014, Art. 140/136 WRV, Rn.62; M. Morlok/J. Krüper, Die „Kopftuch-Entscheidung“ des BVerwG, NJW 2003 (1020–1021); Mager in v. Münch/Kunig, GG, 6. ed. 2012, Art. 4 Rn. 50 (if children are mature enough to determine their religion (religionsmündig)); Matthias Mahlmann, Religious Tolerance, Pluralist Society and the Neutrality of the State: The Federal Constitutional Court’s Decision in the Headscarf Case, 4 GERMAN L.J. 1099 (2003); b) against the constitutionality of such a solution: Kokott in SACHS, GRUNDGESETZKOMMENTAR, Art. 4 Rn. 64; Jarass in Jarass/Pieroth, GG, 13. Aufl. 2014, Art. 4 Rn. 36; Dollinger/Umbach in Umbach/Clemens, GG, 2002, Art. 33, Rn.52; F. Hufen, Der Regelungsspielraum des Landesgesetzgebers im “Kopftuchstreit,” NVwZ 2004, 575.

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conflicts formulated by many in the crucial period of the Enlightenment, including 56 57 58 Lessing, his friend Mendelssohn, and his correspondent Kant : Namely that one must perceive the individual beyond his religious appearance to gain common human ground, the ultimate foundation of the construction of religious freedom and peace in Europe after centuries of barbaric wars. The decision will be criticized, perhaps even as a symptom for the submission of a liberal culture to extremist forces that Houellebecq describes. But such criticism threatens to lead one astray. The decision is rather the confirmation of the strength and great attractiveness of a constitutional order that guarantees human rights and curtails liberty only if there are concrete dangers to the values that a liberal order is made to protect. It thus is not a symbol of the weakness but an example of the self-affirmation of a liberal constitutional order that is, after all, best defended against its foes—religiously motivated or not—by living up to the promise of equal freedom that is at the very heart of its appeal.

55

For additional commentary on the subject, see Mahlmann, Freedom and Faith—Foundation of Freedom of Religion, 30 CARDOZO L. REV. 2473 (2009); see generally FORST, TOLERANZ IM KONFLIKT (2003). 56

See the classical “parable of the ring” of Gotthold Ephraim Lessing, in NATHAN DER WEISE (NATHAN, THE WISE) (1779). 57

58

See MENDELSSOHN, JERUSALEM ODER ÜBER RELIGIÖSE MACHT UND JUDENTUM (1783).

At least this is what is plausible to conclude from Kant’s attack on the relevance of outward appearance in religious matters. See KANT, DIE RELIGION INNERHALB DER GRENZEN DER BLOSSEN VERNUNFT [RELIGION WITHIN THE LIMITS OF REASON ALONE] Akademie Ausgabe Vol. 6 (1902).

Special Section The Constitutional Court’s Headscarf Case One Court, Two Voices: Case Note on the First Senate’s Order on the Ban on Headscarves for Teachers from 27 January 2015: Case No. 1 BvR 471/10, 1 BvR 1181/10 By Johann Ruben Leiss

Abstract The First Senate of the German Constitutional Court held in its decision on 27 January 2015 on the ban of headscarves that a blanket ban on religious statements for teachers in public non-denominational schools—that does not require a sufficiently concrete threat to the peace at the schools or the state’s neutrality—is unconstitutional. The Court further nullified a discriminatory clause that privileged Christian-occidental educational and cultural values and traditions vis-à-vis other religions. By doing so, Karlsruhe made a strong plea in favor of understanding the German State’s neutral role in religious matters as one of openness and inclusion of a plurality of religions and worldviews, rather than that of a laizistic polity. It brought its jurisprudence in line with the United Nations Human Rights Committee’s approach in similar matters. Though, arguably, the case would have required a referral to the Joint Senate of the Constitutional Court, as it marks a deviation from the Second Senate’s decision from 2003, the findings of the Court on the substantive law are to be welcomed.

*

Johann Ruben Leiss, MLE, LL.M. (EUI), is a Ph.D. candidate at the Faculty of Law, University of Oslo. Email: [email protected].

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A. Introduction 1

In its landmark headscarf decision, the First Senate of the German Federal Constitutional Court (Bundesverfassungsgericht – BVerfG) held that a blanket ban on religious statements for teachers in non-denominational public schools—that does not require a sufficiently concrete threat to the peace at the schools (Schulfrieden) or the state’s neutrality—is unconstitutional. It further nullified a provision that privileged Christian-occidental educational and cultural values and traditions. By doing so, the Court made a strong plea in favor of understanding the German State’s neutral role in religious matters as one of openness and inclusion of a plurality of religions and worldviews, rather than that of a laizistic polity. This decision further, arguably, marks a considerable—though not open— change of direction in the jurisprudence of the Court, as the First Senate’s ruling 2 contradicts the decision of the Second Senate from 24 September 2003, which left it to the legislature to decide on bans of religious symbols and clothing in public schools. The decision, moreover, brings with it two interesting outcomes from the perspective of international human rights protection. Within the wide margin of appreciation that is granted by the European Court of Human Rights (ECtHR) towards member states in matters of religious symbols and clothing in public schools, the First Senate brings its jurisprudence into conformity with the rather restrictive approach of the United Nations Human Rights Committee (UNHRC). Further, the Senate made clear that the European 3 Convention on Human Rights (ECHR) is—through the prism of Article 31 of the Basic Law 4 (Grundgesetz - GG) and by virtue of the German law implementing the convention— directly part of the applicable law when reviewing Land legislation.

1

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 27, 2015, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10, http://www.bverfg.de/SharedDocs/Entscheidungen/DE/2015/01/rs20150127_1bvr047110.html; see also Press Release No. 14/2015, BUNDESVERFASSUNGSGERICHT, Ein Pauschales Kopftuchverbot für Lehrkräfte im Öffentlichen Schulen ist mit der Verfassung Nicht Vereinbar, Case No. 1 BvR 471/10, 1 BvR 1181/10 (Mar. 13, 2015), available at https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/DE/2015/bvg15-014.html. 2

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Sept. 24, 2003, Case. No. 2 BvR 1436/02, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2003/09/rs20030924_2bvr143602en. html. 3

Eur. Consult. Ass’n, Convention for the Protection of Human Rights and Fundamental Freedoms (opened for signature Nov. 4, 1950 and entered into force Sept. 3, 1953), ETS No. 5, 213 UNTS 222, amended by Protocol No. 14 (entered into force June 1, 2010), UNTS No. A 2889, available at http://conventions.coe.int/treaty/en/Treaties/Html/005.htm. 4

GRUNDGESETZ FÜR DIE BUNDESREPUBLIK DEUTSCHLAND [GG] [BASIC LAW] art. 31, translation at http://www.gesetze-iminternet.de/englisch_gg/.

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B. Facts of the Case The constitutional complaint concerned sanctions against the complainants due to their refusal to abstain from wearing a headscarf, or in the case of one complainant, a woolen hat as a substitute, when carrying out their duties as teachers in public non5 denominational schools. In 2006 the North Rhine-Westphalian legislature enacted Section 57(4) of the North Rhine6 Westphalian education act (Nordrhein-Westphälisches Schulgesetz). The first sentence prohibits teachers of non-denominational public schools from professing political, religious, or philosophical creeds that may pose a threat to the neutrality of the state vis-àvis pupils and parents or that may threaten the political, religious, or philosophical peace 7 at school. The second sentence stipulates that any conduct that may bring about the impression for pupils and parents that a teacher opposes human dignity, equality before 8 the law, constitutional rights, or free democratic order is particularly prohibited. However, pursuant to the third sentence of Section 57(4), the state’s educational mission enshrined in the North Rhine-Westphalian constitution and the corresponding presentation of Christian-occidental educational- and cultural values and traditions is not to be considered 9 a violation of the prohibition contained in the first sentence of Section 57(4). Both complainants are German citizens of Muslim faith that worked in non-denominational public schools in North Rhine-Westphalia. The first complainant followed the school authority’s order not to wear a headscarf in school and instead wore a hat and a polo-neck 10 sweater, leading the school authority to issue a warning to her. The second complainant was removed from office after she did not follow a warning that prohibited her from 11 wearing a headscarf in school. Their actions against the sanctions were dismissed by the 12 German labour courts. The constitutional complaints were directed against the sanctions and the decisions by the German labour courts, as well as—indirectly—against the underlying North Rhine-Westphalian legislation. Both complainants asserted inter alia 5

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 1–17.

6

SCHULGESETZ FÜR DAS LAND NORDRHEIN-WESTFALEN (SCHULG NW) p. 102 (Feb. 15, 2005) in der Fassung des ersten Gesetzes zur Änderung des Schulgesetzes 270 (Jun. 13, 2006). 7

Id.

8

Id.

9

Id.

10

For more on the factual and procedural background with regard to the first complainant, see BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 7–25. 11

See id. at paras. 26–37.

12

See id. at paras. 11–25, 30–37.

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violations of their rights under Article 4 in conjunction with Articles 12 and 33 of the Basic Law, Articles 3 and 33 of the Basic Law in conjunction with Articles 9 and 14 of the ECHR, as 13 well as Article 101 of the Basic Law. C. Summary of the Judgment The Court held, by a 6–2 majority, that the constitutional complaints were well-founded in substance. I. Restrictive Interpretation of Section 57(4) of the Education Act In the Court’s opinion, the first two sentences of Section 57(4) of the North RhineWestphalian Education Act are only constitutional if interpreted in conformity with the German constitution to the effect that a profession of religious belief has to pose a sufficiently concrete threat to the peace at the schools or the state’s neutrality; an abstract 14 threat was not deemed sufficient by the Court. Therefore, it declared the decisions of the German labor courts that did not apply such a restrictive constitutional interpretation unconstitutional. The Court began by ascertaining that the complainants’ wearing a headscarf reflecting their following of religious precepts fell under the scope of the freedom of faith and freedom to profess a religious or philosophical creed protected under Article 4(1) and (2) 15 of the Basic Law. The Court noted that the complainants had demonstrated with sufficient plausibility that their wearing of headscarves was religiously motivated, that different branches of Islam believe in such precepts, and that support for wearing 16 headscarves can arguably be found in two Surah in the Koran. According to the Court, the 17 interference with the complainant’s rights under Article 4 is of a severe nature. The intrusion into the complainants’ rights was, in the Court’s view, particularly severe due to the fact that the complainants did not merely invoke a religious recommendation but an 18 imperative precept. The restriction also touched upon the complainants’ personal identity—protected under Article 2(1) in conjunction with Article 1(1) of the Basic Law— and may pose an entrance barrier to the job market at schools (which constitutes an

13

See id. at paras. 39–55.

14

See id. at paras. 80–122.

15

See id. at paras. 83–89.

16

See id. at paras. 86–89.

17

See id. at paras. 90–96.

18

See id. at paras. 95–96.

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interference with Article 12 Basic Law), that may cause a negative de facto effect on the 19 women’s equality (which is protected by Article 3(2) Basic Law). The Court continued its reasoning by adjudging that the interference would be disproportional if one interprets Section 57(4) of the Education Act to the effect that an abstract threat to the peace at schools or to the state’s neutrality is sufficient for a 20 prohibition on professing religious belief. As the start of the proportionality analysis, the Court held that the North Rhine-Westphalian legislature pursues a legitimate aim: Namely the preservation of peace at schools, the state’s neutrality, the realization of the public educational mandate of the state, and the protection of the colliding basic rights of pupils 21 and their parents. Due to the general diffusion of headscarves in the public, the Court appeared skeptical as to whether a prohibition on the basis of abstract threats was 22 necessary in the first place. However, the Court left this question open, as it considered 23 the general prohibition on basis of abstract threats as disproportional stricto senso. It reasserted that—despite the legislature’s wide discretion in assessing the factual developments regarding the threats that religious professions of teachers may pose—the legislature must take into account the weight and relevance of religious freedom under 24 Article 4 of the Basic Law. In the view of the Court, wearing clothing with a religious connotation is not encroaching upon the negative religious freedom of pupils—that is, the freedom not to be exposed to symbols, rites, and cultic activities—as it does not give a right not to be confronted with 25 religious activities that are inherent in a pluralistic society. With regard to schools, an environment in which pupils are inevitably exposed to religious symbols, one has to differentiate between the individual exercise of religious freedom of teachers and acts of 26 religious manifestations that are attributed to the school. Individual professions by teachers only constitute an interference with the pupils’ negative freedom of religion if 27 they contain verbal promotion and attempted influence. Such displays do not per se 19

See id. at para. 96.

20

See id. at paras. 97–122.

21

See id. at para. 99.

22

See id. at para. 100.

23

See id. at paras. 100–07.

24

See id. at para. 102.

25

See id. at paras. 103–105f.

26

See id. at para. 104.

27

See id. at para. 105.

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implicate an identification of the state with one specific religion—in contrast to a crucifix in 28 classrooms. In general, the religiously-connoted appearance of one teacher will be offset 29 by the appearance of other teachers with different religions or world-views. Due to this balance of views, the Court saw non-denominational public schools as mirrors of a 30 religiously-pluralistic society. For these reasons, the Court concluded that there was no 31 violation of the parents’ rights under Article 6(2) of the Basic Law. The Court continued by holding that the educational mandate of the state under Article 7(1) of the Basic Law—which prescribes that the state shall carry out its educational mandate neutrally with regard to religion and world-views—only justifies a prohibition the of expression of religious or philosophical creeds if a sufficiently concrete threat to the 32 peace at school or the state’s neutrality exists. The Senate ascertained that the neutrality of the state is not to be understood as a strict division between state and religion, but rather as an open and all-embracing stance, which supports the plurality of world-views 33 equally. It is worthwhile to directly quote the 2003 decision—here in its English translation—reiterated by the Senate at this point: The free state of the Basic Law is characterised by openness towards the variety of ideological and religious convictions and bases this on an image of humanity that is marked by the dignity of humans and the free development of personality in self-determination and personal responsibility…[T]he religious and ideological neutrality required of the state is not to be understood as a distancing attitude in the sense of a strict separation of state and church, but as an open and comprehensive 34 one, encouraging freedom of faith equally for all beliefs. The Court emphasized that the very ideal of schools that bear the name “nondenominational” must be taken into account: It is the goal of these schools to impart on their pupils tolerance vis-à-vis other religions and world views, and their expression by 28

See id. at para. 112. On crucifixes in classrooms, see Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], May 16, 1995, Case No. 1 BvR 1087/91, para. 1, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%2093,%201. 29

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 105.

30

See id.

31

See id. at paras. 106–07.

32

See id. at paras. 108–22.

33

See id. at paras. 109–10.

34

See 108 BVerfGE 282 (paras. 42–43); see also BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 109– 10.

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wearing religiously-connoted clothes and symbols, such as—alongside headscarves—the 35 Jewish Kippa, the nun’s habit, and the Christian cross. Under exceptional circumstances—such as fundamental conflicts in a considerable number of cases—temporal bans may also be permitted on grounds of mere abstract threats. The Court underlined that this requires differentiated regulation that is so far not at hand and that school authorities are obliged to find other preferential solutions for affected teachers 36 (such as other working possibilities) than the sanctions in question. Against this background the Constitutional Court found that wearing a headscarf does not per se constitute a concrete threat to school peace and the state’s neutrality, as it does not 37 by its nature serve the purpose of promoting religion or have a missionary effect. II. Nullification of the Discriminatory Clause Contained in the Third Sentence of Section 57(4) of the Education Act The Court further declared the third sentence of Section 57(4) of the Education Act—which contains an exception for Christian-occidental educational and cultural values and traditions to the general ban of expression of religious creeds—void, as it violates the right against discrimination based on religion enshrined in Articles 3(3) and 33(3) of the Basic 38 Law. The Court denied the possibility of a restrictive interpretation of this provision in accordance with the constitution— such as that carried out by courts of lower instance— due to the discriminatory intent of the legislature that was clearly expressed in the 39 legislative process. The Court further clarified that there were no viable reasons to justify the unequal treatment of religions and held the argument that wearing a headscarf is 40 objectively a sign for support of the unequal treatment of men and women untenable. III. A Restrictive Interpretation of Section 57(4) of the Education Act is in Conformity with the ECHR The Court further found that the restrictive interpretation of Section 57(4) is in conformity 41 with the ECHR. The Court began its analysis of this argument by following up on its 35

See id. at para. 115.

36

See id. at paras. 113–15.

37

See id. at para.116.

38

See id. at paras. 123–38.

39

See id. at paras. 131–37.

40

See id. at paras. 128–30.

41

See id. at paras. 147–52.

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established jurisprudence on the relationship between the German Constitution and the Convention. Namely, the latter has the status of federal law (Bundesrecht) and is not, as such, to be applied by the Court as a “direct constitutional standard of review” but rather 42 constitutes a guide to interpretation that must be taken into account. Be that as it may, the Court maintained that the conventional law becomes a direct standard by virtue of the federal law implementing the Convention into the German legal system before the Constitutional Court when the constitutionality of the law of a Land (State) is to be 43 examined through the prism of the primacy rule under Article 31 of the Basic Law. When assessing a violation of conventional rights (Articles 9 and 14 of ECHR) through Article 31, the Court referred to the margin of appreciation granted by Strasbourg with regard to states’ neutrality in religious matters and concluded that there was no violation of the 44 convention. IV. No Violation of the German General Equal Treatment Act and No Decision on Violation of Article 101(1) Basic Law The Court also denied a violation of the German General Equal Treatment Act (Allgemeine Gleichbehandlungsgesetz) if a restrictive interpretation of Section 57(4) North Rhine45 Westphalian Education Act is applied. Finally, the Constitutional Court left open the question of whether the non-referral for a preliminary ruling to the Court of Justice of the European Union by the German Federal Labour Court constituted a violation of Article 46 101(1) of the Basic Law, due to the other violations of the Basic Law that were found.

42

See id. at para. 149. On the status of the convention within the German legal system, see Bundesverfassungsgericht [BVerfG]BVerfG [Federal Constitutional Court], Mar. 26, 1978, Case Nos. 2 BvR 589/79; 2 BvR 750/81; 2 BvR 284/85, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%2074,%20358 (on the presumption of innocence – Unschuldsvermutung); BVerfG, Feb. 26, 2008, Case Nos. 1 BvR 1602/07, 1 BvR 1606/07, & 1 BvR 1626/07, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%20120,%20180 (Caroline III). On the convention as a “guide to interpretation”, see the famous Görgülü decision, see BVerfG, Oct. 14, 2004, Case No. 2 BvR 1481/04, http://dejure.org/dienste/vernetzung/rechtsprechung?Text=BverfGE%20111,%20307; see Further e.g., Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], May 4, 2011, Case Nos. 2 BvR 2365/09, 2 BvR 740/10, 2 BvR 2333/08, 2 BvR 1152/10, & 2 BvR 571/10, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%20128,%20326 (Sicherungsverwahrung). 43

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 149.

44

See id. at paras. 151–52.

45

See id. at paras. 153–55.

46

See id. at para. 156.

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D. Dissenting Opinion by Justices Schluckebier and Hermanns 47

48

In their dissenting opinion, Justices Schluckebier and Hermanns argued that the majority was mistaken in holding that a restrictive interpretation of the first sentence of Section 57(4) North Rhine-Westphalian Education Act is constitutionally required and that 49 an abstract threat would be sufficient to trigger the prohibition on religious clothing. In their view, the majority vote does not attach enough value to the public educational mandate of the state, the parental right of childcare and education, and the negative 50 religious freedom of pupils. The majority’s appraisal does not meet reality when assuming that wearing religiously-connoted clothes does not interfere with the pupils’ negative freedom of faith, as well as with parental rights. It ignores the special relationship between teachers and pupils, to which the latter are unavoidably exposed to more 51 intensely than in other everyday life situations. In the dissenting justices’ opinion, the State’s neutrality necessarily encompasses the obligation that public officials be neutral in their public function, as the State cannot act as an anonymous entity independent of its 52 public officials. The dissenters further criticized that the Senate deviated from the 2003 Second Senate 53 judgment, which gave the legislature the discretion to regulate the wearing of religious 54 clothing on public non-denominational schools. This, they argued, is inconsistent with the 55 requirement of predictability. They contended that the majority of the Senate 47

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 27, 2015, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10, Appendix to the Order, http://www.bverfg.de/SharedDocs/Entscheidungen/DE/2015/01/rs20150127_1bvr047110.html (dissenting Opinion of Justice Wilhelm Schluckebier and Justice Monica Hermanns). 48

Justice Hermanns is a member of the Second Senate, not the first. She only happened to sit on the bench in this case due to the partiality of vice-president Ferdinand Kirchhof, who was involved in prior judicial proceedings on prohibitions of headscarves before German courts, as well as the drafting of legislation on a ban of headscarf in Baden-Württemberg. See BVerfG, Kopftuchverbot (Ban on Headscarves), Feb. 26, 2014, Case Nos. 1 BvR 471/10 & 1 BvR 1181/10, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2014/02/rs20140226_1bvr047110.ht ml. 49

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 2, 5–19.

50

See id. at paras. 2–19.

51

See id. at paras. 11–12.

52

See id. at para. 14.

53

See BVerfGE, Case. No. 2 BvR 1436/02.

54

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 2, 6–7.

55

See id. at para. 7.

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unacceptably interferes with the discretion of the Land legislature to regulate multi-polar 56 basic rights relations, which characterize non-denominational public schools. Furthermore, the dissenters advocated that the restrictive interpretation of the third sentence of Section 57(4) of the North Rhine-Westphalian Education Act that was applied 57 by courts of lower instance is to be upheld. Finally, Justices Schluckebier and Hermanns argued that the constitutional complaint concerning the wearing of a woolen hat and a turtleneck sweater is well-founded because these clothes do not on their own terms have 58 a religious connotation. E. Critique and Impact of the Decision on the Law I. On Substance The majority of the First Senate chose a feasible way to deal with the complex and politically sensitive questions concerning the relationship of the state concerning religions and worldviews in a pluralistic society. It is convincing to shift the focus of the constitutional analysis from the question of which behavior may constitute a threat to the neutrality of the state and school peace—an approach supported by Schluckebier and 59 Hermanns —to the question of the concrete impact assessment now imposed on the German authorities. Through this approach, the Court circumvents fruitless debates on the threshold of neutrality and the delimitation of when clothes and symbols overstep this threshold—such as the discussion on when a woollen hat would turn into a religious profession. Further, it is to be welcomed that the Court did not mingle the concept of state’s neutrality with laizism but followed up on its settled case law by reiterating that “[t]he free state of the Basic Law is characterised by openness towards the variety of ideological and religious convictions,” which is not to be understood as a “distancing 60 attitude in the sense of a strict separation of state and church.” By this the Court makes clear that the German Basic Law does not postulate secularism but rather embraces a neutrality of a state that is open and inclusive towards religions and worldviews of its 61 citizens. By drawing the line of state partisanship with respect to specific religions 56

See id. at paras. 2, 6.

57

See id. at paras. 3, 20–25.

58

See id. at para. 30.

59

See id. at para. 30.

60

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 109–10; BVerfGE, Case. No. 2 BvR 1436/02, paras. 42–43. 61

See also Hans Michael Heinig, Kurswechsel in der Kopftuchfrage: Nachvollziehbar, Aber mit Negativen Folgewirkungen (2015), available at http://www.verfassungsblog.de/kurswechsel-in-der-kopftuchfragenachvollziehbar-aber-mit-negativen-folgewirkungen/#.VdX5Iflv9SM (welcoming the Court’s reasoning).

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between behavior of teachers in their individual capacity and those acts that are clearly attributable to the state—such as crucifixes on the wall of classrooms— the Court found a balanced adjustment of the individual rights of teachers and the role of the state. This perspective strengthens the individual freedoms of teachers and provides relief to those 62 who are affected by irreconcilable inner moral conflicts. Further, such an understanding of the state’s roles in religious matters ensures that schools mirror the religiously pluralistic society, which the students must be prepared to enter. The nullification of the discriminatory clause contained in the third sentence of Section 63 57(4) of the Education Act is to be welcomed without restrictions. Contrary to what was 64 suggested by the Federal Labour Courts, some commentators’ —and the dissenting 65 Justices’ —blatant discrimination cannot be overcome by an interpretation in accordance 66 with the Constitution. An interpretation that stands in contrast to the wording of the provision, its systematic position, and the discriminatory intent that was openly revealed in the legislative process would go beyond acceptable interpretative means. II. On Two Voices Good arguments support the view that the order from 27 January 2015 marks a jurisprudential turnaround by the Court, as it constitutes a deviation from the Second 67 Senate’s judgment of 2003.

62

But see Necla Kelek, Gefährlicher Stoff, FAZ-NET, http://www.faz.net/aktuell/feuilleton/debatten/necla-kelekueber-das-kopftuchurteil-und-selbstbestimmung-13516184.html (expressing a critique of the decision). 63

See also Michael Wrase, Kopftuch Revisited - Karlsruhe ebnet Weg für Religiöse Vielfalt in der Schule (2015), http://www.juwiss.de/15-2015/; Christoph Möllers, A Tale of Two Courts (2015), http://www.verfassungsblog.de/a-tale-of-two-courts/#.VdX5bflv9SM. 64

See Heinig, supra note 61.

65

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at paras. 3, 20–25.

66

For the convincing arguments of the Court, see BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 131–37. 67

This point is discussed further on www.verfassungsblog.de. See Heinig, supra note 61; Von Tragenden Gründen und Abstrakter Gefahr, http://www.verfassungsblog.de/von-tragenden-gruenden-und-abstraktergefahr/#.VdX5lvlv9SM; Möllers, supra note 63; See also Christoph Möllers, Geht es Nicht um Verfassungsrecht? (2015), http://www.verfassungsblog.de/und-ich-dachte-es-waere-ein-verfassungsgericht/; Georg Neureither, Über Kopftücher, Segelanweisungen und das Pech, zur Falschen Zeit am Falschen Ort und vor dem Falschen Senat zu Sein (2015), http://www.verfassungsblog.de/ueber-kopftuecher-segelanweisungen-und-das-pech-zur-falschenzeit-am-falschen-ort-und-vor-dem-falschen-senat-zu-sein/#.VdX6Fflv9SM (arguing that in fact the First Senate’s order is a deviation from the 2003 decision). See also BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 7 (dissenting opinion).

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In its 2003 decision, the Second Senate left it to the discretion of the Länder legislatures to decide on bans of religious symbols and clothes for teachers when adjudicating the 68 constitutionality of the Baden-Wurttemberg legislation. It held that the neutrality of the state in religious matters and its openness to the plurality of religions allows for both a 69 prohibition as well as an allowance of religious symbols and clothes. Some commentators argue that the question of whether an abstract or concrete threat to school peace and the State’s neutrality is the threshold for the constitutionality of a prohibition on religious clothes and symbols was not dealt with by the Second Senate in its reasoning, as the judgment mainly concerned the requirement of a legal basis for the 70 prohibition. Also, the majority of the First Senate seems to have implicitly based its 71 reasoning on this line of argumentation. This view, however, is not convincing. Contrary to what is suggested, the reasoning of the Second Senate specifically addressed the requirement of a legal basis for abstract threats to the state’s neutrality and peace at 72 school. In view of this discrepancy between the judgments of both senates, it is argued that the First Senate was, pursuant to Section 16(1) of the Federal Constitutional Court Act 73 (Bundesverfassungsgerichtsgesetz – BVerfGG), obliged to refer the decision to the joint plenary of both Senates. Though the opinion that the 2015 judgment does not constitute a deviation from the 2003 ruling is difficult to defend, the non-referral must be viewed against the background of the general restrictive practice of both Senates when it comes to 74 references to the Joint Senate. 68

BVerfGE, Case. No. 2 BvR 1436/02.

69

See id. at paras. 64–66.

70

Cf. Michael Wrase, supra note 63; Mathias Hong, Two Tales of Two Courts: Zum Kopftuch-Beschluss und dem “Horror Pleni,” http://www.verfassungsblog.de/two-tales-of-two-courts-zum-kopftuch-beschluss-und-demhorror-pleni/#.VdX6O_lv9SM; Matthias Hong, Sicher, es Geht um Verfassungsrecht: zu Obiter Dicta und “Stare Decisis” (2015), http://www.verfassungsblog.de/sicher-es-geht-um-verfassungsrecht-zu-obiter-dicta-und-staredecisis/. 71

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 7 (dissenting opinion) (indicating that the majority based its non-referral on such a reasoning). 72

See BVerfGE, Case. No. 2 BvR 1436/02 at para. 49. See Heinig, Kurswechsel in der Kopftuchfrage, supra note 61 (acknowledging a certain ambivalence with regard to the reasoning of the Second Senate on this point). 73

Bundesverfassungsgerichtsgesetz in der Fassung der Bekanntmachung, Aug. 11, 1993, BGBL. I at 1473; Article 1 des Gesetzes, Aug. 29, 2013 BGBL. I at 3463. section 16(1) (stating “[w]ill ein Senat in einer Rechtsfrage von der in einer Entscheidung des anderen Senats enthaltenen Rechtsauffassung abweichen, so entscheidet darüber das Plenum des Bundeverfassungsgerichtes.”). 74

To date only five cases have been referred to the joint senate. See. Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], July 20, 1954, Case No. 1 PBvU 1/54, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%204,%2027; BVerfG, June 11, 1980, Case

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III. On Consequences Furthermore, this decision will have far-reaching consequences for other Länder legislation on the prohibition of religious symbols and clothing. Aside from North Rhine-Westphalia, seven other German Länder have enacted bans on religious symbols and clothing worn by 75 teachers. Five of these laws also include a provision similar to the third sentence of Section 57(4) of the North Rhine-Westphalian Education Act, which privileges Christian76 occidental educational and cultural values and traditions. Although the present decision only has—directly—binding effect with regard to North Rhine-Westphalian law, the ball is now in the court of the other Länder that have similar laws to adjust their legislation to the constitutional requirements in order to avoid follow-up proceedings against their 77 legislation in Karlsruhe. Despite the uncertainty due to the divergent decisions of 2003 78 and 2015 for the legislatures with regard to the requirement of concrete threats —which should not be overestimated as another turnaround by Karlsruhe seems to be rather unlikely—the decision of the First Senate, at least, provides for clear guidance when it comes to the unconstitutionality of the discriminatory clause. IV. On the International Perspective The Court’s view that a restrictive interpretation of Section 57(4) of the Education Act is in conformity with the ECHR is to be concurred in light of the wide margin of appreciation 79 that is granted by the ECtHR to the Member States of the Convention. Arguably, even a No. 1 PBvU 1/79, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%2054,%20277; BVerfG, Apr. 8, 1997, Case No. 1 PBvU 1/95, http://dejure.org/dienste/vernetzung/rechtsprechung?Text=BverfGE%2095,%20322; BVerfG, Apr. 30, 2003, Case No. 1 PBvU 1/02, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGE%20107%2C%20395&Suche=BVerfGE%201 07%2C%20395; BVerfG, July 3, Case No. 2 PBvU 1/11, http://dejure.org/dienste/vernetzung/rechtsprechung?Text=2%20PBvU%201%2F11&Suche=2%20PBvU%201%2F 11. 75

See the overview of the laws on the University of Trier’s homepage at http://www.unitrier.de/index.php?id=24373#c48119. Among these states are: Baden-Wurttemberg Bavaria, Berlin, Bremen, Hesse, Lower-Saxony, and Saarland. 76

Among these are Baden-Wurttemberg, Bavaria, Hesse and Saarland.

77

On the effect of the decision for other Länder and the uprising political resistance in the Bavarian Government, see Helmut Philipp Aust, Bayern auf dem Sonderweg? Nachwirkungen der Kopftuch-Entscheidung des BVerfG (2015), available at http://www.verfassungsblog.de/bayern-auf-dem-sonderweg-nachwirkungen-der-kopftuchentscheidung-des-bverfg/. 78

79

See Heinig, Kurswechsel in der Kopftuchfrage, supra note 61.

See Dahlab v. Switzerland, App. No. 42393/98 (Feb. 15, 2001), http://hudoc.echr.coe.int/eng?i=00122643#{%22itemid%22:[%22001-22643%22]}; Sahin v. Turkey, App. No. 44774/98 (Nov. 10, 2005), http://hudoc.echr.coe.int/eng?i=001-70956#{%22itemid%22:[%22001-70956%22]}; Kurtulmus v. Turkey, App. No.

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prohibition of mere abstract threats to the neutrality of the state and peace at schools as a prerequisite for non-discriminatory bans of religious symbols in schools would have been 80 in conformity with the convention. Although there is no discussion in the decision of the First Senate on the views adopted by the United Nations Human Rights Committee (UNHRC) on religious freedom in public schools, the order is also in accordance with the— in comparison with the ECtHR’s approach on the ECHR—more restrictive approach of the 81 Committee when it comes to interferences with religious freedom under the 82 International Covenant on Civil and Political Rights. In a view that was adopted by the UNHRC, which dealt with an expulsion of a pupil of Sikh faith from a public school in France 83 who refused to abstain from wearing the keski, the Committee also found that there must be compelling evidence that the author of the communication (the “complainant”) would himself have posed a concrete threat to the rights of others—a burden the 84 authorities did not meet within that case. Thus, the decision is to be welcomed from an international human rights perspective, as it brings the courts’ jurisprudence in line with the jurisprudence of the UNHRC. Another interesting aspect of the decision that is worth mentioning concerns the relationship between the German constitutional system and the ECHR. The Constitutional Court directly examines violations of conventional rights when reviewing decisions of the Landesrecht through the lens of Article 31 of the Basic Law, according to which federal legislation takes precedence over Land law. This is due to the fact that the conventional law has, by virtue of its implementation into the German legal system, the status of 85 German federal law. From this it follows, quite remarkably, that every international 65500/01 (Jan. 24, 2006), http://hudoc.echr.coe.int/eng?i=002-3518#{%22itemid%22:[%22002-3518%22]}. On the limits of the margin of appreciation, see Eweida and Others v. United Kingdom, App. Nos. 48420/10, 59842/10 and 36516/10 (Jan. 15, 2013), http://hudoc.echr.coe.int/eng?i=001-115881#{%22itemid%22:[%22001115881%22]}. 80

This is also assumed by Justices Schluckebier and Hermanns in their dissenting opinion. See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 8 (dissenting opinion) 81

See, e.g., Bikramjit Singh v. France, U.N. Doc. CCPR/C/106/D/1852/2008 IHRL 1852 (UNHRC 2008), http://daccess-dds-ny.un.org/doc/UNDOC/GEN/G13/407/94/PDF/G1340794.pdf?OpenElement. 82

International Covenant on Civil and Political Rights, U.N. G.A. Res. 2200A (XXI), 21 U.N. GOAR Supp. (No. 16), 52 U.N. Doc. A/6316 (1966) (entered into force Mar. 23, 1976), 999 UNTS 171 (ICCPR), https://treaties.un.org/pages/viewdetails.aspx?chapter=4&src=treaty&mtdsg_no=iv-4&lang=en. 83

A keski is—as explained in the view of the UNHRC—a “small light piece of material of a dark colour, often used as a mini-turban, covering the long uncut hair considered sacred in the Sikh religion,” Singh at para. 2.3. 84

85

Id. at para. 8.7.

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 149; see also Kammerentscheidungen des Bundesverfassungsgericht [BVerfGK] [Decisions of the Chambers of the German Federal Constitutional Court], Feb. 1, 2007, Case No. 2 BvR 126/04, https://dejure.org/dienste/vernetzung/rechtsprechung?Text=BVerfGK%2010,%20234.

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agreement that has been transformed by enactment of a formal statute under Article 59(2) of the Basic Law into the German System becomes through Article 31 of the Basic Law part of the constitutional judicial review of law of the Länder. F. General Conclusion With regard to the substance of the law, the First Senate’s order is to be welcomed, as it defines the role of the state as inclusive when it comes to the worldviews of its citizens— including those citizens that are employed by the state—while at the same time underlines the obligation of those working in the public sector to process their religious creeds as a private matter. As Justices Schluckebier and Hermanns rightly point out, the State cannot 86 act independently of its public officials as an anonymous entity. Regardless—and contrary to their conclusion—is the fact that unavoidable tension between the individual personality of teachers and their functions as state officials cannot be resolved at the expense of teachers alone. A plenary decision of both Senates, arguably, would have been preferable from the viewpoint of legal predictability for the legislature and those who are affected, but also as a venue to avoid future friction within the Court. Be that as it may, whether a plenary decision would have brought about the welcomed change of jurisprudence remains doubtful.

86

See BVerfG, Case Nos. 1 BvR R 471/10 & 1 BvR 1181/10 at para. 14 (dissenting opinion).

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Special Section The CJEU’s OMT Decision The Protection of National Constitutional Identity and the Limits of European Integration at the Occasion of the Gauweiler Case By Monica Claes & Jan-Herman Reestman

Abstract This contribution revisits the Bundesverfassungsgericht’s order for reference in the Gauweiler case and focuses on two aspects of that order that until now have not received much scholarly attention. The first concerns the German federal constitutional court’s dissociation of constitutional identity review under the German Basic Law from national identity review under Article 4(2) TEU. While the decision on the Lisbon Treaty had suggested that the two go “hand in hand”, the Bundesverfassungsgericht now emphasizes the “fundamental” difference between the concept of national identity under Article 4(2) TEU on the one hand and the German concept of constitutional identity on the other. The second element is the German federal constitutional court’s contention that its approach to ultra vires and constitutional identity review can also be found in the constitutional law of many other member states. Yet, careful analysis demonstrates that while there does indeed seem to be a trend in that direction, and several elements of the German approach can also be found in other countries, very few national courts are as adamant as the Bundesverfassungsgericht, and only a handful have developed their position with the same level of detail and ardor.



Monica Claes is Professor of European and Comparative Constitutional Law at Maastricht University. JanHerman Reestman is Associate Professor of Constitutional Law at the University of Amsterdam. This paper was written with the financial support of the ECB. However, the views expressed are solely ours and not those of the ECB or the Eurosystem.

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A. Introduction In its Gauweiler reference for a preliminary ruling, the Bundesverfassungsgericht (German Federal Constitutional Court) seemed to dare the Court of Justice of European Union. Even if the ECJ would consider the OMT decision valid under EU law, this would leave unaffected the power of the Bundesverfassungsgericht to review whether it was ultra vires and/or violated Germany’s constitutional identity under the German Basic Law. Both courts finally seemed to be on collision course, as had been time and again predicted since Solange, Maastricht and Honeywell. Each time, the court was all barks and no bite, or to put it differently — the courts chose to avert the conflict. In its decision in Gauweiler the ECJ chose not to pick up the gauntlet thrown by the Bundesverfassungsgericht. In a sober decision, the ECJ resisted the temptation to restate its classic claims regarding the autonomy and the primacy of EU law, and its exclusive jurisdiction to rule on the validity of EU law. Instead, the ECJ relied almost entirely on the force of its substantive arguments that the OMT decision of the European Central Bank falls within the Bank’s mandate and is not ultra vires. It only permitted itself to remark, almost in passing, that it is settled case-law of the Court that a judgment in which it gives a preliminary ruling is binding on the national court, as regards the interpretation or the validity of the acts of the EU institutions in question, for the purposes of the decision to be given in the main 1 proceedings. The ball is now clearly in the Bundesverfassungsgericht’s court. In this contribution we will not focus on the merits of the ECJ’s decision in Gauweiler. 2 Instead, we revisit the Bundesverfassungsgericht’s order for reference in the case and focus on two aspects of the order that until now have not received much scholarly attention. The first concerns the German federal constitutional court’s dissociation of constitutional identity review under the German Basic Law from national identity review under Article 4(2) TEU. While the decision on the Lisbon Treaty had suggested that the two go “hand in hand”, the Bundesverfassungsgericht now goes out of its way to emphasize the “fundamental” difference between the concept of national identity under Article 4(2) TEU on the one hand, and the German concept of constitutional identity on the other.

1

Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag, para. 16 (June 16, 2015), http://curia.europa.eu/. 2

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, 2 BvR 2728/13, https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2014/01/rs20140114_2bvr272813.h tml.

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The second element is the German federal constitutional court’s contention that its approach to ultra vires and constitutional identity review can also be found in the constitutional law of many other member states. While admitting that variations exist concerning the absolute or qualified nature of these constitutional obstacles, it made reference to the constitutional case law of ten other member states — Denmark, Estonia, 3 France, Ireland, Italy, Latvia, Poland, Sweden, Spain and the Czech Republic — suggesting that there is a common approach to the issue. Yet, careful analysis demonstrates that while there does indeed seem to be a trend in that direction, and several elements of the German approach can also be found in other countries, very few national courts are as adamant as the Bundesverfassungsgericht, and only a handful have developed their position with the same level of detail and ardor. The structure of this article is as follows. As we set out to compare the position of the Bundesverfassungsgericht on ultra vires and constitutional identity review with that of the ECJ on the identity clause in Article 4(2) TEU and with the jurisprudence of other national (constitutional or highest) courts, the relevant case law of Bundesverfassungsgericht will first be sketched, as point of comparison (section II). We then compare the German concept of Verfassungsidentität with the EU concept of national identity as set out in Article 4(2) TEU and as interpreted by the ECJ (section III). In section IV, we test the claim of the Bundesverfassungsgericht that its approach to the protection of German constitutional identity and of the limits of the transfer of sovereign powers to the European Union “can also be found, with modifications depending on the existence or non-existence of unamendable elements in the respective national constitutions, in the constitutional law of many other Member States of the European Union”. With conclude with an appreciation of the ECJ’s decision not to take up the gauntlet in Gauweiler. B. German Constitutional Identity I. The Emergence of the Notion While the ECJ in its judgment in the Gauweiler case is almost completely silent on the Bundesverfassungsgericht’s claim to have the right and even the duty to submit EU acts to ultra vires and constitutional identity review, Advocate-General Cruz Villalón did not miss the opportunity to react to it. He noted that the common constitutional traditions of the member states are also foundational for the EU legal order and suggested that …The Union has thus acquired the character, not just of a community governed by the rule of law, but also of 3

For Sweden, the reference is not to the constitutional case law, but to the Constitution itself. Indeed, the constitutional provision referred to (Article 6 of Chapter 10 of the Swedish Instrument of Government) is new and has not yet given rise to constitutional case law, which is not surprising given the Swedish tradition of not having these issues decided by the courts.

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a ‘community imbued with a constitutional culture. That common constitutional culture can be seen as part of the common identity of the Union, with the important consequence, to my mind, that the constitutional identity of each Member State, which of course is specific to the extent necessary, cannot be regarded, to state matters cautiously, as light years away from that common constitutional culture. Rather, a clearly understood, open, attitude to EU law should in the medium and long term give rise, as a principle, to basic convergence between the constitutional identity of the Union and that of each of the member 5 states.

The passage reveals that the AG reasoned on the basis of a notion of “constitutional identity” which is not that of the Bundesverfassungsgericht. Key to understanding the German concept of “Verfassungsidentität” or “identität der Verfassung” (constitutional identity or identity of the constitution) is the distinction which is best known in French terms between the “pouvoir constituant originaire” (original constituent power) and the “pouvoir constituant dérivé” (or institué; derived – or constituted – constituent power). 6 The Bundesverfassungsgericht reads this distinction, as positive law into the German Basic 7 Law. The original constituent power, the “verfassungsgebenden Gewalt”, which exists 4

With a touch of malignance the AG here makes reference to Andreas Vosskuhle, DER EUROPÄISCHE VERFASSUNGSGERICHTSVERBUND 22 (TranState Working Papers No.16, Staatlichkeit im Wandel – Transformations of the State, Bremen, 2009) (citing Peter Häberle & Markus Kotzur, EUROPÄISCHE VERFASSUNGSLEHRE 478 (6th ed. 2009)). 5

Opinion of Advocate General Cruz Villalón at para. 61,Case C-62/14, Gauweiler and Others v. Deutscher Bundestag (Jan. 14, 2015), http://curia.europa.eu/juris/document/document.jsf?text=&docid=161370&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=. 6

The distinction goes back to the French revolution and has its roots in the Middle-Ages. See Martin Loughlin, The Concept of Constituent Power, 13 EUR. J. POL. THEORY 218, 221 (2014). In 1789, Emmanuel Josef Siéyès presented the distinction between “pouvoir constituant” and “pouvoirs constitués” in his famous QU’EST CE QUE LE TIERS ETAT?; in his thinking, the distinction encompassed that between “pouvoir constituant originaire” and “pouvoir constituant institué,” see Alain Laquièze, La reception de Sieyès par la doctrine publicitiste française du XIXème et du XXème siècles, 6 HISTORIA CONSTITUCIONAL (REVISTA ELECTRONICA) 229, 256 (2005). The distinction is an offshoot of social contract theories; Jürgen Habermas, Zur Prinzipienkonkurrenz von Bürgergleichheit und Staatengleichheit im supranationalen Gemeinwesen. Eine Notiz aus Anlass der Frage nach der Legitimität der ungleichen Repräsentation der Bürger im Europäischen Parlament, 53 DER STAAT 167, 180–81(2014). 7

On the reception of the distinction in German scholarship and case-law, see for instance Ingolf Pernice, Carl Schmitt, Rudolf Smend und die europäische Integration, 120 ARCHIV DES ÖFFENTLICHEN RECHTS (AÖR) 100 (1995); KARLHEINZ RODE, VERFASSUNGSIDENTITÄT UND EWIGKEITSGARANTIE. ANMERKUNGEN ZU EINEM MYTHOS DER DEUTSCHEN STAATSRECHTSLEHRE (2012).

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prior to the constitution, is the author of the constitution, the constitution-making power. The German people (“Deutsche Volk”) are designated as such in the preamble of the 8 German constitution. The derived constituent power is the power that is endowed by the constitution to amend it. This is the parliamentary constitutional legislature, the “verfassungsändernden Gesetzgeber”, the Bundestag and the Bundesrat acting together with a qualified majority of two thirds of the votes (Article 79 (2)GG). This leads to a second distinction between amending the constitution on the one hand and changing the basic framework or the fundamental principles of the constitution on the other. The competence of the parliamentary constitutional legislature to amend the constitution is limited and cannot infringe or change the core of the fundamental constitutional principles, the Verfassungsidentität. This would amount to enacting a new constitution, 9 which is the exclusive prerogative of the original constituent power, the people. On the most fundamental level, the protection of Germany’s constitutional identity amounts to the protection of the constituent power of the German people and everything that it 10 entails in terms of self-determination, sovereignty and statehood. The fundamental principles which the parliamentary constitutional legislature has to respect are those declared unamendable by the “Ewigkeitsklausel” (eternity clause) of Article 79(3) GG: the principles of human dignity and fundamental rights protection, 11 democracy, rule of law, the social state and the federal state. The Bundesverfassungsgericht requires respect for these principles not only in case of amendment of the German constitution, but also when competences are transferred to the EU: The identity of the (German) constitution is “unübertragbar” and 12 “integrationsfest”. The consequence is that until the German people as the original holder of sovereignty decides otherwise, Germany may not become part of a federal European state and must remain a democratic, rule of law based, fundamental rights 13 protecting, social and federal state in its own right.

8

“(V)on dem Willen beseelt, als gleichberechtigtes Glied in einem vereinten Europa dem Frieden der Welt zu dienen, hat sich das deutsche Volk kraft seiner verfassungsgebenden Gewalt dieses Grundgesetz gegeben.” See also Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], June 20, 2009, Case No. 2 BvE 2/08, para. 216, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2009/06/es20090630_2bve000208en .html. 9

BVerfG, Case No. 2 BvE 2/08 at paras. 217–18.

10

Perhaps even the pouvoir constituant originaire is bound by the principles of human dignity, freedom and equality, due to their “universal nature.” BVerfG, Case No. 2 BvE 2/08 at para. 217. 11

Id.

12

Id. at para. 235.

13

Id. at para. 216. The interpretation that Germany’s current constitutional settlement prohibits Germany to abandon its sovereign statehood is disputed, inter alia on the basis of the statement in the German constitution’s

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The use of the concept constitutional identity by the German court can be traced back to 14 one of its earliest decisions in 1951. It was first developed in the context of EU integration in the famous 1974 Solange I-judgment. At that time the concept was mainly used to denounce rule of law and democratic deficiencies in the EU and to promote the “strukturelle Kongruenz” (structural equivalence) between the EU and the German state. Constitutional identity presented a limit to the constitutional changes that a transfer of 15 powers on the basis of Article 24 of the Basic Law permitted. Fundamental rights formed part of that immutable constitutional identity. As a consequence, as long as the EU had no adequate fundamental rights protection, the Bundesverfassungsgericht would review the compatibility of secondary EU law with German fundamental rights. Both branches of the case-law were codified in 1992, at the occasion of the approval of the Treaty of Maastricht, in Article 23(1) GG. The first sentence of that section, the so called “struktursicherungsklausel,” requires that the EU is built on the same principles as the German state; the third sentence states that Article 79(3) needs to be respected when establishing the EU or changing its foundations substantively affects the German Basic Law. Although the term “constitutional identity” was absent from the Maastricht-Urteil, the 16 underlying idea was implied. What was missing in Maastricht when compared to Lisbon was the notion of constitutional identity review, as the focus then was completely on ultra vires review. In the Lissabon-Urteil the notion of constitutional identity took center stage, mostly as a limit to further integration and a standard for review of secondary EU law. As such it has subsequently been further developed, especially in the field of the Economic and Monetary Union, with the decisions on the Greece and Euro rescue packages and on 17 the ESM-Treaty and the Fiscal Compact. preamble that the German people wants to promote world peace as an “equal partner in a united Europe,” see Pernice, supra note 7, at 116. 14

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Oct. 23, 1951, 1 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 14, 32, 50; see also Bundesverfassungsgericht [BVerfG][Federal Constitutional Court], 30 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 1, 24–25. 15

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], May 29 1974, 37 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 271, 279 [hereinafter Solange I]; Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Oct. 22, 1986, 73 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 339, 375–76 [hereinafter Solange II]. 16

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Feb. 7, 1992, 89 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 155, 171–72, 181 [hereinafter Maastricht Decision]. 17

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Sept. 7, 2011, Case No. 2 BvR 987/10, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2011/09/rs20110907_2bvr098710en. html; Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Sept. 12, 2012, Case No. 2 BvR 1390/12, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2012/09/rs20120912_2bvr139012en. html. On the development of the concept in the BVerfG’s case-law, see Christian Tomuschat, The Defence of National Identity by the German Constitutional Court, in NATIONAL CONSTITUTIONAL IDENTITY AND EUROPEAN INTEGRATION

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18

It should be noted that the case-law on constitutional identity is not, and is not meant to 19 be, an academic treatise. The judgments give only a fragmented picture of that identity: Here and there some elements of it lighten up, but much remains in the dark. Only in rare instances does the Bundesverfassungsgericht define specific ‘integration proof’ elements of German constitutional identity. The court’s reasoning is shaped by the arguments put forward by the complainants, the instruments under review and the context in which the decision is made. So far, no instrument has been found to violate German constitutional identity. Undoubtedly, the court deliberately avoids getting too specific when it comes to future consequences of its case-law, probably in order to have a free hand in later cases. Discussing the scope and implications of German constitutional identity therefore is and remains a delicate matter. Even in the area of the economic monetary union, where the case-law is the most elaborate, it remains hard to predict where the limits to further integration really lie. In general, respect for German constitutional identity requires that Germany remains a sovereign state under international law and a viable and independent political 20 community. 1. A Sovereign State Under International Law German constitutional identity demands first of all that Germany remains a sovereign state 21 under international law. The required continued existence of Germany’ sovereign statehood implies deference for each of the three defining elements of a state — territory, 22 people and the authority exercised upon these. Respect for German state territory and people for instance requires that the EU only exercises authority in Germany on the basis 205 (Alejandro Saiz Arnaiz & Carina Alcoberro Llivina eds., 2013); Franz Mayer, L’identité constitutionelle dans la jurisprudence constitutionnelle allemande, in L’ IDENTITÉ CONSTITUTIONNELLE SAISIE PAR LES JUGES EN EUROPE 62 (Laurence Burgorgue-Larsen ed., 2011). 18

See also Hèctor López Bofill, What is not Constitutional Pluralism in the EU: National Constitutional Identity in the German Lisbon Judgment, in NATIONAL CONSTITUTIONAL IDENTITY AND EUROPEAN INTEGRATION 221, 230–37 (Alejandro Saiz Arnaiz & Carina Alcoberro Llivina eds., 2013); Stefan Theil, What Red Lines, If Any, Do the Lisbon Judgments of European Constitutional Courts Draw for Future EU Integration?, 15 GERMAN L.J. 600 (2014). 19

Jacques Ziller, The German Constitutional Court’s Friendliness towards European Law, 16 EUR. PUB. L. 53, 69–70 (2010). 20

López Bofill, supra note 18, at 221.

21

BVerfG, Case No. 2 BvE 2/08 at para. 216.

22

Id. at para. 298.

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of the German act of approval of the EU treaties — and thus not on the basis of the 23 autonomous legal order of the EU itself. It also requires that the German “state people” is not dissolved into a “European people” with its own right of self-determination, which implies for instance that EU citizenship has to remain a status derived from member state 24 nationality. The consequences of the third criterion, authority, are manifold. It requires that Germany 25 has the right to withdraw from the EU; that Germany and the other member states 26 remain the “Master(s) of the Treaties”; that the competences of the EU have to be 27 governed by the principle of conferred powers; that the EU may not be given the 28 Kompetenz-Kompetenz; that the primacy of EU law in Germany is based on the national constitution, limited to intra vires acts and those which respect German constitutional 29 identity; and that the Bundesverfassungsgericht must able to perform an ultra vires and 30 an identity review of secondary EU law. The Bundesverfassungsgericht’s competence to exercise fundamental rights review of secondary EU law is also an effect of the third criterion, even if it is currently no longer 31 exercised — as stated in Solange II and Bananas and reaffirmed in Lisbon. Nevertheless, some of the “integration proof” particles of German constitutional identity which the court has identified in Lisbon and subsequent case-law concern fundamental rights. This begs the question of what the relationship is between the Solange II/Bananas case law on the one 32 hand, and constitutional identity review à la Lisbon on the other, as the latter apparently 33 can equally lead to fundamental rights review. 23

Id. at paras. 240, 344–45.

24

Id. at paras. 298, 346–50.

25

Id. at paras. 329–30.

26

Id. at paras. 231, 298.

27

Id. at paras. 233–34, 300–03.

28

Id. at paras. 233, 322–28.

29

Id. at paras. 331–40.

30

Id. at paras. 240–41, 33–40.

31

Id. at paras. 331 337.

32

Solange II at 339; Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], June 7, 2000,Case No. 2 BvL 1/97, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2000/06/ls20000607_2bvl000197en. html [hereinafter Bananas]. 33

See Daniel Thym, Europäische Integration im Schatten Souveräner Staatlichkeit. Anmerkungen zum LissabonUrteil des Bundesverfassungsgerichts, 48 DER STAAT 559, 569 (2009) (including note 48); see also Hans-Georg

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2. A Viable and Independent Political Community. In addition to the preservation of German statehood, German constitutional identity demands that Germany remains a viable and independent political community. Here the democracy principle takes center stage. In order to prevent interference with the inviolable core of the right of German citizens to elect the Bundestag (Article 38 GG) and to legitimate and influence the exercise of public authority, transfers of competences to the EU must remain limited: The Bundestag needs to retain substantial budgetary and legislative competences of its own in order for Germany to be able to “democratically 34 shape itself”. In the Lisbon judgment, the Bundesverfassungsgericht identified five areas of competences which are “(p)articularly sensitive” in this respect. These areas of competences relate to substantive and formal criminal law, the use of force within Germany and the employment of the German military forces abroad, the budget, social policy, and “decisions which are of particular importance culturally, for instance as regards 35 family law, the school and education system and dealing with religious communities”. This part of the case law is tainted by a fundamental ambiguity. On the one hand the required respect for Germany’s sovereignty does not seem to imply that certain legislative competences are excluded from transfer to the EU from the outset: Even competences 36 which belong to the nucleus of stately competences can in principle be transferred. Moreover, the court suggests that if the EU actually becomes more democratic, especially by the development of a “europäische Öffentlichkeit” (European public space), more competences may be transferred, and the need for a restrictive interpretation of 37 competences already transferred diminishes. To this extent, the democracy principle sets limits to the transfer of competences to the EU which are not absolute and which do not 38 ensue from German constitutional identity.

Dederer, Die Grenzen des Vorrangs des Unionsrecht – Zur Vereinheitlichung von Grundrechts-, Ultra-vires- und Identitätskontrolle, 69 JURISTENZEITUNG (JZ) 313, 317 (2014), (opining that the BVerfG should abandon Solange II and should return to “zur einzelfallbezogenen Grundrechtskontrolle” because fundamental rights review is only a specific expression of identity review, which itself is “einzelfallbezogen”). 34

Maastricht Decision at 172, 186; BVerfG, Case No. 2 BvE 2/08 at paras. 175, 249, 252.

35

BVerfG, Case No. 2 BvE 2/08 at para. 252.

36

Id. at para. 248.

37

Id. at paras. 251, 261, 262, 266.

38

Id. at para. 247. Dieter Grimm, Das Grundgesetz als Riegel vor einer Verstaatlichung der Europäischen Union. Zum Lissabon-Urteil des Bundesverfassungsgerichts, 48 DER STAAT 475, 490 (2009) (pointing out that the BVerfG has not attached legal effects to violations of the democracy principle which are not simultaneously also violations of German constitutional identity).

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On the other hand, the Bundesverfassungsgericht emphasizes that Germany must retain “sufficient space (…) for the political formation of the economic, cultural and social living 39 conditions”. This condition is fulfilled if the Bundestag in the relevant fields has “responsibilities and competences of substantial political importance” of its own, or if the German government, under the political control of the Bundestag, is “in a position to exert 40 a decisive influence on European decision-making procedures”. Article 79(3) GG would be violated “if the extent of competences, the political freedom of action and the degree of independent opinion-formation on the part of the institutions of the Union reached a level corresponding to the federal level in a federal state.” This would be the case if for example “the legislative competences, essential for democratic self-determination, were exercised 41 mainly at Union level.” To the extent that the German political institutions should retain substantial legislative and political power of their own, the five areas of competences are linked to German constitutional identity; in this perspective the areas of competences do refer to the need of what has been called a “democratic reserve competence” for 42 Germany. In general it is impossible to state where within these five areas German constitutional identity begins and where it ends: As we have seen, much depends on the volume of competences transferred, the way they are exercised on the EU level and the democratic state of the Union. Therefore, this part of the jurisprudence provides a very flexible — and 43 slippery — standard: it does not refer to “a catalogue of non-transferrable powers”, as 44 one of the court’s brethren thought, but to competences which are constitutional 45 identity prone. At the same time the court here and there positively identifies specific elements of German constitutional identity which are integration proof. For instance, the principle that the deployment of the German armed forces is not permissible without 46 approval of the Bundestag is “integrationsfest”, as is the nullum crimen sine culpa 39

BVerfG, Case No. 2 BvE 2/08 at para. 249; cf. Maastricht Decision at 186 (“Aus alledem folgt, daß dem Deutschen Bundestag Aufgaben und Befugnisse von substantiellem Gewicht verbleiben müssen.). 40

BVerfG, Case No. 2 BvE 2/08 at para. 246. The statement concerning the German government only adds to the confusion. It makes one wonder whether all legislative competences may be transferred as long the EU Council of Ministers decides unanimously. 41

BVerfG, Case No. 2 BvE 2/08 at para. 264 (emphasis added); see also id. at para. 175.

42

Thym, supra note 33, at 569. See also Maastricht Decision at 181.

43

Christoph Ohler, Herrschaft, Legitimation und Recht in der Europäische Union – Anmerkungen zum Lisbon-Urteil des BVerfG, 135 AÖR 153, 175 (2010). 44

Ústavni Soud České republiky (Czech constitutional court), judgment of 3 November 2009 - Pl. ÚS 29/09: Treaty of Lisbon II, para. 110-111; see also Jo Eric Khushal Murkens, Identity trumps Integration. The Lisbon Treaty in the German Federal Constitutional Court, 48 DER STAAT 517, 521 (2009); supra Theil, supra note 18, at 60–10. 45

Grimm, supra note 38, at 490–91.

46

BVerfG, Case No. 2 BvE 2/08 at para. 255; for the exception to this rule, see id. at para. 383.

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47

principle and the principle that the “citizens’ enjoyment of freedom may not be totally 48 recorded and registered”. The right of the Bundestag to decide freely on the German budget is to large extent also an 49 integration proof element of German constitutional identity. Due to the euro crisis, the measures adopted to combat it and the complaints filed against these measures, this limb of the case-law, to which we now turn, is the most developed. As we will see, the Gauweiler reference is a direct off-spring of this case-law. 3. Budgetary Powers as Elements of German Constitutional Identity. The Bundestag cannot abandon its “haushaltpolitische Gesammtverantwortung”, its overall budgetary responsibility, and must remain “Herr seiner Entschlüsse”, master of its own decisions, when it comes to the German budget. A transfer of the right to adopt the budget and to control its implementation by the government would violate the principle of 50 democracy and the right to elect the German Bundestag in its essential content. Therefore, the determination of the type and amount of the taxes cannot be supranationalized, at least not to a considerable extent, and the Bundestag must be able to decide freely, or to the utmost with limited interference of EU institutions or other 51 member states, on state expenditure. That is why Germany may not agree to intergovernmental or supranational instruments which amount to accepting liability for decisions of other states if they entail consequences which are difficult to calculate and which might practically lead to the depletion of German budgetary autonomy for a 52 considerable period of time.

47

Id. at para. 364.

48

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Dec. 8, 2010, Case No. 1 BvR 256/08, para. 218, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2010/12/rs20101208_1bvr025608.ht ml. 49

BVerfG, Case No. 2 BvE 2/08 at para. 256.

50

BVerfG, Case No. 2 BvR 1390/12 at paras. 104–08 (208–13 in the English translation); this decision of 12 September 2012 concerns the applications for the issue of a temporary injunction. For the final decision of 18 March 2014, see ECLI:DE:BVerfG:2014:rs20140318.2bvr139012, para. 164. 51

52

BVerfG, Case No. 2 BvE 2/08 at para. 256.

BVerfG, Case No. 2 BvR 1390/12 at paras. 109–13 ECLI:DE:BVerfG:2014:rs20140318.2bvr139012, paras. 165–66.

(213–17

in

the

English

translation);

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In this light, the full-fledged introduction of Eurobonds may be considered to be 53 anathema. This does not imply that all interference of EU institutions or other member states with the German budget is taboo. The Bundesverfassungsgericht has considered the balanced budget requirements in the Fiscal Compact to be acceptable because in the longer run they protect the budgetary prerogatives of the Bundestag and its successors, 54 and thereby German democracy. Moreover, the German parliament may in a spirit of solidarity agree to certain financial aid arrangements such as the European Stability Mechanism, even if the financial consequences might be of structural importance for the 55 German budget. Yet, the financial engagements thus undertaken must be quantitatively limited and they must leave the overall budgetary responsibility of the Bundestag intact. In addition, the Bundestag must be able to approve each large-scale aid measure and to 56 influence the conditions and the administration of the aid, and it must be fully informed. Directly connected to the safeguarding of Bundestag’s overall budgetary responsibility is the requirement that the EMU is and must remain a “stability community”. The current design of the EMU is to a large extent dictated by German constitutional law in general and German constitutional identity in particular, and forms an essential condition for Germany’s participation in it. The independence of the ECB, the objective of price stability, the prohibition of monetary financing, the “no-bail out” clause and the obligation of a sustainable budget all protect the “haushaltpolitische Gesammtverantwortung” of the Bundestag. The EMU design is not immutable and may be changed to a certain extent. The Bundesverfassungsgericht accepted for instance the new Article 136(3) TFEU. Although the amendment puts the principle of the independence of the national budgets and that of the Eurozone states’ reliance on the money markets for the financing of their debts into perspective, it does so only to a limited extent. Nevertheless, the court emphasized that the prohibition of monetary financing by the ECB, the ECB’s autonomy and the 57 requirement of budgetary discipline remain essential elements of the EMU.

53

Sebastian Müller-Franken, Eurobonds und Grundgesetz, 67 JZ 219, 221–24 (2012); Christoph Gröpl, Schritte zur Europäisierung des Haushaltsrechts, 52 DER STAAT 1, 15 (2013). 54

BVerfG, Case No. 2 BvR 1390/12 at paras. 110–14 (224–28 in the English translation); see also ECLI:DE:BVerfG:2014:rs20140318.2bvr139012, paras. 168–72; BVerfG, Case No. 2 BvR 1099/10 at para. 104. 55

BVerfG, Case No. 2 BvR 1390/12 at para. 110 (214 in the English translation); see also BVerfG, Case No. 2 BvE 2/08 at para. 256. 56

BVerfG, Case No. 2 BvR 1390/12 at para. 111 (215 in the English translation).

57

in

Id. at paras. 116–17, 128-130 (220–21, 232-234 ECLI:DE:BVerfG:2014:rs20140318.2bvr139012, paras. 177–81.

the

English

translation);

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4. Ultra Vires Review and Constitutional Identity Review and their Effects The relationship between ultra vires and constitutional identity review and their potential effects can be analyzed from two perspectives —the German perspective and the EU 58 perspective, which we will not address. First, before the Bundesverfassungsgericht may declare an EU act ultra vires, the ECJ has to be given the opportunity to rule on the act’s validity in preliminary ruling proceedings under Article 267 TFEU. The judgment of the ECJ binds the Bundesverfassungsgericht “in principle”, but it cannot be excluded that an act which has been declared intra vires by the ECJ, such as the OMT decision of the ECB, is nevertheless subsequently considered ultra 59 vires by the Bundesverfassungsgericht. Second, while the Bundesverfassungsgericht in the Lisbon-judgment left the possibility open that not only ultra vires, but also intra vires secondary EU law could violate German 60 constitutional identity, the OMT-reference clearly places ultra vires acts and acts violating German constitutional identity in one, continuing line: Although not every secondary EU act which is ultra vires act also violates German constitutional identity, any act violating 61 German constitutional identity seems to be for that matter ultra vires. Indeed, what the German parliament cannot amend, it cannot transfer to the EU. In other words, because German constitutional identity functions as a limit to the transfer of powers to the EU, any EU act violating German constitutional identity is necessarily ultra vires, as the power to infringe the constitutional identity cannot have been transferred.

58

Franz C. Mayer, Rebels without a cause? Zur OMT-Vorlage des Bundesverfassungsgericht, 5 EUROPARECHT 473, 495–96 (2014). 59

Bundesverfassungsgericht [BVerfG][Federal Constitutional Court], July 6, 2010, Case No. 2 BvR 2661/06, para. 60, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2010/07/rs20100706_2bvr266106en. html [hereinafter Honeywell]; Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, Case No. 2 BvR 2728/13, para. 24, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2014/01/rs20140114_2bvr272813en. html. 60

BVerfG, Case No. 2 BvE 2/08 at para. 339 (“[W]enn innerhalb oder außerhalb der übertragenen Hoheitsrechte diese mit Wirkung für Deutschland so ausgeübt werden, dass eine Verletzung der durch Art. 79 Abs. 3 GG unverfügbaren und auch durch das europäische Vertragsrecht, namentlich Art. 4 Abs. 2 Satz 1 EUV-Lisbon, geachteten Verfassungsidentität die Folge ist.”). 61

BVerfG, Case No. 2 BvR 2728/13 at para. 25 (“Das ist nicht nur dann der Fall, wenn sich eigenmächtige Kompetenzerweiterungen auf Sachbereiche erstrecken, die zur Verfassungsidentität der Mitgliedstaaten rechnen oder besonders vom demokratisch diskursiven Prozess in den Mitgliedstaaten abhängen (…); allerdings wiegen hier Kompetenzüberschreitungen besonders schwer.”).

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Third, while the Bundesverfassungsgericht’s assessment of the ultra vires character of an EU act requires a preliminary question to the ECJ, whose interpretation the German court 62 follows in principle, and thus is determined in a “relationship of cooperation” between the courts, the assessment of whether an EU act violates the German constitutional 63 identity is for the German court alone to decide. Also, when it comes to the effects an important distinction should be made between acts which are only ultra vires and those that also violate German constitutional identity. In the first instance the effects of both are similar: The relevant act is inapplicable in Germany and all German institutions, including 64 the Bundesbank, have to refrain from implementing or executing it. Moreover, the German government and the Bundestag should actively strive for termination of the illegality for instance by persuading the relevant EU authorities to withdraw the relevant 65 act or by promoting a Treaty amendment remedying the illegality. Yet, while the German parliament may authorize a Treaty amendment to remedy an act that is only ultra vires, if need be with a qualified majority (Article 23(1), second and third sentence, GG), it could never agree to a Treaty amendment remedying an act violating German constitutional identity. That would require an amendment of the constitution to which only the original 66 constituent power can consent, i.e. the German people. Precisely what this popular consent would imply remains unclear. The current German Basic Law provides no means for the German people to directly express itself in a referendum. Article 146 GG, on the other hand, stipulates that “this Basic Law (“Grundgesetz”) loses its validity on the day on which a constitution (“Verfassung”) freely adopted by the German people takes effect.” The Bundesverfassungsgericht has ruled that the relinquishment of German statehood would require the adoption of a new constitution 67 under Article 146. Perhaps in that situation such a new constitution does not necessarily have to be approved by the German people in a referendum; its adoption by a directly 68 elected constitutional convention may also do. Yet, it has also been suggested that in 62

Honeywell at para. 60.

63

BVerfG, Case No. 2 BvR 2728/13 at para. 103.

64

Maastricht Decision at 188; BVerfG, Case No. 2 BvR 2728/13 at paras. 27, 45. However, it is perhaps not excluded that German institutions apply of their own free will EU law which is declared ultra vires and which is not contrary to the Grundgesetz. Mayer, supra note 58, at 481. 65

2 BvR 2728/13 of 14 January 2014 (Gauweiler), para. 49.

66

BVerfG, Case No. 2 BvE 2/08 at para. 179.

67

Id.

68

However a referendum might be politically unavoidable. Martin Nettesheim, Wo “endet” das Grundgesetz? – Verfassungsgebung als grenzüberschreitender Prozess, 51 DER STAAT 313, 316 (2012); Volker M. Haug, Uber Partizipation zu einer postgrundgesetzlichen Verfassung. Zum Potential des Art. 146 GG im Licht der europäischen Integration, 138 AÖR 435, 459–61 (2013).

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case of the abandonment of statehood the adoption of a formally new constitution is not necessary and a referendum on the basis of a procedure inserted in the Basic Law by the 69 derived constituent power would suffice. Of course, it could be argued that if the proposal that Germany becomes a member of a European federal state is adopted by such a referendum, the Grundgesetz has become a “new constitution,” despite all appearances of continuity. Be that as it may, an issue that needs to be distinguished from the previous one is that arguably not every single violation of German constitutional identity implies the 70 abandonment of statehood. In case of an identity infringement short of such abandonment a referendum held on the aforementioned basis might a fortiori be an adequate way of redeeming the infringement. C. National Constitutional Identity and Article 4(2) TEU I. Introduction In its order for reference in the Gauweiler case, the Bundesverfassungsgericht contended that the EU’s duty to respect national identity under Article 4(2) TEU differs from the duty of the German institutions under German constitutional law to protect German “constitutional identity” in three respects. The first is conceptual: Article 4(2) TEU is “based on a concept of national identity which does not correspond to the concept of 71 constitutional identity within the meaning of Art. 79 sec. 3 GG but reaches far beyond”. The second concerns the intensity of the protection due: The duty to respect national identity under Article 4(2) is relative, as it may be balanced against “rights conferred by Union law”, while the duty of the German institutions to protect German constitutional 72 identity is absolute and may “not be balanced against other legal interests”. And third, 73 the protection of German constitutional identity is a task of the German court alone, implying that the ECJ has no say in it. The Bundesverfassungsgericht’s opinion that the concept of national identity in Article 4(2) “reaches far beyond” the concept of constitutional identity under German constitutional law is rather puzzling. Earlier, in its Lisbon-Urteil, the court had emphasized that the two duties go “hand in hand,” suggesting thus that the two duties run parallel and that the duty 69

Grimm, supra note 38, at 490; Peter M. Huber, The Federal Constitutional Court and European Integration, 21 EUR. PUB. L. 83, 91 (2015). See also Haug, supra note 68, at 453 (opining that in such referendum the German “people” would not act as “pouvoir constituant”, but as “pouvoir constitué” and would therefore be bound by Art. 79(3) GG). 70

Nettesheim, supra note 68, at 318–22.

71

BVerfG, Case No. 2 BvR 2728/13 at para. 29.

72

Id.

73

Id.

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imposed on the EU to respect the national identities of the member states by and large corresponds to duty the Basic Law imposes on German bodies to respect German 74 constitutional identity. This seems to suggest that the Bundesverfassungsgericht disapproves of the approach of the ECJ, or at the very least, that it now realizes that “national identity” as protected under Article 4(2) TEU is very different from constitutional identity as protected under Article 79 (3) of the Basic Law. The court suggests that compliance with the obligation under Article 4(2) TEU under the purview of the ECJ is one thing, but does not guarantee that national constitutional courts in the member states will consider this sufficient, and that they will accept that EU acts which according to the ECJ respect Article 4(2) TEU also respect the national (constitutional) identity as protected under national constitutional law. It is useful, therefore, to briefly return to the concept of “national identity” under Article 4 (2) TEU as interpreted by the ECJ. II. Different Interpretations of National Identity Protection Under Article 4(2) TEU The concept of “national identity” entered the stage of EU law in Article F(1) of the 75 Maastricht Treaty. The reference — which was not justiciable and served mainly symbolic (“expressivist”) and political functions — was to the national identities “of the Member States,” and was closely linked to their democratic system of government. Also, the identity that had to be respected was that of the member states, rather than of their 76 peoples or citizens. Therefore, what seemed to be aimed at here was the preservation of the member states as independent states and the confirmation that the Union would 77 not transform itself into a federal United States of Europe absorbing the member states. The provision was re-numbered and revised with the Treaty of Amsterdam and was 78 detached from any reference to democratic principles. An attempt in the Constitutional 74

BVerfG, Case No. 2 BvE 2/08 at para. 240.

75

“The Union shall respect the national identities of its Member States, whose systems of government are founded on the principles of democracy.” 76

Monica Claes, National Identity: Trump Card Or Up For Negotiation?, in NATIONAL IDENTITY AND EUROPEAN INTEGRATION 116 (Alejandro Saiz Arnaiz & Carina Alcoberro Llivina eds., 2013). 77

See also Opinion of Advocate General Poiares Madura at para. 31, Case C-213/07, Michaniki AE v. Ethniko Symvoulio Radiotileorasis and Ypourgos Epokrateias (Oct. 8, 2008), http://curia.europa.eu/juris/document/document.jsf?text=&docid=68940&pageIndex=0&doclang=EN&mode=lst &dir=&occ=first&part=1&cid=76129; Opinion of Advocate General Kokott at para. 51, Joined Cases C-428/06 to C343/06, Unión General de Trabajadores de La Rioja v. Juntas Generales del Territoria Histórico de Vizcaya and Others (May 8, 2008), http://curia.europa.eu/juris/document/document.jsf?text=&docid=69673&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76190. 78

Article 6(3) TEU read, 1. The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to the Member States. 2. The

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Convention to carve out core areas of national sovereignty and essential state functions and list exclusive competences of the member states failed, and ultimately resulted in a much more sober Article 4(2) TEU in Lisbon, which reads in full: The Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local selfgovernment. It shall respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State. Perhaps, the addition of the phrase “inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government” lead the Bundesverfassungsgericht in its Lisbon decision to consider the duty under EU law to respect the national identities of the member states and the duty under the Basic Law to respect German constitutional identity going “hand in hand.” Indeed, the phrase is reminiscent of the idea, expressed in Solange I of “the basic structure of the Constitution, which forms the basis of its identity” as a barrier to EU integration, while in Solange II, it stated that Germany may not surrender the identity of the German constitutional order by 79 “an infringement of its basic construction, of its constituent structures”. The travaux préparatoires of the provision suggest that the terminological similarity (“fundamental 80 structures” v. “basic construction” and “constituent structures”) is rather accidental, but even so, it may have enticed the Bundesverfassungsgericht to read the phrase as a reference to German Verfassungsidentität: “the fundamental political and constitutional 81 structures of sovereign Member States (…) are recognised by Article 4.2.” Several commentators have drawn similar conclusions; the identity clause in Article 4(2) has been Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law. 3. The Union shall respect the national identities of its Member States. 4. The Union shall provide itself with the means necessary to attain its objectives and carry through its policies. 79

Solange II at 375–76; Solange I at 279 et seq..

80

Barbara Guastaferro, Beyond the Exceptionalism of Constitutional Conflicts: The Ordinary Functions of the Identity Clause, 31 Y.B. EUR. L. 263, 271 et seq. (2012); Carina Alcoberro Llivina, Identity and Diversity in EU Law: Contextualising Article 4(2) TEU 247 (2014) (unpublished doctoral thesis, Universitat Pompeu Fabra, Barcelona). 81

BVerfG, Case No. 2 BvE 2/08 at para. 240.

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depicted as the Europeanisation of the controlimiti case law of the German constitutional 82 court and of that of the Italian constitutional court. Others have however proposed alternative readings of the identity clause. One of these is based on the finding that only some of the issues protected under German Verfassungsidentität find refuge in specific Treaty provisions, inter alia in Article 4(2) itself — internal and external security. This suggests that the national identity clause under Article 4(2) TEU has a more limited scope than German Verfassungsidentität. On this basis it has for instance been argued that Article 4(2) TEU distinguishes between constitutional identity and state identity. Under state identity the internal and external security 83 competences and statehood would be protected, according to some even better than 84 constitutional identity. In this line of thinking, and in contrast to German Verfassungsidentität, the national identity clause in Article 4(2) TEU would (only) refer to national constitutional provisions or principles which are “crucial and distinctive”, differentiating one particular member state from the others — and not to sovereignty, 85 statehood and reserved competences. In this interpretation there is, therefore, an important difference in the contents of German constitutional identity and that of the identity clause in Article 4(2). While Verfassungsidentität alludes to principles which are not only foundational for the national legal orders but also for the EU’s legal order (democracy, rule of law, solidarity etc., see Articles 2 and 3 TEU), this interpretation of 4(2) TEU touches on fundamental principles which are (more or less) specific to a particular national constitutional order: Only fundamental national constitutional provisions or principles which are not recognized as such in the EU’s legal order would be eligible for 86 protection under Article 4(2) TEU. This is also the meaning which is often attributed to the concept of identité constitutionnelle de la France (French constitutional identity) in the case-law of the Conseil constitutionnel and the Conseil d’État. Like Verfassungsidentität, French identité constitutionnelle functions as a limit to the applicability of secondary EU law, but its scope is arguably much more limited than that of its German counterpart.

82

Armin von Bogdandy & Stephan Schill, Overcoming Absolute Primacy: Respect for National Identities Under the Lisbon Treaty, 48 COMMON MKT. L. REV. 1417, 1426 (2011); Guiseppe Martinico, What lies behind Article 4(2) TEU?, in NATIONAL IDENTITY AND EUROPEAN INTEGRATION 93, 96 (Alejandro Saiz Arnaiz & Carina Alcoberro Llivina eds., 2013). As is well known, the Italian constitutional court has stipulated repeatedly that EU must respect the “fundamental principles of our constitutional order.” Corte Costituzionale (Constitutional Court), 27 Dec. 1973, n. 183/1973 (Frontini); Corte Costituzionale (Constitutional Court), 8 June 1984, n. 170/84 (Granital). 83

Ingolf Pernice, Der Schutz nationaler Identität in der Europäischen Union, 136 AÖR 185, 189–93 (2011); FRANÇOIS-XAVIER MILLET, L’UNION EUROPEENNE ET L’IDENTITE CONSTITUTIONNELLE DES ETATS-MEMBRES 175–78 (2013). 84

MILLET, supra note 83, at 175–81.

85

Id. at 71, 181.

86

See also Julien Sterck, Expressing sovereignty in the European Union: An Irish Perspective on Constitutional Identity 20–21 (UCD Working Papers in Law, Criminology & Socio-Legal Studies, Research Paper No. 3/2014).

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III. The Case Law of the ECJ Article 4(2) TEU has not yet played a prominent role in the case law of the ECJ. Only in a handful of cases has the ECJ dealt with a claim that a derogation from EU law is justified on grounds of the EU’s duty to respect national identity. Runevic-Vardyn and Wardyn and Las concerned the protection of national languages, which was recognized as part of the national identity of the relevant states, and could justify a derogation from an obligation 87 under free movement rules if proportionate; Ilonka Sayn-Wittgenstein concerned the Austrian Law on the abolition of the nobility, which has constitutional status and was 88 qualified as a reliance on public policy. In Digibet, the Court made reference to the duty to respect national identities of the member states to confirm the existing principle often referred to as “procedural autonomy”. When provisions of the Treaties or of regulations confer powers or impose obligations upon the member states for the purposes of the implementation of EU law, the question of how the exercise of such powers and the fulfilment of such obligations is entrusted to specific national bodies is solely a matter for the constitutional system of each 89 State. In several other cases, the Government or the referring court had claimed that national identity was at stake, but the ECJ did not pick up on it, and decided the case on other 90 grounds. In Torresi, the Court rejected a claim that EU secondary law was invalid for 91 infringement of the national identity of Italy on factual grounds. There have also been 87

Case C-391/09, Runevic-Vardyn and Wardyn v. Vilniaus miesto savivaldybés administracija and Others, 2011 E.C.R. I-03787; Case C-202/11 Anton Las v. PSA Antwerp NV. (Apr. 16, 2013), http://curia.europa.eu/juris/document/document.jsf?text=&docid=136301&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76426; Case C-473/93, Comm’n v. Luxembourg, 1996 E.C.R. I-3207 (pre-Lisbon). 88

Case C-208/09, Ilonka Sayn-Wittgenstein v. Landeshauptmann von Wien, 2010 E.C.R. I-13693.

89

Case C-156/13, Digibet Ltd. and Gert Albers v. Westdeutsche Lotterie GmbG & Co. (June 12, 2014), http://curia.europa.eu/juris/document/document.jsf?text=&docid=153584&pageIndex=0&doclang=EN&mode=ls t&dir=&occ=first&part=1&cid=76572. 90

Case C-51/08, Comm’n v. Luxembourg, 2011 E.C.R. I-4231 (a pre-Lisbon case, in which the Luxembourg government argued that the use of the Luxemburgish language was necessary in the performance of notarial activities, and that the nationality condition for the position of notary was intended to ensure respect for “the history, culture, tradition and national identity of Luxembourg” within the meaning of Article 6(3) EU); Case C– 193/05 Comm’n v. Luxembourg, 2006 E.C.R. I–8673; Case C-364/10, Hungary v. Slovakia (Oct 16, 2012), http://curia.europa.eu/juris/document/document.jsf?text=&docid=128561&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76647 (on Article 4(2) TEU as protecting the sovereignty of member states and carving out a EU-free space for member states). 91

Joined Cases C-58/13 & C-59/13, Torresi and Torresi v. Consiglio dell’Ordine degli Avvocati di Macerata (July 17, 2014), http://curia.europa.eu/juris/document/document.jsf?text=&docid=155111&pageIndex=0&doclang=EN&mode=ls t&dir=&occ=first&part=1&cid=76681. In Case C-393/10, the Court rejected a claim based on national identity put

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cases in which the Advocate General — typically with an academic interest — did frame the issue in terms of national identity, even if the argument had not been put forward by the Government or the referring court, but the Court did not follow its Advocate 92 Generals. Finally, there is a number of landmark cases of EU law that have not been framed as “national identity” cases, but are today considered as prime examples of what is 93 94 at stake in Article 4(2) TEU: the cases of Anita Groener, Omega (mentioned also by the Bundesverfassungsgericht in the Gauweiler order for reference and discussed below) and 95 96 sometimes also SPUC v Grogan and the Azores judgment. These are cases in which the ECJ is responsive to national (constitutional) specificities and sensitivities that it considers worthy of protection and allows derogations from EU obligations for one member state, which do not necessarily extend to others. But the ECJ did not take recourse to the concept of national identity in these cases. What are we to make of the ECJ case law on national identity under Article 4(2) TEU? In practical effect, the only cases in which a claim based on the need for respect of national forward by the intervening Latvian Government, without much explanation. Case C-393/10, O’Brien v. Ministry of Justice (Mar. 1, 2012), http://curia.europa.eu/juris/document/document.jsf?text=&docid=119901&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76749. 92

See, e.g., Opinion of Advocate General Maduro, Case C-160/03, Spain v. Eurojust (Dec. 16, 2004), http://curia.europa.eu/juris/document/document.jsf?text=&docid=49769&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76852 (relating to language requirements); Opinion of General Advocate Maduro, Case C-213/07, Michaniki AE v. Ethniko Symvoulio Radiotileorasis and Ypourgos Epokrateias (Oct. 8, 2008), http://curia.europa.eu/juris/document/document.jsf?text=&docid=68940&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76906 (relating to a peculiarity in the Greek Constitution establishing an incompatibility between the public works sector and that of the media); Opinion of Advocate General Colomer, Case C-205/08, Unweltanwalt von Kärntner v. Kärntner Landesregierung (June 25, 2009), http://curia.europa.eu/juris/document/document.jsf?text=&docid=77932&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=76967 (concerning the national identity and national constitutional autonomy of member states to decide which body has jurisdiction under the constitution to dispense justice); Opinion of Advocate General Kokott, Case C-566/10, Italy v. Comm’n (June 21, 2012), http://curia.europa.eu/juris/document/document.jsf?text=&docid=124201&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=77085 (on the principle of multilingualism); Opinion of Advocate General Bot, Case C-399/11, Melloni v. Ministerio Fiscal (Oct. 2, 2012), http://curia.europa.eu/juris/document/document.jsf?text=&docid=127841&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=77144 (on whether a particular manner of protecting fundamental rights could pertain to the national identity of a member state). 93

Case C-379/87, Groener v. Minister for Education and the City of Dublin Vocational Educational Comm., 1989 E.C.R. 3967. 94

Case C-36/02, Omega Spielhallen- und Automatenaufstellungs-GmnH v. Oberbürgermeisterin der Bundesstadt Bonn, 2004 E.C.R. I-09609. 95

Case C-159/90, SPUC v. Grogan, 1991 E.C.R. I-04685.

96

Case C-88/03, Portugal v. Comm’n, 2006 E.C.R. I-7115.

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identity was successful are Sayn-Wittgenstein and Runević-Vardyn and Wardyn. The practice so far shows that the ECJ, understandably so, follows the lead of the relevant governments making the claim based on national identity when assessing whether a particular concern pertains to a State’s “national identity”. Indeed, the content of a State’s “national identity” is hard to ascertain and it is arguably not for the ECJ to decide whether a specific national rule or principle does or does not pertain to what States consider to be their national identities. So, where no such argument is made, the Court will not of its own motion introduce it. Where the claim is made and is framed by reference to Article 4(2) TEU, the Court is careful to refer back to what the Government representing the relevant State has argued before the Court. It usually does not scrutinize the assessment made by 97 the Government. Thus far, the claims that have been made have pertained to a variety of elements: To what could be termed the more cultural or socio-psychological aspects of “national identities”, in casu national language or language policies (Runevic-Vardyn and Wardyn, Las) and the abolition of the nobility (Sayn Wittgenstein), as well as to the organization of the State, more particularly the federal structure of the State (Digibet), and to rules regulating access to certain professions (Torresi); claims also have been made to ensure respect for certain choices in the sphere of fundamental rights protection (Melloni), or to protect statehood and sovereignty (Hungary v Slovakia). In all these cases, the respect owed to the national identities of the member states under EU law has not been understood as an absolute obligation on the EU to defer, or to carve out an EU-free zone for the member states, but was balanced against other interests, although sometimes the proportionality test performed was “the thinnest possible”, in favor of the invoked national constitutional 98 provision. Now, why does the Bundesverfassungsgericht distance itself from the approach of the ECJ?

97

See, e.g., Las, Case C-202/11 (where the Court seems to be more careful than the Advocate General) (see Elke Cloots, Respecting linguistic identity within the EU’s internal market: Las, 51 COMMON MKT. L. REV. 623 (2014)); see also Sayn-Wittgenstein, Case C-208/09; Torresi, Joined Cases C-58/13 & C-59/13 (where the ECJ rejected a claim based on national identity on factual grounds); Opinion of Advocate General Bot, supra note 92, at para 141, (stating “the Kingdom of Spain itself stated, at the hearing, relying inter alia on the exceptions in Spanish law to the holding of a retrial following a judgment rendered in absentia, that the participation of the defendant at his trial is not covered by the concept of the national identity of the Kingdom of Spain”). The ECJ did not mention the issue of national identity in that latter case. In O’Brien the Court rejected a claim based on the national identity of the UK put forward by the intervening Latvian Government, without much explanation. O’Brien, Case C-393/10. 98

Leonard F.M. Besselink, Case C-208/09, Ilonka Sayn-Wittgenstein v. Landeshauptmann von Wien, Judgment of the Court (Second Chamber) of 22 December 2010, 48 COMMON MKT. L. REV. 671, 692 (2012).

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IV. “A concept of national identity reaching far beyond Article 79(3) Grundgesetz” In its Gauweiler order for reference, the Bundesverfassungsgericht stated that the duty contained in Article 4(2) TEU to respect the national identities of the member states was “based on a concept of national identity which does not correspond to the concept of 99 constitutional identity within the meaning of Art. 79 sec. 3 GG, but reaches far beyond.” While the German court points to six ECJ decisions to illustrate that the protection offered under Article 4(2) TEU by the ECJ is less extensive than that required by the German constitution for national constitutional identity because it is balanced against the rights 100 conferred by EU law, it refers to only one of these decisions to underpin the conceptual 101 difference of both duties: the Sayn-Wittgenstein judgment of 22 December 2010. In Sayn-Wittgenstein the ECJ accepted a derogation from the free movement of EU citizens on the basis of the Austrian Law on the abolition of the nobility. This statute, which has constitutional status in Austria, forbids Austrian citizens to have a title of nobility registered in Austria, even if the citizen has acquired this title by means of adoption in another EU member state. Before the ECJ the Austrian Government contended that the statute “intended to protect the constitutional identity of the Republic of Austria”. It argued that “even if it is not an element of the republican principle which underlies the Federal Constitutional Law, (it) constitutes a fundamental decision in favor of the formal equality of treatment of all citizens before the law” (para 74). Therefore, proportionate restrictions on free movement rights should be “justified in the light of the history and fundamental values of the Republic of Austria” (para 75). The ECJ qualified the statute “in the context of Austrian constitutional history” as an element of national identity (par. 83), accepted the ban as a measure of “public policy” (para 83), stated that the EU in accordance with Article 4(2) TEU is bound to respect the national identities of its member states “which include the status of the State as a Republic,” and concluded that it is not “disproportionate for a Member State to seek to attain the objective of protecting the principle of equal treatment by prohibiting any acquisition, possession or use, by its nationals, of titles of nobility” (paras 92-93).

99

BVerfG, Case No. 2 BvR 2728/13 at para. 29 (“Dem liegt ein Begriff der nationalen Identität zugrunde, der dem Begriff der Verfassungsidentität im Sinne von Art. 79 Abs. 3 GG nicht entspricht, sondern weit darüber hinausreicht.”). 100

101

Id.

Sayn-Wittgenstein, Case C-208/09. The list of ECJ judgments which the BVerfG links to Article 4(2) is conspicuously short. Scholarship has connected many more judgments to the provision. Claes, supra note 76, at 130–33; Laurence Burgorgue-Larsen, A Huron at the Kirchberg Plateau or a Few Naive Thoughts on Constitutional Identity in the Case-law of the Judge of the European Union, in NATIONAL IDENTITY AND EUROPEAN INTEGRATION 275 (Alejandro Saiz Arnaiz & Carina Alcoberro Llivina eds., 2013).

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The Bundesverfassungsgericht does not explain why in its view the Sayn-Wittgenstein judgment demonstrates that the scope of the identity clause in Article 4(2) TEU is substantively broader than that of the identity of the German Basic Law. This could relate to two issues: the fundamental constitutional principles at stake and their actual application in the specific case. Indeed, Verfassungsidentität consists of fundamental constitutional principles, but these always have to be concretized and applied in a specific context before they can function in practice, here as limit to EU integration. This is what the Bundesverfassungsgericht has done when it, for instance, identified as specific integration-proof elements of German constitutional identity the rule that the deployment of the German armed forces is not permissible without approval of the Bundestag (application of the democracy principle), or that the “citizens” enjoyment of freedom may not be totally recorded and registered’ (application of the rule of law principle). The Bundesverfassungsgericht’s appreciation of the conceptual difference between the two identities is presumably not caused by the ECJ’s assessment that “the status of the State as a Republic” is part of national identity in the sense of Article 4(2) TEU and neither by the Austrian government’s appraisal as such of equality of treatment of all citizens before the law. We may presume that the republican nature of a state is also part of the identity of a national constitution in the way the Bundesverfassungsgericht perceives the 102 notion. The equality principle also belongs to German constitutional identity. So, on the level of the principles Sayn-Wittgenstein cannot or should not have bothered the German court. Why then does the German court insist that Sayn-Wittgenstein does not match with the German concept of constitutional identity? Could it simply be because there is no German rule prohibiting the acquisition or use of noble titles, and that the statute therefore by definition does not fall under the notion of German constitutional identity? It is not very likely that the Bundesverfassungsgericht would adopt such an utterly Germany-centered interpretation and it would be at odds with the Bundesverfassungsgericht’s unusual effort in the decision to engage with the positions of a number of other (constitutional) courts as 103 regards ultra vires and identity review. Or could it be that the Bundesverfassungsgericht does not consider the ban on noble titles fundamental or structural enough to be part of any State’s Verfassungsidentität? When compared to integration-proof elements of German constitutional identity as that regarding the deployment of the German armed forces abroad or regarding the citizens’ privacy, it might be argued that while the latter two are of a fundamental or structural

102

Pernice, supra note 83, at 189–90; Von Bogdandy and Schill, supra note 82, at 1438.

103

BVerfG, Case No. 2 BvR 2728/13 at para. 30.

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importance in a democratic State based on the rule of law, the ban on noble titles is more 104 symbolical in nature. If the Bundesverfassungsgericht would indeed find the issue of noble names not fundamental or structural enough to bring it under the notion of Verfassungsidentität, two new questions arise. The first is why the Court includes Omega in the list of references to illustrate that the protection offered by Article 4(2) TEU is of another caliber and involves a proportionality review, and not to argue that the substantive scope of Article 4(2) and German constitutional identity differ. The famous case — usually mentioned as a prime example of how the EU and the ECJ respect fundamental values even if they are applied differently in different member states — concerned the value of human dignity, the alpha and omega of the German Basic Law, the foundational principle of the entire German constitutional edifice, which cannot be balanced against any other interest. But the principle was to be applied in a case concerning laser games and services provided from the UK. While human dignity certainly forms part of the unamendable and integrationproof core of the German Basic Law, it does not seem plausible that the particular application in the case at hand concerning a ban on a laser game, is part of German 105 Verfassungsidentität. In any case, the laser game can hardly be said to have the same structural or fundamental importance as the earlier mentioned integration-proof elements of German constitutional identity. So, why would Omega concern German constitutional identity and not Sayn-Wittgenstein? The second question is the following. If the German Court indeed finds the ban on noble titles in Sayn-Wittgenstein not fundamental or structural enough to range under what it conceives of as “constitutional identity”, why then does the court consider the protection offered under Article 4(2) TEU wanting for including a balancing test? Such a balancing test can only be problematic if what is protected under Article 4(2) TEU is also protected under national constitutional identity interpreted as Verfassungsidentität. What the Court seems to suggest here, is that the manner in which Article 4(2) TEU is applied in practice — to “futile cases” so to say — does not come anywhere near to what its responsibility is when protecting the constitutional identity of Germany. Where constitutional identity as Verfassungsidentität is at stake, there should be no more balancing against other interests, and the assessment is to be done exclusively according to German constitutional law, not Union law. There is accordingly no room for “negotiation” and the decision is for the Bundesverfassungsgericht alone. No references will be made to the European Court. 104

G. Toggenburg, Die 'falsche´ Fürstin: Zum grenzüberschreidenden Verkehr von Adelstiteln vor dem Hintergrund der Unionsbürgerschaft, EUR. L. REPORTER 74, 79 (2011); C. Kohler & W. Pintens, Entwicklungen im europäischen Personen- und Familienrecht 2010–2011, 18 ZEITSCHRIFT FÜR DAS GESAMTE FAMILIENRECHT MIT BETREUUNGSRECHT, ERBRECHT, VERFAHRENSRECHT, ÖFFENTLICHEM RECHT 1433, 1439 (2011/3); F. Swennen, Zaken C-208/09, SaynWittgenstein en C-391/09, Runevic-Vardin en Wardin, SOCIAAL ECONOMISCHE WETGEVING 76, 80 (2012/2). 105

Cf. Bundesverfassungsgericht [BVerfG][Federal BUNDESVERFASSUNGSGERICHTS [BVERFGE] 209, 229–30.

Constitutional

Court],

87

ENTSCHEIDUNGEN

DES

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To conclude, to the extent Article 4(2) TEU offers protection in more cases beyond what is protected under Article 79(3) of the Basic Law, the Bundesverfassungsgericht should not be concerned. Yet it seems that what actually worries the Court is not the difference in scope between Article 4(2) TEU and Article 79(3) Basic Law, but that the application of Article 4(2) TEU involves a balancing exercise also in cases in which Verfassungsidentität is at stake. In those cases, the Bundesverfassungsgericht claims sole responsibility. D. Comparative Analysis

106

I. Introduction In its order for reference, the Bundesverfassungsgericht made reference to decisions of the Danish Højesteret, the Estonian Riigikohus, the French Conseil constitutionnel, the Supreme Court of Ireland, the Italian Corte costituzionale, the Latvian Satversmes tiesa, the Polish Trybunał Konstytucyjny, the Spanish Tribunal Constitucional, and the Czech Ústavni Soud, as well as to Chapter 10 Article 6 sentence 1 of the Swedish Form of Government to support its position that ultra vires and identity review could be found in the constitutional 107 law of many other member states of the European Union. The reference is remarkable. It is no secret that it has usually been the other way around: the German Federal Constitutional Court has significantly impacted on the jurisprudence of other national 108 courts in this field. Even if the Bundesverfassungsgericht has on previous occasions cited

106

This part partially draws on Leonard Besselink, Monica Claes, Šejla Imamović & Jan-Herman Reestman, National Constitutional Avenues for Further European Integration, European Parliament's Committees on Legal Affairs and on Constitutional Affairs (Feb. 2014), available at http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/493046/IPOL-JURI_ET(2014)493046_EN.pdf. 107

108

BVerfG, Case No. 2 BvR 2728/13 at para 30.

See, e.g., Julio Baquero Cruz, The Legacy of the Maastricht-Urteil and the Pluralist Movement, 14 EUR. L.J. 389 (2008); Wojciech Sadurski, “Solange, chapter 3”: Constitutional Courts in Central Europe – Democracy – European Union (EUI, Working Paper LAW No. 2006/40); ALLAN F. TATHAM, CENTRAL EUROPEAN CONSTITUTIONAL COURTS IN THE FACE OF EU MEMBERSHIP. THE INFLUENCE OF THE GERMAN MODEL IN HUNGARY AND POLAND (2013); GENERAL REPORT FOR THE XVITH CONGRESS OF THE CONFERENCE OF EUROPEAN CONSTITUTIONAL COURTS 2014 ON CO-OPERATION OF CONSTITUTIONAL COURTS IN EUROPE – CURRENT SITUATION AND PERSPECTIVES, available at http://www.confeuconstco.org/en/common/home.html (“Many national reports mention the German Federal Constitutional Court as the most frequently cited foreign constitutional court, regardless of regional or linguistic factors, especially in cases relating to fundamental rights”). See, for instance, from the Czech Report, drafted by the Czech Constitutional Court: “However, other European constitutional courts (German Constitutional Court in Solange I, Solange II, Maastricht, Bananenmarkt; Italian Constitutional Court in Frontini) also ruled that there are certain boundaries beyond which unreserved respect for ECJ's postulate on the primacy of any European law is not appropriate. The Constitutional Court of the Czech Republic was inspired in particular by the case law of its German counterpart.”

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decisions from its brethren in other member states, also in EU related issues, it is usually 109 the one that is referred to. In general, courts may have several reasons to cite foreign case law, but usually they seek to increase the acceptance of their decision by borrowing legitimacy from other, often 110 stronger and more powerful courts. References to decisions rendered by other courts in individual cases may also enable courts to draw on common European standards, contribute to developing them, and apply them to back up their own decisions. In this case, however, the reason for the reference to foreign sources seems different: The Bundesverfassungsgericht is not simply seeking comparative inspiration, but presents itself as one among many constitutional and highest courts claiming jurisdiction to protect the constitutional identity and the limits of transferred powers. In so doing, the Bundesverfassungsgericht increases the pressure and raises the stakes for the ECJ, the ECB and the EU. The German court suggests that is not just one rebelling court, but speaks also for others. The court concedes that there are differences between the positions mentioned, in the sense that some of them have a Ewigkeitsklausel, or an unamendable core, and others do not. But on the whole, so it maintains, the positions in these systems are comparable. But just how similar are these positions really? Is it fair to suggest, as the Court does, that the same principles can be found in those countries? We have taken the citations of the Court in the OMT reference one by one, in order to critically assess whether on the basis of the same material we arrive at the same conclusion as the Bundesverfassungsgericht. Before embarking on the detailed analysis, a couple of remarks are necessary. To begin with, the comparative work done by the Bundesverfassungsgericht seems a bit imprecise. The Court cites specific paragraphs in decisions of some courts, while referring to entire decisions for others — Italy —, and in the case of Sweden, it makes reference only to a constitutional provision and not its application. Some of the cited decisions do not seem well chosen, because they do not seem to confirm the same principles mentioned — such as the Giampaoli decision of the Italian Corte costituzionale — or no longer represent the most recent position of the relevant court — the Maastricht decision of the Danish Højesteret. Second, as always in comparative work, what is omitted from the comparison may be as interesting as what is included. Why, for instance, does the Court make reference only to the old Maastricht decision of the Danish Højesteret and not to its more recent Lisbon decision? And what is the situation in the member states that have not been referred to? 109

For a detailed analysis, see generally Mattias Wendel, Comparative reasoning and the making of a common constitutional law: EU-related decisions of national constitutional courts in a transnational perspective, 11 INT’L J. CONST. L. 981 (2013). 110

On comparative reasoning, see MICHAL BOBEK, COMPARATIVE REASONING IN EUROPEAN SUPREME COURTS (2013).

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We will return to this shortly at the end of this section, but it seems that while it may well be true that the Bundesverfassungsgericht is indeed not the only court signaling constitutional limits to EU law and retaining jurisdiction to conduct ultra vires and identity review, it is not at all obvious that this is the majority position. In most of the member states that are not cited, the legal position is much less clear, and courts have not or not explicitly claimed jurisdiction to review EU law. Third, as any student of comparative law is well aware, judicial decisions have to be read in their legal, institutional, political, social, cultural and historical context. It is not clear from the citations in the relevant passage that the Bundesverfassungsgericht has actually 111 conducted what is often referred to as “deep-level” comparative research. The procedural context in which the relevant decisions have been rendered are quite diverse: Out of 15 cited decisions, 6 were handed in the context of a constitutionality review of a 112 113 Treaty tabled for approval and ratification, concerning accession, Treaty 114 115 amendments, or the ESM Treaty. In such situations, courts are entirely free under EU law to draw constitutional boundaries and even to decide that a particular Treaty is unconstitutional; it is only natural for these courts to then emphasize that there are constitutional limits to further transfers of powers or limitations of sovereignty, and that there are conditions attached to participation in terms of respect for fundamental constitutional values. And even then, no court has ever actually prevented ratification; at most, constitutional courts have called for constitutional amendment before ratification 116 could take place. While several constitutional courts have announced, in these cases, that secondary EU law could be reviewed after ratification — usually in the light of fundamental rights protection, ultra vires review or identity review —, only a few have actually conducted such review, and only one has actually declared EU law ultra vires,

111

This is the rule rather than the exception for non-mandatory use of foreign law by courts. See BOBEK, supra note 110, at 196–97. On the comparative method, see PRACTICE AND THEORY IN COMPARATIVE LAW (Maurice Adams & Jacco Bomhoff eds., 2012). 112

In the case of Denmark and Poland, the Treaties under review had already been ratified. This has to do with the particular procedural conditions for standing. 113

Poland (Accession Treaty).

114

Ireland (SEA in Crotty); Latvia (Lisbon); Poland (Lisbon) and Spain (Constitutional Treaty) and Denmark (Maastricht Treaty). The Danish and Polish cases are somewhat peculiar, since the relevant Treaties had entered into force when the courts rendered their decisions. 115

116

Estonia (ESM).

Conseil constitutionnel (Maastricht; Constitutional Treaty); Carlos Closa Montero & Pablo Castillo Ortiz, National Courts and Ratification of the EU Treaties: Assessing the Impact of Political Contexts in Judicial Decisions, in MULTILAYERED REPRESENTATION IN THE EUROPEAN UNION. PARLIAMENTS, COURTS AND THE PUBLIC SPHERE 129 (T. Evas, C. Lord & E. Liebert eds., 2012). These decisions have proven less intrusive on the whole: Upon constitutional amendment, the Treaty could be ratified and is henceforth considered to be constitutional.

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namely the Czech constitutional court in its Holubec decision concerning the Slovak pensions. It should be remembered that courts do not always do as they say, and that their decisions should also be appreciated as “speech acts.” So, just how comparable are the cited decisions and how accurate is the comparison? Surely, in all of them, something is said about constitutional limits to European integration, but not all of them involve ultra vires and identity review of the kind set out by the German Federal Constitutional Court. This makes it difficult at times to fully grasp what the Court implies with the reference and what it was after. Careful analysis shows, that while in most of the cited passages one or more aspects of the German position is indeed expressed, very few cited courts fully endorse the overall position of the Bundesverfassungsgericht. Thus, the position of the Danish Højesteret is comparable on the issue of statehood — Denmark must remain an independent State — and to an extent also on the point that transfers must be limited, but it is much less explicit on a claim of jurisdiction to review. In line with the Danish constitutional traditions, the court chooses to leave much more room to the political branches. The Swedish Instrument of Government is comparable only to the extent that it makes participation in European integration conditional on compliance with “the basic principles by which Sweden is governed”, but it does not so much as mention the competence issue and again it is not very likely, given the Swedish constitutional traditions, that the courts will step in to protect Sweden’s “constitutional identity”. Similarly, the cited passage of the Latvian Court does make mention of unamendable core principles of the Latvian Constitution, and of the right of citizens to decide upon the issues that are substantial for a democratic state, which cannot be affected by a delegation of competences. Yet, on the whole, as we shall see, the position of the Latvian court is much more nuanced than that of the German Court, and shows a great deal of trust in the EU respecting the statehood and fundamental values of the member states. The Irish Crotty case is similar to the German position to the extent that it states that any qualification, curtailment or inhibition of the existing sovereign power under the Constitution requires recourse to the people “whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good”, which is drawn from Article 6 of the Irish Constitution. The Bundesverfassungsgericht probably found the insistence on the need to involve the people resemble its own recourse to the people as the original holders of sovereignty. Yet, in the Irish context, all changes in the exercise of public authority as set out in the Constitution require constitutional amendment, which under the Irish Constitution is always done by referendum. The SPUC v Grogan case, on the other hand, relates to the responsibility of the Irish courts to protect and uphold the constitutionally guaranteed right to life of the unborn, even if EU law and the ECJ should want to balance it against the right to travel in order to receive services. Implicitly and without using the concept, it may touch on the more cultural aspects of “national identity” understood as national value choices that may distinguish a particular member state from most of the rest of the Union, and must remain in its own hands. Only a few of the citations mention the concept of national or constitutional identity explicitly: the French Conseil constitutionnel, the Polish Trybunał

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Konstytucyjny and the Czech Ústavní Soud use the concept. Yet, in the French case, the protection of “identité constitutionnelle” is not absolute to the extent that a constitutional amendment by the parliamentary constitutional legislature may remedy an infringement, and is therefore necessarily different from what the German court has in mind, as explained later. So, it seems that most of the cited decisions do indeed relate to one or two elements in the position of the Bundesverfassungsgericht, but usually they do not match the full amalgam. The Czech and especially the Polish cases come closest to what the Bundesverfassungsgericht has in mind, complete with references to sovereignty, national democracy, national and constitutional identity, ultra vires and identity review, core principles and so forth. So, a brief perusal already shows that the cited passages are quite disparate. In what follows, the passages are analyzed one by one, in the order of appearance in the OMT reference. II. Denmark In the decision to which the Bundesverfassungsgericht refers, the Danish Højesteret was essentially asked whether Denmark could ratify the Maastricht Treaty under Article 20 of the Constitution, or rather, whether the procedure for constitutional amendment under 118 Article 88 was in place. This is striking, as more recently the issue was whether the Lisbon Treaty required the procedure of Article 20 or rather the normal procedure for Treaty ratification under Article 19 of the Constitution. In both cases thus, the Supreme Court was asked to decide whether the choice of procedure for the ratification of an EU Treaty was in accordance with the Constitution. The Bundesverfassungsgericht refers to para 9.8. of the Danish Maastricht decision, in which the Højesteret held that “it must be considered to be assumed in the Constitution that no transfer of powers can take place to such an extent that Denmark can no longer be

117

The reference of the Spanish Constitutional Tribunal is to Article 4(2) TEU’s predecessor in Article I-5 of the Constitutional Treaty and is used to support the holding that the primacy principle in the Constitutional Treaty does not infringe the Constitution. The same is true for the Latvian Court, which read in Article 4(2) TEU a guarantee that the EU would not infringe the statehood and fundamental principles and values of the Latvian Constitution. 118

Article 20 of the Constitution provides that “Powers vested in the authorities of the Realm under this Constitutional Act may, to such extent as shall be provided by statute, be delegated to international authorities set up by mutual agreement with other states for the promotion of international rules of law and cooperation. (2) For the enactment of a Bill dealing with the above, a majority of five-sixths of the members of the Folketing is required. If this majority is not achieved, whereas the majority required for the passing of ordinary Bills is, and if the Government maintains the Bill, it shall be submitted to the electorate for approval or rejection in accordance with the rules on referenda laid down in Article 42.”

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119

considered an independent state.” The Danish Constitution, like the German Basic Law as interpreted by the Bundesverfassungsgericht, thus contains absolute limits to European integration, basically consisting in the condition that Denmark should remain an independent state, which finds a parallel explicitly or implicitly in many national 120 Constitutions and also underlies the EU Treaties. The Højesteret went on to say that “the determination of the limits to this must rely almost exclusively on considerations of a political nature”. The role of the Danish courts in reviewing EU Treaties is apparently rather limited, which is certainly not what the Bundesverfassungsgericht has in mind. One would have expected the Bundesverfassungsgericht to be more interested in another passage in para 9.6., not cited, where the Højesteret stated that The fact that the detailed determination of the powers vested in the institutions of the Community may give rise to doubts, and that the jurisdiction to give rulings concerning the interpretation of such questions is transferred to the EC Court of Justice cannot in itself be regarded as incompatible with the requirement for specification in Section 20 of the Constitution. And that if the extraordinary situation should arise that with the required certainty it can be established that an EC act which has been upheld by the EC Court of Justice is based on an application of the Treaty which lies beyond the transfer of sovereignty according to the Act of Accession, that Danish courts must rule that an EC act is inapplicable in Denmark. This is a clear announcement of ultra vires review, be it that it is restricted to extraordinary situations. 119

Højesteret, Carlsen and Others v. Prime Minister, UfR [1998] 800, reported in English in [1999] 3 COMMON MARKET LAW REPORTS 854. 120

Mainly in constitutions adopted shortly after (re-)gaining independence. Examples include Article 5 of the Irish Constitution and Article 1 of Chapter 1 of the Latvian Constitution. Note that independence is not mentioned in the Danish Constitution, but must be presumed. The TEU also starts from the presumption that it is made up of independent States, as is clear from Articles 48, 49 and 50 TEU, Article 4(2) TEU (the EU respects the equality of member states as well as their national identities and their essential State functions), from the principle of conferral, Article 10, and so forth. Independence and statehood are not mentioned in so many words in the German Basic Law.

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What is even more notable is that the Bundesverfassungsgericht did not cite the recent 121 Lisbon decision of the Danish Supreme Court, handed down in January 2013. In that case, the Danish courts were asked to decide whether the Government had breached the Constitution when it chose to ratify the Lisbon Treaty in accordance with the procedure for ratification of “ordinary” treaties under Section 19 of the Constitution, rather than the special procedure provided in Section 20 relating to treaties transferring competences to a supranational organization. So in a sense, the Lisbon decision is the mirror image of the Maastricht decision: While the latter dealt with the upper limit of Section 20 and how much of a constitutional change it can carry, the former is concerned with the question just how intrusive the amendments to a Treaty have to be before the procedure of Section 20 is warranted. The Højesteret held that after Lisbon the EU would remain an organization consisting of independent, mutually obliged states functioning on the basis of powers delegated by each member state, and found that the changes made to the EU’s organization, working method, voting rules and general administration were not so fundamental that the EU has in effect assumed a new identity. Accordingly, there was no need to use the procedure of Section 20. But the Supreme Court also confirmed and further developed its statements on ultra vires acts, although according to one commentator it spoke more restrictive language than in its Maastricht decision. This same author also expressed his expectation that the Supreme Court, given the Danish judicial 122 traditions, would not actually “take the lead in ruling against the EU.” In addition, the Supreme Court in that decision also developed its views on whether the transfer of sovereignty by the Accession Act contravened the constitutional precondition of a democratic form of government. The Court stated that any transfer of Parliament’s legislative powers to an international organization would entail some intervention in Denmark’s democratic form of government. According to the Supreme Court, this was taken into account when the extensive procedures in Section 20 were designed. Most legislative power in the EU rests with the Council in which the Danish Government sits, and the Government is responsible to Parliament. It is up to the Danish Parliament to decide 123 whether more democratic control of the Government is needed. 121

Højesteret, decision of 20 February 2013, Hausgaard and Others v. Prime Minister, [2013] UfR 1451, available at http://www.hoejesteret.dk/hoejesteret/nyheder/ovrigenyheder/Documents/199-12engelsk.pdf. 122

Henrik Palmer Olsen, The Danish Supreme Court’s decision on the constitutionality of Denmark’s ratification of the Lisbon Treaty, 50 COMMON MKT. L. REV. 1489 (2013) (“Denmark might be among the more skeptic EU members, and this may be reflected in the Courts decision, but the Danish Supreme Court is not known for making watershed decisions, preferring instead a low profile for itself.”). However, Helle Krunke thinks that Danish courts will act as guardians to ensure that the EU institutions interpret the Lisbon Treaty within the limits of the powers delegated to them by Denmark. According to her, this decision opens the door wide for litigation on EU acts, and Danish citizens are more or less invited to file lawsuits against the State challenging aspects of the constitutionality of the Lisbon Treaty. Helle Krunke, The Danish Lisbon judgment Danish Supreme Court, Case 199/2012, Judgment of 20 February 2013, 10 European Constitutional Law Review (EUCONST) 542 (2014). 123

Krunke, supra note 122.

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This may well the reason why the Bundesverfassungsgericht omitted the reference to this decision: It did not really suit its purposes. The Danish Supreme Court is much less restrictive with regard to the transfer of powers than the German Federal Constitutional Court. The Højesteret has not defined “inalienable” policy domains, nor does it emphasize the need to protect national democracy to the same extent. Instead, it respects the Government’s and the Folketing’s constitutional assessment that the Lisbon Treaty does 124 not imply delegation of powers requiring application of the Section 20 procedure. The Supreme Court did not so much as mention the concept of constitutional or national identity. This all fits in the Danish tradition of courts steering away from political decisions 125 and or interfering in the legislative process. The courts only declare legislation unconstitutional if it manifestly breaches the Constitution, and political practice can become a legally binding constitutional convention, which can even alter the Constitution. In short, the Lisbon judgment of the Højesteret expresses a different worldview than that of the Bundesverfassungsgericht. The point on which they do seem to agree — the retention of judicial power to review respect for the vires of EU competences — is not the central issue in the paragraph the Bundesverfassungsgericht referred to. III. Estonia In the decision of the Estonian Riigikohus, the Supreme Court, the central issue was whether the constitutional principle of parliamentary democracy and the Constitution of the Republic of Estonia Amendment Act (CREAA) permitted ratification of the ESM 126 Treaty. In the first paragraph the Bundesverfassungsgericht cites, the Supreme Court en banc held that despite the strict wording of the sovereignty clause of the Constitution the present-day context must be considered in shaping the concept today (para 128). In the second cited paragraph, the Court pondered on what should be done if the ESM Treaty 124

To be sure, Denmark has a number of opt-outs on issues that are sensitive also for the Bundesverfassungsgericht. 125

See Ran Hirschl, The Nordic counternarrative: Democracy, human development, and judicial review, 9 INT’L J. CONST. L. 449 (2011) and other contributions to the same Symposium on Nordic Juristocracy. 126

The CREAA has been enacted as a “separate constitutional act” in order to permit accession to the EU. It has not formally amended the Põhiseadus (Constitution), but has nevertheless substantively amended the entire Constitution. The effects of the CREAA are far reaching: EU law has not only become one of the grounds for the interpretation of the Põhiseadus, but also of its application: only those parts of the Constitution which are in conformity with EU law or which fall outside the scope of EU law are still applicable; the applicability of all the other constitutional provisions is suspended. On the basis of the CREAA, EU law is assimilated with Estonian constitutional law and (temporarily) sets aside any constitutional provision which is incompatible with it; it can also be argued that the CREAA gives EU law primacy (of application) on the Põhiseadus. See Julia Laffranque, A Glance at the Estonian Legal Landscape in View of the Constitution Amendment Act, JURIDICA INT’L 55 (2007/XII); Julia Laffranque, The Constitution of Estonia and Estonia’s accession to the European Union, 1 BALTIC Y.B. INT’L L. ONLINE (2011); Raul Narits, About the Principles of the Constitution of the Republic of Estonia from the Perspective of Independent Statehood in Estonia, JURIDICA INT’L 58 (2009/XVI).

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would be incorporated in primary or secondary EU law (para 223). It held that the CREAA was to be considered as an authorization to be a part of the changing European Union; it did not, however, “authorize the integration process of the European Union to be legitimised or the competence of Estonia to be delegated to the European Union to an unlimited extent”. But it was primarily for the Riigikogu, the Estonian Parliament, to deliberate and decide whether an amendment to the founding Treaties of the European Union or an entirely new EU Treaty would lead to a deepening of the integration process, and thereby to an additional delegation of competences of Estonia to the EU and a more extensive interference with the principles of the Constitution. If so, it was necessary to seek the approval of the holder of supreme power, being the people, and presumably amend the Constitution once again. So in fact, the relevant passages do not mention any reservation of review powers of acts adopted by the EU. It did not hint at ultra vires review or identity review; the word identity is not mentioned. It is likely that the Bundesverfassungsgericht cited these passages of the Estonian decision for the reference to the “holder of supreme power, i.e. the people”. Yet, the situation in which the people should be consulted and the role of the court in this context is very different from what the Bundesverfassungsgericht has set out for the German Basic Law. Nevertheless, it is not excluded, at least theoretically, that secondary EU law can be reviewed in the light of fundamental principles of the Estonian legal order. Article 1 CREAA states that “Estonia may belong to the European Union in accordance with the fundamental principles of the Constitution of the Republic of Estonia”. These fundamental 127 principles are not defined in law, nor in case law, but scholars agree that they include national sovereignty; a state that is based on liberty, justice, and law; the defense of internal and external peace; preservation of the Estonian nationality and culture through the ages; human dignity; the social state; democracy; the rule of law; honoring of fundamental liberties and freedom; and the proportionality of the actions taken under 128 state authority. This list draws on the general provisions of Chapter I of the Põhiseadus (Estonian Constitution), on Article 10 of that Constitution and on the Constitution’s preamble. The fundamental principles, which have been characterized as those values 129 without which Estonia and its Constitution would lose their “essence”, may to a certain extent be compared to German constitutional identity. So then, are the Estonian courts allowed to test EU law against principles belonging to Estonian “constitutional identity”? The possibility of review of secondary EU law is 127

Carri Ginter, Constitutionality of the European Stability Mechanism in Estonia: Applying Proportionality to Sovereignty, 9 EUCONST 335, 340 (2013). 128

Narits, supra note 126, at 62; see also Tanel Kerikmae & Katrin Nyman-Metcalf, Karlsruhe v. Lisbon An Overture to a Constitutional Dialogue from an Estonian Perspective, 12 EUR. J. L. REF. 373, 384–85 (2010); Heinrich Schneider, Constitution in a Blast of Changes, JURIDICA INT’L 4, 11 (2007/XII). 129

Narits, supra note 126, at 62.

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accepted by at least a part of Estonian legal scholarship. Also lower court judges consider it possible “that an act of (…) secondary Community law can be set aside in a national court 130 procedure” on the basis of Article 152 Põhiseadus. This constitutional provision prescribes that the “courts shall not apply and that the Supreme Court shall declare invalid” 131 any legislation which conflicts with “the provisions and spirit of the Constitution”. The position of the Supreme Court on the matter is not clear. On the one hand, the Court has ruled that “only that part of the Constitution is applicable, which is in conformity with the EU law or which regulates the relationships that are not regulated by the EU law”, without 132 even hinting to any exception with regard to the fundamental principles. Similarly, the Supreme Court refuses to review an act of parliament implementing EU law on referral by a lower court if the lower court has not first established that the act is not mandated by EU law. The reason is that the Supreme Court would otherwise subject secondary EU law to a constitutionality test, which would be contrary to both the case law of the Court of Justice 133 and Article 2 of the CREAA. On the other hand the Supreme Court has stated that “as a rule, the courts are not competent to review the constitutionality of the EU law”, thus perhaps leaving the possibility of such review open in exceptional cases. It would seem, therefore, that review of the constitutionality of secondary EU law is a “rather theoretical 134 and emotional” possibility. So whether or not Estonian courts will assume the competence to review secondary EU law remains to be seen. For the time being, the Estonian Supreme Court while indicating that there are limits to what can be transferred, and that there may be situations in which Treaty amendment (and possibly even secondary EU law?) require constitutional amendment and involvement of the holder of sovereignty, has not announced a stringent ultra vires and identity review, but rather has demonstrated a realistic view of the consequences of membership of the Union on national sovereignty.

130

Ivo Pilving (Tallinn Circuit Court) & Villem Lapimaa (Tallinn Administrative Court), ANNUAL MEETING OF BEAULIEU-SUR-MER, (MARCH 10–11, 2006) ESTONIAN REPORT, under A, available at http://www.aeaj.org/index.php/en/independence-efficiency/events/beaulieu-sur-mer-2006/40-doc-beaulieu2006/153-meeting-beaulieu-sur-mer-10-11-march-2006-estonia. ADMINISTRATIVE JUDGES,

131

“In a court proceeding, the court shall not apply any law or other legislation that is in conflict with the Constitution. The Supreme Court shall declare invalid any law or other legislation that is in conflict with the provisions and spirit of the Constitution.” Põhiseadus Art. 152. 132

Opinion 3–4–1–3–06 of the Constitutional Review Chamber of the Supreme Court of 11 May 2006, para. 16 .

133

Opinion. 3–4–1–5–08 of the Constitutional Review Chamber of the Supreme Court of, 26 June 2008, para. 29– 31. 134

Pilving & Lapimaa, supra note 130, under A (emphasis added).

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IV. France The two passages from decisions of the Conseil constitutionnel do, on the other hand, concern indirect review of secondary EU law, and they do contain the concept of constitutional identity. In both cases, the constitutionality of a French loi implementing an 135 EU directive was challenged. In the second case, the applicants argued that the implementing legislation was manifestly incompatible with the directive it was intended to transpose. The Conseil decided that implementation of EU directives is a constitutional obligation ex Article 88-1 of the Constitution which it would enforce, but that its competence to do so was subject to a twofold limit: first, the transposition of a directive could not run contrary to a rule or principle that was inherent in the constitutional identity of France, unless the constituent power has consented to it, and secondly, that because it cannot make a reference to the ECJ given the time constraints it works under, it would only be able to rule that a legislative provision was incompatible with Article 88-1 of the Constitution if it was manifestly incompatible with the directive that it is intended to transpose. In any case, it was for the ordinary and the administrative courts to review the compatibility of the law with France's European commitments and if need be, make a reference. The first limit may give rise to a review of the constitutionality of a directive, but it has been described, notably by a member of the Conseil constitutionnel, as an option 136 that is “assez théorique.” The identité constitutionnelle de la France is shrouded in mystery. It is not clear whether the review extends to other types of secondary EU law than directives, and what the 137 concept really entails. So far, no piece of EU law has been found to run counter to French constitutional identity and the notion has not been clarified, which seems to be 138 intentional. The most revealing ruling so far is the 2004 Bioethics decision, in which the Conseil constitutionnel refused to test a provision in a loi implementing a directive against Article 11 of the Declaration of the Rights of Man and Citizens of 1789 — freedom of 135

Conseil constitutionnel [CC] [Constitutional Council] decision no. 2006–540DC, July 27, 2006 (Loi relative au droit d'auteur et aux droits voisins dans la société de l'information in Conseil constitutionnel) ; Conseil constitutionnel [CC] [Constitutional Council] decision no. 2011–631DC, June 9, 2011 (Loi relative à l'immigration, à l'intégration et à la nationalité) . In fact, the Bundesverfassungsgericht cites only paragraph 19 of Decision no. 2006–540DC of 27 July 2006; paragraph 35 of Decision no. 2011–631DC, which it also cites is identical to paragraphs 19 and 20 of Decision no. 2006–540DC of 27 July 2006. 136

O. Dutheillet de Lamothe, Le contrôle de conventionnalité (intervention lors de la visite à la Cour constitutionnelle italienne le 9 mai 2008), available at www.conseil-constitutionnel.fr. 137

On the difference between the French and German concepts, see Jan-Herman Reestman, The Franco-German Constitutional Divide. Reflections on National and Constitutional Identity, 5 EUCONST 374 (2009). 138

The current president of the Constitutional Council, Jean-Louis Debré, wrote on the notion of French constitutional identity that “le Conseil constitutionnel s’est toujours bien gardé d’en définer précisément le contenu.” MILLET, supra note 83, at xii.

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expression —, because this freedom is also protected by Article 10 ECHR,and hence also in the EU legal order. Accordingly, it was for the ECJ to the rule on potential intrusions on the 139 freedom. The idea behind the reasoning seems to be that if a (constitutional) rule or principle is common to both legal orders, it is not part of the French constitutional identity. On this view French “constitutional identity” refers to those French constitutional rules and principles which are specific to France, i.e., those that are protected in the French legal order but not also in the EU’s legal order. In this sense, the French constitutional identity is defined by the constitutional “exception française” in relation to the Union. The principle of laïcité, the definition of the persons entitled to vote in French political elections, the prohibition to give specific rights to ethnic, linguistic and other minorities and the definition of the criteria for access to public functions have been offered as examples of 140 this identity. If this is indeed the way the Conseil constitutionnel interprets French constitutional identity, its scope is much narrower than German Verfassungsidentität. Yet, it has also been argued that the scope of French constitutional identity is broader and encompasses for instance the principles to which Article 89(5) Constitution, the French 141 equivalent of Article 79(3) GG, refers. That provision provides that the “republican form of government” may not be amended. Here another fundamental difference with German Verfassungsidentität comes to light: The French parliamentary constitutional legislature can consent to deviations from or 142 changes to the “constitutional identity”. In this respect, the Conseil constitutionnel does not distinguish between constitutional acts which are approved by the people in a referendum and those approved by Congrès — the joint meeting of both houses of 143 parliament: The Council is not competent to review either. French constitutional identity 139

Conseil constitutionnel [CC] [Constitutional Council] decision no. 2004–498DC, July 29, 2004, paras. 4–7. According to the “official” Commentaire in LES CAHIERS DU CONSEIL CONSTITUTIONNEL nos. 17, 29, “Les seules normes constitutionnelles opposables à la transposition d’une directive communautaire sont les dispositions expresses de la Constitution française et propres à cette dernière.” 140

See also Bertrand Mathieu, Les rapports normatifs entre le droit communautaire et le droit national. Bilan et incertitudes relatifs aux évolutions récentes de la jurisprudence des juges constitutionnel et administratif français, REVUE FRANÇAISE DE DROIT CONSTITUTIONNEL 675 (2007/4); THIERRY S. RENOUX & MICHEL DE VILLIERS, CODE CONSTITUTIONNEL 2011 870 (2011); the “official” comment on the decisions of 10 June 2004 and 29 July 2004, supra note 139, at 17, 28–29. 141

Jean Pierre Camby, Le Conseil constitutionnel, L’Europe, son droit et ses juges, REVUE DE DROIT PUBLIC 1216, 1222–23 (2009/4); Chloé Charpy, The Status of (Secondary) Community Law in the French Internal Order: the Recent Case-Law of the Conseil constitutionnel and the Conseil d’Etat, 3 EUCONST 436, 445–46 (2007). 142

This is probably even the case with Article 89(5) Constitution. Although the constituent power has to respect the provision (as long as it exists), the Conseil constitutionnel has also indicated that the constituent power is sovereign and thus competent to amend or repeal the provision as it sees fit, if it wants to even implicitly; Conseil constitutionnel [CC] [Constitutional Council] decision no. 92–312DC, Sept. 2, 1992, para. 19. 143

Conseil constitutionnel [CC] [Constitutional Council] decision no. 2003-469DC, March 26, 2003, paras. 2–3 (concerning a constitutional amendment adopted by the Congrès). In earlier case law the Conseil constitutionnel had already made clear that it has no power to rule on texts adopted by the people in a referendum, Conseil

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is necessarily very different, therefore, from German Verfassungsidentität which is beyond the reach of the constitution-amending power. So, while it is understandable that the Bundesverfassungsgericht cites the Conseil constitutionnel, one should not lose sight of the fact that both concepts are very different. Strikingly, also, the Conseil constitutionnel had indicated that given the time constraints it is in under in the context of proceedings under Article 61 of the Constitution (one month), it would not be able to make references. This may be taken as a refusal to enter into negotiations with the ECJ, just as the Bundesverfassungsgericht has announced that it will not negotiate with the Court of Justice on constitutional identity: “the protection of the 144 latter is a task of the Federal Constitutional Court alone”. Nevertheless, in Jeremy F, the Conseil has in the meantime made such reference, questioning the compatibility of the 145 EAW with the rights of defence, be it in the context of a question prioritaire de constitutionnalité (QPC), in which it has three months to decide. While the reference did not amount to “negotiating constitutional identity”, the smooth procedure and the ECJ’s responsiveness to the concerns of the Conseil constitutionnel may convince the latter to change also its position on references in Article 61 types of cases. V. Ireland The citations of the Irish cases are rather puzzling. Crotty was essentially concerned with the question whether the ratification of the Single European Act (SEA) required constitutional amendment by referendum, or could be seen as “necessitated by membership” and would therefore have to be considered as already agreed to by the people when they agreed to the Accession Treaty in 1972. The Supreme Court decided that a constitutional amendment would be called for if the amending Treaty altered the “essential scope or objectives” of the Communities. As the SEA also included provisions on foreign policy, which had not been the subject of the original approval of the Accession Treaty, the SEA had to be subjected to a referendum: the Government which had been endowed with foreign policy could not, within the terms of the Constitution, agree to impose upon itself, the State or upon the people the contemplated restrictions upon freedom of action. Once the required popular authorization has been given, the Irish Constitution is particularly open to EU law, and provides both EU law and national acts necessitated by the obligations of membership with constitutional immunity. Again, the

constitutionnel [CC] [Constitutional Council] decision no. 62-20DC, Nov. 6, 1962 ; Conseil constitutionnel [CC] [Constitutional Council] decision no. 92-313DC, Sept. 23, 1993 . 144

145

BVerfG, Case No. 2 BvR 2728/13 at para. 29.

See on that case, François-Xavier Millet, How much lenience for how much cooperation? On the first preliminary reference of the French Constitutional Council to the Court of Justice, 51 COMMON MKT. L. REV. 195 (2014).

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case is thus far removed from any type of ultra vires or identity review described by the Bundesverfassungsgericht in its OMT reference. The relevance of the Crotty decision in this context is therefore not entirely clear. Possibly, the Bundesverfassungsgericht was eager to condone the “going back to the people as the original holders of sovereignty”. But, the Irish constitutional context is very different from the German, as any constitutional amendment requires a referendum. Moreover, the Constitution does not seem to contain an immutable core that would be beyond the reach of the Irish people in a referendum: no constitutional provision is immune for amendment, and no organ of the State, including the Supreme Court, is competent to review or nullify a 146 decision of the people to amend the Constitution. The second Irish case cited by the Federal Constitutional Court is the well-known case of SPUC (Ireland) Ltd. v. Grogan relating the information student organizations distributed on abortion services provided in the UK. This case was probably cited because it can be seen as dealing with a “national identity” issue avant la lettre: The right to life of the unborn which must according to Justice Finlay in the Supreme Court “be fully and effectively protected by the courts.” The consequence of a decision of the ECJ on these constitutionally guaranteed rights and their protection by the courts would have to be considered by Irish courts. The right to life would not be balanced against other interests: No Community law regarding services could outweigh the right to life of the unborn. This is therefore a case of a national court claiming jurisdiction to protect a dearly held principle of the national Constitution. It also reflects the “we do not negotiate” position: The Constitution contains no explicit limits to European integration, but even such constitutional immunity cannot prevent the courts from protecting the most dearly held principles of the Irish Constitution. In fact, it was Walsh J who worded it most clearly in SPUC v Grogan — in a passage not cited by the German court — where he said that “ . . .it cannot be one of the objectives of the European Communities that a member state should be obliged to permit activities which are clearly designed to set at nought the constitutional guarantees for the protection within the State of a fundamental human right.” Nevertheless, it must not be forgotten that the ECJ in SPUC v Grogan avoided a balancing exercise by declaring the link with EU law insufficient. In order to avoid any future conflicts between free movement and the right to life of the unborn, the Irish 147 Government managed to have Protocol 17 attached to the TEU. So, the Irish abortion 146

147

Re Article 26 and the Information (Termination of Pregnancy) Bill 1995, [1995] 1 I.R. 1 .

“Nothing in the Treaty on the European Union or in the Treaties establishing the European Communities or in the Treaties or Acts modifying or supplementing those Treaties shall affect the application in Ireland of Article 40.3.3o of the Constitution of Ireland.” In June 2009, after the failed referendum on the Lisbon Treaty, the European Council adopted a Decision on the concerns of the Irish people on the TEU, giving a legal guarantee that certain matters of concern to the Irish people would be unaffected by the entry into force of the Treaty of Lisbon. The Protocol on the concerns of the Irish people on the Treaty of Lisbon, relating to right to life, family and education, taxation and security and defense was added to the TEU at the occasion of Croatian accession.

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saga can also be interpreted as an example of how the EU and its member states together manage to protect the national identity of a member state and take account of national peculiarities and constitutional and societal sensitivities. In such circumstances, there is no need for unilateral action. VI. Italy As said, the reference to the case law of the Italian Corte costituzionale is limited to the reference to two entire cases with no paragraphs specified. Frontini is the landmark case (already cited in Solange I), in which the Corte costituzionale held that on the basis of Article 11 of the Constitution, Italian sovereignty had been limited. In the field of EU competence, functions were exercised by the EU institutions, following EU forms and procedures, and according to EU guarantees: The EU was not required to operate through Italian forms or with Italian guarantees, such as judicial review by the Constitutional Court. Every EU activity concerning a matter coming within its sphere of competence was valid if EU procedures and guarantees were observed. Yet, the EU was not empowered to infringe fundamental constitutional principles or fundamental rights — “i principi fondamentali del 148 nostro ordinamento costituzionale e i diritti inalienabili della persona umana”. Should the EU be so empowered, Italian sovereignty would be effectively nullified, which Article 11 of the Constitution does not allow. In such a case, Italian membership of the EU would be forbidden under the Constitution. Frontini is probably the first example of a constitutional court insisting on a constitutional core in the context of European integration, so it is no wonder that the Bundesverfassungsgericht includes it in its references. Yet, the Corte in that case rejected jurisdiction to review the constitutionality of secondary law and declare it inapplicable in concrete cases. Moreover, it has never declared EU law or its application unconstitutional, nor has it, until this day, clarified what the principi fondamentali del nostro ordinamento costituzionale actually are. The reference to Giampaoli is puzzling. One would have expected a reference to FRAGD, the real landmark case in which the Corte Costituzionale further refined its position on EU 149 law in the domestic legal order, and challenged the authority of the Court of Justice as 150 the ultimate protector of fundamental rights in EU law. Giampaoli is mostly known for the fact that the Corte costituzionale in an obiter dictum confirmed its capacity to make 148

Corte costituzionale (Constituional Court), 27 December 1973, n. 183/1973 (Frontini).

149

In addition to decision no. 170/1984 of 8 June 1984 (Granital) where the Italian Court finally endorsed the mandate of the ordinary courts under EU law and permitted the disapplication of conflicting norms of national law without its prior intervention in a preliminary reference on constitutionality. 150

Corte costituzionale (Constitutional Court), 21 April 1989, n. 232/1989 (FRAGD) (discussed by G. Gaja, New developments in a continuing story: the relationship between EEC law and Italian law, 27 COMMON MKT. L. REV. 83 (1990); HG Schermers, The scales in balance: national constitutional court v Court of Justice, 27 CMLREV. 97 (1990)).

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preliminary references to the ECJ, but then decided against making such reference and 151 interpreted Community law autonomously. VII. Latvia The cited paragraphs of the Lisbon decision of the Latvian constitutional court are comparable to those of the other courts that have been asked to review whether the Lisbon Treaty complies with the core principles of the Constitution. The Constitutional Court acknowledged that Latvia was based on fundamental values including basic rights and fundamental freedoms, democracy, sovereignty of the State and people, separation of powers and rule of law. The State had the duty to guarantee these values which could not be infringed by introducing amendments to the Satversme (Constitution). Consequently, a delegation of competences could not infringe the rule of law and the basis of an independent, sovereign and democratic republic based on the basic rights and could not influence the right of citizens to decide upon the issues that are substantial for a democratic state. The Court therefore had to assess whether the Lisbon Treaty affected the sovereign power of the State of Latvia, vested in the people of Latvia, and found that it did not. The cited passage relates only to the transfer of competences at the time of Treaty amendment. The Latvian constitutional court did mention an unamendable core of the Latvian constitution and did state that a delegation of competences cannot influence the right of citizens to decide upon the issues that are substantial for a democratic state. But there is no allusion to ultra vires review and no mention of identity review of secondary EU law. VIII. Poland The Trybunał Konstytucyjny (the Polish Constitutional Court) probably comes closest to the position of the Bundesverfassungsgericht. The Bundesverfassungsgericht cited three decisions of the Trybunał Konstytucyjny: on the Accession Treaty, on the Lisbon Treaty and on the Brussels Regulation. The first two, therefore, concerned the constitutionality of EU 152 Treaties, while the third dealt with the constitutionality of secondary EU law. In none of the decisions did the Trybunał find inconsistencies with the Constitution. 151

Four years later however, the Constitutional Court reversed that declaration and ordered a general court to make a preliminary reference since the Constitutional Court did not regard itself as a court in sense of Article 234(3) of the Treaty. Today, the Corte costituzionale does refer questions for preliminary ruling to the ECJ, see Corte costituzionale (Constitutional Court), 11 May 2008, n. 103/2008; Corte costituzionale (Constitutional Court), 3 July 2013, n. 207/2013. 152

Trybunał Konstytucyjny, decision K 18/04 of 11 May 2005 (Accession Treaty); decision K 32/09 of 24 November 2010 (Lisbon Treaty) (the cases were brought after the entry into force of the Treaty); decision SK 45/09 of 16 November 2011 (Brussels Regulation) (Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters).

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In the first Accession Treaty decision, it took the opportunity to express its views on the relationship between domestic and European law, stating unambiguously that the Constitution enjoys supremacy within the territory of the Republic of Poland and that this 153 remains unaffected by Poland entering the EU. The Bundesverfassungsgericht in its OMT decision cited two paragraphs: One in which the Trybunał stated that the Constitution prohibits a conferral of all the competences of a given organ of the state, a conferral of competences in relation to all matters in a given field as well as the conferral of the competences in relation to the essence of the matters determining the remit of a given state organ (para 4.2.) and then, the paragraph where it stated that the ECJ is the primary, but not the sole interpreter of EU law. The ECJ should act within the scope of transferred powers and should respect the principle of subsidiarity. Furthermore, the principle of mutual loyalty imposed a duty for the ECJ to be “sympathetically disposed towards the national legal systems” and a duty for the member states to show the highest standard of respect for EU norms. The Bundesverfassungsgericht’s references to the decisions on the Lisbon Treaty and the Brussels Regulation are more extensive, with virtually the entire Lisbon decision being 154 cited. In that decision, the Trybunał drew heavily on the jurisprudence of the Bundesverfassungsgericht and discussed such fundamental issues as sovereignty — understood as the confirmation of the primacy of the Polish Nation to determine its own fate — and its attributes; Kompetenz Kompetenz; constitutional identity — described as reflecting the values the Constitution, as “a concept which determines (…) the matters which constitute (...) "the heart of the matter", i.e. are fundamental to the basis of the 155 political system of a given state” — as well as essential state functions, and ultra vires review. The Trybunał also pointed out that the concepts of constitutional identity and of national identity are closely related, whereby the latter “also includes the tradition and culture.” It added that one of the objectives of the European Union, indicated in the Preamble of the Treaty on European Union, is to satisfy the desire “to deepen the solidarity between their peoples while respecting their history, their culture and their

153

See generally K. Kowalik-Bańczyk, Should We Polish It Up? The Polish Constitutional Tribunal and the Idea of Supremacy of EU Law, GERMAN L.J. 1357 (2005). 154

155

The reference is to n. 2.1. et seq., i.e. about forty pages of the decision.

Excluded from conferral are: decisions specifying the fundamental principles of the Constitution and decisions concerning the rights of the individual which determine the identity of the state, including, in particular, the requirement of protection of human dignity and constitutional rights, the principle of statehood, the principle of democratic governance, the principle of a state ruled by law, the principle of social justice, the principle of subsidiarity, as well as the requirement of ensuring better implementation of constitutional values and the prohibition to confer the power to amend the Constitution and the competence to determine competences.

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traditions.” The reasoning strongly resembles the jurisprudence Bundesverfassungsgericht, with the exceptions pointed out by the Trybunał:

of

the

(..) the vital differences between the Constitution of the Republic of Poland and the Basic Law for the Federal Republic of Germany, when it comes to regulating the systemic foundations of European integration. It is the task of the Polish constitutionmaker and legislator to resolve the problem of democratic legitimacy of the measures provided for in the Treaty, applied by the competent bodies of the 157 Union. Strikingly, like the Bundesverfassungsgericht, the Trybunał placed itself in a league of constitutional courts that had reviewed the constitutionality of the Lisbon Treaty — along with the courts in the Czech Republic, Germany and Hungary, France and Austria. The relevant decisions have in common, so the Trybunał argued, an emphasis on the openness of the constitutional order with regard to European integration, combined with a focus on the significance of constitutional and systemic identity — and thus sovereignty — of the member states. The Court added that if the Treaty of Lisbon entered into force, the EU would remain an association of sovereign states, and not a federation, and that the member states of the Union, an international organization, would retain full sovereignty and remain the “masters of the treaties”. The limits of permitted development of the Union were set by the circumstances where the member states would begin to lose their 158 constitutional identity. Overall, the reasoning strongly resembles the jurisprudence of 159 the Bundesverfassungsgericht. The third cited decision of the Polish constitutional court was the first,and so far only, in which it actually directly reviewed the constitutionality of secondary EU law. The Trybunał essentially rejected the claims and stated that the Regulation was not unconstitutional. The Bundesverfassungsgericht cited paragraphs 2.4. and 2.5., where the Trybunał distinguished the respective roles of the ECJ — safeguarding EU law — and of the constitutional court — safeguarding the Constitution —, and emphasized the need for due caution and restraint when examining the conformity of EU secondary legislation to the Constitution. It seemed irreconcilable with the principle of loyalty laid down in Article 4(3) 156

Para 2.1. in fine.

157

Para 2.6.

158

Para 3.8.

159

With a touch of malignance one could say that the BVerfG refers to itself (speaking through the Polish Trybunał).

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TEU to grant powers to particular member states to declare EU law to be no longer legally binding. But then the Trybunał proceeded to say that By contrast, within the meaning of Article 4(2) of the TEU, the Union shall respect the national identities of the Member States, inherent in their fundamental structures, political and constitutional. National identity and constitutional identity, which is the essential component thereof, have already been discussed by constitutional courts, including the Constitutional Tribunal (cf. the aforementioned judgment in the case K 32/09). Also the Court of Justice makes reference in its jurisprudence to the necessity to take into account the national identities of particular 160 Member States. Interestingly, although it considers “national identity” as broader than “constitutional identity”, the Trybunał seems to consider the review of constitutional identity under national law and of national identity under EU law to go “hand in hand”, and apparently Sayn-Wittgenstein did not make it change its opinion. The Trybunał also explains what the consequences would be of a declaration that an EU act infringes the Constitution. In such a case, the relevant act would be inapplicable in Poland, but more importantly, it acknowledged that this would amount to a violation of Poland’s international obligations, and hence this should happen only as “ultima ratio.” Three choices would then be available to Poland: amend the Constitution, or take measures aimed at amending the EU provisions, or withdraw from the European Union. That decision should be made by the Polish sovereign, the Polish Nation, or the organ of the state which, in accordance with the Constitution, may represent the Nation. What the Bundesverfassungsgericht fails to mention, is that towards the end of its decision, the Trybunał seems to suggest that challenges against EU secondary law could in the future only concern fundamental rights issues, not ultra vires claims, and that applicants would have to make probable that the challenged act of EU secondary legislation causes a considerable decline in the standard of protection of rights and freedoms, in comparison with the standard of protection guaranteed by the Constitution.

160

Compare Sayn-Wittgenstein, Case C-208/09 with Runević-Vardyn, Case C-391/09.

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IX. Sweden Article 6 of Chapter 10 of the Swedish Instrument of Government similarly seems to apply mainly, if not exclusively, to Treaty amendments. The provision received its present form in 2002 and reads: Within the framework of European Union cooperation, the Riksdag may transfer decision-making authority which does not affect the basic principles by which Sweden is governed. Such transfer presupposes that protection for rights and freedoms in the field of cooperation to which the transfer relates corresponds to that afforded under this Instrument of Government and the European Convention for the Protection of Human Rights and Fundamental Freedoms. The expression “the basic principles by which Sweden is governed” relates to the provisions of the first Chapter of the Instrument of Government, defining the principles of democracy, rule of law (legality), equality, minority protection and indicating the most important constitutional organs. Article 6 of Chapter 10 is usually taken to mean that the first Chapter of the Instrument of Government should not be rendered meaningless by the transfer of powers to the EU, and may thus be understood as expressing a constitutional core which is protected also in the context of European integration. It is considered to imply that the Riksdag must remain the primary organ of the State and a transfer of 161 legislative power may not substantially diminish parliamentary powers. During the preparation of the provision, it was made clear that it was addressed to the legislature, and not to courts and other bodies. If a court or administrative authority would find the transfer contrary to the Constitution, they would still have to apply the relevant EU law. The question whether courts could declare EU law ultra vires was raised but not 162 answered conclusively. The Committee that prepared the 2012 constitutional reform, however, found that the Constitution does not reserve the power to review that EU law is ultra vires to Parliament. It further held that it could not be argued that compliance with transfer conditions could only be assessed on the basis of the situation at the time of the transfer decision. In other words, it was considered “not impossible” that questions concerning the constitutional conditions to a transfer of powers may be subject to examination in a Swedish court, although it was thought this question would only arise “if very special circumstances exist, such as in the less probable situation that the EU

161

SOU 2008: 125/153, 492.

162

SOU 2008: 125/ 153, 494.

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freedoms protection was greatly weakened.” Yet, in light of the Swedish traditions on 164 constitutional review, it is not likely that the courts will easily engage in such review. For the time being, the provision has played a role only at times of Treaty amendments. X. Spain As was the case for the decisions of the Italian Corte costituzionale, the Bundesverfassungsgericht did not specify any particular passages of the Declaración of the Spanish Tribunal Constitucional on the Constitutional Treaty. So what could be the relevant 165 elements of that Declaration that the Bundesverfassungsgericht is drawing on? In its Declaration, the Tribunal stated that the operation of the transfer of the exercise of competences to the EU and the consequent integration of EU legislation into Spanish law imposed unavoidable restrictions on the sovereign powers of the State, which were acceptable only when European legislation was compatible with the fundamental principles of the social and democratic state governed by the rule of law established by the national Constitution. Consequently, the transfer enabled by Article 93 of the Constitution was subject to substantive limits. These limits, which are not expressly provided in the provision, were implicit in the Constitution and included respect for the sovereignty of the State, its basic constitutional structures and the system of fundamental principles and values set forth in the Constitution, where the fundamental rights acquire their own 166 substantive nature (Article 10.1 CE). Regarding the primacy of EU law, the Tribunal remarked that the European legal order was constructed upon common values of the EU member states’ Constitutions and their constitutional traditions. This lead the Tribunal to point out that it is EU law that would guarantee, through a series of devices foreseen in the Treaties, respect for basic 167 constitutional structures in each country, including fundamental rights. As a result, the Court stated that upon the entry in to force, the Treaty rather than the Constitution would be the framework of validity of European legislation, even though the Constitution requires

163

Id. at 500.

164

See, e.g., Thomas Bull, Judges without a Court—Judicial Preview in Sweden, in THE LEGAL PROTECTION OF HUMAN RIGHTS: SKEPTICAL ESSAYS (Tom Campbell, KD Ewing & Adam Tomkins eds., 2011); Carl Lebeck’s, Sweden, in THE NATIONAL JUDICIAL TREATMENT OF THE ECHR AND EU LAWS - A COMPARATIVE CONSTITUTIONAL PERSPECTIVE (Giuseppe Martinico & Oreste Pollicino eds., 2010). 165

While the Constitutional Treaty never entered into force, the conception of the relations between the EU and its member states developed therein remain valid, as is evident from the Tribunal’s final decision in Tribunal Constitucional, Feb. 13, 2014 (DTC 26/2014) (Melloni). 166

Tribunal Constitucional, Dec. 13, 2004 (DTC 1/2004, ground 2) (Constitutional Treaty) .

167

Tribunal Constitucional, Dec. 13, 2004 (DTC 1/2004, ground 3) (Constitutional Treaty).

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that the legislation accepted as a result of the transfer be compatible with its basic values 168 and principles. Consequently, the Tribunal was not entitled to check the validity of the law adopted by European institutions; this control was to be carried out by the ECJ, for instance on preliminary references on validity. It was basically through these procedures that the ECJ guarantees and effectively safeguards a high level of protection for the fundamental rights contained in the Charter. Nonetheless, the Constitutional Court also held that in the unlikely case where, in the ulterior dynamics of the legislation of the EU, said law is considered irreconcilable with the Spanish Constitution, without the hypothetical excesses of the European legislation with regard to the European Constitution itself being remedied by the ordinary channels set forth therein, in a final instance, the conservation of the sovereignty of the Spanish people and the given supremacy of the Constitution could lead this Court to approach the problems which, in such a case, would arise. Under current circumstances, said problems are considered inexistent through the corresponding constitutional 169 procedures. Accordingly, the Tribunal did reserve for itself in “unlikely cases” of “hypothetical excesses” some competence to act. It did not speak of “ultra vires” issues, but probably more of “constitutional identity” type cases, though the Tribunal did not mention the concept in this sense. It did, however, make reference to the EU law concept of national identity in the then Article I-4 of the Constitutional Treaty (now Article 4(2) TEU) as an aid to interpret the primacy provision in that same Treaty, along with Article I-2 Constitutional Treaty (now Article 2 TEU) as well as what is now Article 53 of the Charter. These provisions confirmed the guarantee of the continued existence of the states and their basic structures, as well as their values, principles and fundamental rights. The Tribunal concluded that the competences whose exercise was transferred to the EU could not, without a violation of the Treaty itself, act as a foundation for the production of European regulations whose content was contrary to the values, principles or fundamental rights of the Spanish Constitution. The Declaration can be seen as expressing a great trust in the mechanisms and principles provided in EU law and the expectation that the EU would respect of the constitutional core of the member states.

168

Tribunal Constitucional,, Dec. 13, 2004 (DTC 1/2004, ground 2) (Constitutional Treaty).

169

Tribunal Constitucional, Dec. 13, 2004 (DTC 1/2004, ground 4) (Constitutional Treaty).

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Even if the Tribunal did reserve for itself some review power, the Declaration cannot really be read as a serious threat to the applicability of EU law in Spain. Indeed, the Spanish Tribunal has never acted on such power. And in the recent Melloni decision, the Tribunal went along with the ECJ and adapted its standard of protection even for cases outside the 170 scope of EU law. XI. Czech Republic The decision that come closest to what the Bundesverfassungsgericht seems to have in mind — along with the three decisions of the Polish Constitutional Court — is the Holubec decision of the Czech Constitutional Court, also known as the Slovak Pension case. Nevertheless, it is submitted that the decision of the Czech Ústavní Soud — in which it effectively declared the ECJ judgment in Landtová ultra vires — should not be seen as 171 representative of that court’s general position. Holubec is a decision rendered by a court that found itself caught in a domestic conflict with the Czech Government and the highest Administrative Court over entitlements to special supplements for Czech pensioners on 172 Slovak pensions, which the Ústavní Soud had based on the Czech Constitution. When the ECJ decided that that position was contrary to EU law in so far as these supplements were granted exclusively to Czech nationals, the Ústavní Soud, in another case, declared that it 173 had to test the judgment of the ECJ in light of the standards it had set out earlier. In its Lisbon decisions it had held that it would review the exercise of transferred competences by European Union bodies in three situations: the non-functioning of its institutions; the protection of the material core of the Constitution, and, finally, the functioning as ultima ratio, i.e. the authority to review 170

Tribunal Constitucional, Feb. 13, 2014 (DTC 26/2014) (Melloni) (decision handed after the OMT reference of the Bundesverfassungsgericht); on this decision, see Aida Torres Perez, Melloni in Three Acts: From Dialogue to Monologue, 10 EUCONST 308 (2014). 171

See also Ladislav Vyhnánek, The Eternity Clause in the Czech Constitution as Limit to European Integration. Much Ado About Nothing?, 9 INT’L CONST. L. J. 240 (2015). 172

On the decision and its context, see Michal Bobek, Landtová, Holubec, and the Problem of an Uncooperative Court: Implications for the Preliminary Rulings Procedure, 10 EUCONST 54 (2014); Jan Komarek, Czech Constitutional Court Playing with Matches: the Czech Constitutional Court Declares a Judgment of the Court of Justice of the EU Ultra Vires; Judgment of 31 January 2012, Pl. ÚS 5/12, Slovak Pensions XVII, 8 EUCONST 323 (2012). Very few commentators—except perhaps for the president of the German Bundesverfassungsericht— have commented positively on the decision. See Andreas Vosskule, Bewahrung und Erneuerung des Nationalstaats im Lichte der Europäischen Einigung, speech held at the Hessischen Landtag in Wiesbaden (Mar. 1, 2012). 173

Ústavní soud České republiky 26.11.2008 (ÚS) [decision of the Constitutional Court of Nov. 26, 2008] ÚS 19/08 [hereinafter Lisbon I]; Ústavní soud České republiky 3.11.2009 (ÚS) [decision of the Constitutional Court of Nov. 3, 2009] ÚS 29/09 [hereinafter Lisbon II].

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whether an EU act exceeded the powers that the Czech Republic transferred to the EU under Article 10a of the Constitution; these could be, in particular, abandoning a value identity and exceeding the scope of the entrusted competences. In Holubec the Ústavní Soud stated that the ECJ had omitted to familiarize itself with the arguments developed by the Constitutional Court and the constitutional identity of the Czech Republic, which it drew from the common constitutional tradition with the Slovak Republic, “that is from the over seventy years of the common state and its peaceful dissolution, a completely idiosyncratic and historically created situation that has no parallel 174 in Europe”. And so the Czech constitutional court became the first to declare EU law, more particularly a judgment of the ECJ, ultra vires. In previous cases, however, the constitutional court had been much less proactive. It had 175 indeed rejected the absolute primacy of EU law and emphasized the constitutional limits of the Czech participation in European integration. But it refused to formulate a catalogue of non-transferrable powers and authoritatively determine substantive limits to the transfer of powers and to define the term “sovereign, unitary and democratic state governed by the rule of law, founded on respect for the rights and freedoms of the man and of citizens” once and for all. This, the Court held, should be left primarily to the legislature to specify, because this is a priori a political question, which provides the 176 legislature wide discretion. With the clear exception of the Holubec decision, the Czech 177 constitutional court has been very cooperative. XII. Other Member States An obvious omission in the list of references in the OMT order for reference of the Bundesverfassungsgericht, concerns the United Kingdom. This omission is comprehensible: The exceptionalism of UK constitutional law makes any comparison difficult. Moreover, the 174

It concluded, “In a situation where the ECJ was aware that the Czech Republic, as a party to the proceeding, in whose name the government acted, expressed in its statement a negative position on the legal opinion of the Constitutional Court, which was the subject matter for evaluation, the ECJ’ statement that the Constitutional Court was a ‘third party’ in the case at hand cannot be seen otherwise than as abandoning the principle audiatur et altera pars.” 175

Ústavní soud České republiky 8.3.2006 (ÚS) [decision of the Constitutional Court of Mar. 8, 2006] ÚS 50/04 (Sugar Quotas).

176

Lisbon II at paras. 111–13.

177

See also Vyhnánek, supra note 171.

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most relevant UK judgment in this context was handed eight days after the Bundesverfassungsgericht’s OMT-referral: The HS2 decision, which was clearly inspired by the German approach to constitutional identity. In British case law issues such as respect for the UK’s constitutional identity, for fundamental constitutional principles, for fundamental rights and for the division of competences between the member states and the EU (Kompetenz-Kompetenz issue) were until recently not well developed. The Supreme Court’s judgment in the HS2 case is however a turning point. One of the questions at hand was whether EU law requires British courts to test the compatibility of parliamentary proceedings for the adoption of a bill approving the development of a high speed railroad track with an EU directive. Such judicial interference in parliamentary proceedings is explicitly forbidden by the Bill of 178 Rights of 1689, which is still positive law. The Supreme Court justices unanimously decided that EU law did not require the alleged judicial action. At the same they seized the opportunity to discuss the issue of whether they would have had to apply the relevant piece of EU law if it had required judicial oversight. Although their statements in this 179 respect are obiter, the message is loud and clear. In his unanimously endorsed opinion, Lord Reed, stated that “there is much to be said for the view, advanced by the German Federal Constitutional Court that (…) a decision of the Court of Justice should not be read by a national court in a way that places in question the 180 identity of the national constitutional order”. Lord Neuberger and Lord Mance, whose joint opinion was unanimously endorsed by the other sitting justices, also envisaged substantive limits to the primacy of EU law: The United Kingdom has no written constitution, but we have a number of constitutional instruments. They include Magna Carta, the Petition of Right 1628, the Bill of Rights and (in Scotland) the Claim of Rights Act 1689, the Act of Settlement 1701 and the Act of Union 1707. The European Communities Act 1972, the Human Rights Act 1998 and the Constitutional Reform Act 2005 may now be added to this list. The common law itself also recognises certain principles as 178

“That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament.” 179

For the importance of the decision for the general UK constitutional landscape, see Mark Elliot, Constitutional legislation, European Union Law and the nature of the United Kingdom’s contemporary constitution, 10 EUCONST 379 (2104). 180

On the application of Buckinghamshire County Council and others v. The Secretary of State for Transport, [2014] U.K.S.C. 3, para. 110.

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fundamental to the rule of law. It is, putting the point at its lowest, certainly arguable (and it is for United Kingdom law and courts to determine) that there may be fundamental principles, whether contained in other constitutional instruments or recognised at common law, of which Parliament when it enacted the European Communities Act 1972 did not either 181 contemplate or authorise the abrogation. In the more recent Pham judgment, Lord Mance expressed his view on the constitutional relationship between the UK and the EU in way which is reminiscent of that of the Bundesverfassungsgericht. He claimed jurisdiction for UK courts to essentially conduct ultra vires and constitutional identity review, but also emphasized the need for all bodies involved to act with mutual respect and great caution, in a spirit of cooperation of which 182 also the Bundesverfassungsgericht has spoken. 183

On the remaining “missing” member states we will be very brief. They can be divided into three groups. In a first group of states — Bulgaria, Croatia, Malta, Slovenia, Romania — the situation simply is not entirely clear, and the courts have not developed a clear view 184 on ultra vires and identity review. In the second group — Austria, Belgium, Cyprus, Hungary, Luxemburg, and the Netherlands — the primacy of EU law more or less goes uncontested. In the third group certain elements of ultra vires review or some sort of constitutional (identity) review are present, for instance in the form of unamendable constitutional provisions — Greece, Portugal — or the claim of primacy of the national 185 constitution vis-à-vis EU law — Lithuania, Slovakia. In some of these latter states also the contours of a kind of (indirect) review of (secondary) EU acts can be perceived. The Greek Council of State for instance has stated that no legal norm has primacy on the Greek constitution. But it also reads in Article 28 of that same constitution the obligation to 186 interpret national constitutional provisions in conformity with EU law. In Finland the Constitutional Law Committee, a parliamentary committee which is considered to be the central constitutional body of Finland and whose constitutional interpretations are treated 181

Id. at para. 207.

182

Pham v. Secretary of State for the Home Department, [2015] U.K.S.C. 19, paras. 90–91.

183

See more extensively BESSELINK, CLAES, IMAMOVIĆ, REESTMAN, supra note 106.

184

Michael Holoubek, Austrian National Report for the XVI Congress of the Conference of European Constitutional Courts 1, http://www.confcoconsteu.org/reports/rep-xvi/LB_Autriche_EN.pdf. 185

Report of the Constitutional Court to the XVI Congress for the Conference of European Constitutional Courts 1– 2, http://www.confcoconsteu.org/reports/rep-xvi/KF-Slovaquie-EN.pdf. 186

Panos Kapotas, Greek Council of State, Judgment 3470/2011, 10 EUCONST 162 (2014).

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as binding by Parliament and other authorities, has stated that national measures implementing EU law may not lower the national standard of fundamental rights protection. The Portuguese Tribunal Constitucional has declared provisions in the budget th th law for 2012 suppressing the 13 and 14 (salary) months for civil servants and pensioners unconstitutional for violating “the fundamental rights and key structural principles of the 188 state based on the rule of law”, in particular the principle of equality. As the suppression was agreed in the bailout program concluded between the Portuguese government, the IMF and EU institutions, this could be taken as an indicator that the Court is also willing to review the compatibility of genuine EU law instruments with the fundamental principles of the Portuguese legal order. This would be in line with the Articles 8(4) and Article 277(2) of 189 the Portuguese Constitution. Yet, this does not come anywhere near the Bundesverfassungsgericht’s constitutional identity case law. The comparative analysis thus reveals a clear trend in the case law of national (constitutional) courts to announce constitutional limitations regarding participation in European integration and to the effect of EU law in the domestic legal order. Constitutional and supreme courts have different interests and values to consider than the ECJ, because they have to uphold the national constitution and protect national principles and values, 190 which may lead to differences in assessment in certain constellations. Yet, the comparative analysis also shows that the German Bundesverfassungsgericht may well be overstating the support for its position in foreign jurisprudence. In most cases, the court’s brethren are much more nuanced and less ardent. It is important also to note the difference in power, posture, reputation, and gravitational pull between the courts involved. Moreover, the constitutional cultures vary greatly, with courts, even constitutional courts in many countries, leaving much more room to the political branches in these types of issues.

187

Päivi Leino and Janne Salminen, The Euro Crisis and Its Constitutional Consequences for Finland: Is There Room for National Politics in EU Decision-Making?, 9 EUCONST 451, 459–60 (2013). 188

Tribunal Constitucional (Portugal) ruling No. 353/12, 5 July 2012; see also Mariana Canotilho, Teresa Violante and Rui Lanceiro, Austerity measures under judicial scrutiny: the Portuguese constitutional case law, 11 EUCONST (2015) (forthcoming). 189

Art. 8(4) states, “The provisions of the treaties that govern the European Union and the rules issued by its institutions in the exercise of their respective responsibilities shall apply in Portuguese internal law in accordance with Union law and with respect for the fundamental principles of a democratic state based on the rule of law.” Article 277(2) provides, “The organic or formal unconstitutionality of international treaties that have been regularly ratified do not prevent the application of their provisions in Portuguese law as long as the provisions are applied in the law of the other party, except if the said unconstitutionality results from the violation of a fundamental principle.” 190

See Christophe Grabenwarter, The Co-operation of Constitutional Courts in Europe – Current Situation and Perspectives, in GENERAL REPORT AND OUTLINE OF MAIN ISSUES FOR THE XVITH CONGRESS OF THE CONFERENCE OF EUROPEAN CONSTITUTIONAL COURTS 8.

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E. Concluding Remarks In his Opinion in the Gauweiler case, Advocate-General Cruz Villalón extensively discussed the claim of the Bundesverfassungsgericht to constitutional identity review. In his view, constitutional identity and national identity in the sense of Article 4(2) TEU could not be very different. He pointed to the notion of the common constitutional traditions of the member states and the EU’s common constitutional culture, which is part of the common identity of the Union. Against this backdrop, he argued, the constitutional identity of each member state could not be regarded as ‘light years away’ from that common constitutional culture. Rather, there would be convergence between the constitutional 191 identity of the Union and that of each of the member states’. Moreover, it would make it an impossible task to preserve the Union as we know it, if the Bundesverfassungsgericht’s claim to an absolute and ill-defined reservation “described as ‘constitutional identity’” were shared by the guardians of the constitutions of 28 member 192 states. It is obvious that the AG worked on the basis of an entirely different understanding of the concept of “‘identity’” than that of the Bundesverfassungsgericht. Its urge to protect German constitutional identity vis-à-vis the EU is not diminished by the fact that the foundational principles of the EU and its member states are converging. German constitutional identity is already and almost exclusively made up of principles which are also foundational for the EU legal order: democracy, rule of law, fundamental rights protection, solidarity. German constitutional identity requires that until the German people as the original holder of German sovereignty in free self-determination decides otherwise Germany remains a democratic, rule of law based, fundamental rights protecting, social and federal state in its own right. And although the Bundesverfassungsgericht has clearly overestimated the support for its position in foreign jurisprudence, it is undeniable that, at least on the level of principles, several constitutional or highest courts of other member states have adopted a similar stance. This situation cannot be expected to change in the near future and implies that the EU legal order is less autonomous than the ECJ proclaims it to be. The AG also could not resist the temptation to enter into the debate on ‘subordination’ of 193 one legal order to the other. But the reality is that the Bundesverfassungsgericht and most other constitutional and highest courts do accept that the EU is not structured according to a strict hierarchy. At the same time they do not accept that EU law has

191

Opinion of Advocate General Cruz Villalón, supra note 5, at para 61.

192

Id. at para. 59.

193

Id. at para. 60.

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unconditional primacy. That will not change as long as sovereignty, or the ultimate legal or political authority, has not explicitly shifted to EU. As long as that has not happened, the EU will have to cope with different courts which on the basis of different ultimate authorities claim to be the court of last resort. It goes without saying that such a legal order can only be viable if each of the courts involved exercises considerable self-restraint. In this respect the Gauweiler decision of the ECJ must be applauded. Several member 195 states had urged the ECJ to dismiss the Bundesverfassungsgericht’s reference in Gauweiler as inadmissible because a national court should not be able to request a preliminary ruling from the Court of Justice if its request already includes, intrinsically or conceptually, the possibility that it will in fact depart from the answer received. A national court should not be able to proceed in that way because Article 267 TFEU cannot 196 be regarded as providing for such a possibility. The AG and the ECJ were correct to reject that suggestion. The AG invoked the principle of 197 sincere cooperation and advised the ECJ to engage with the concerns of the referring court. And this is what the ECJ has done in Gauweiler. The Court resisted the temptation to restate its classic claims regarding the autonomy and the primacy of EU law over all national law of the member states, including their constitutional law. It only permitted itself to remark, almost in passing, that it is settled case-law of the Court that a judgment in which it gives a preliminary ruling is binding on the national court, as regards the interpretation or the validity of the acts of the EU institutions in question, for the purposes of the decision to be given in the main 198 proceedings.

194

Lisbon at para. 340.

195

Including Italy, whose Corte costituzionale the BVerfG has ranked among the league of like-minded courts.

196

Opinion of Advocate General Cruz Villalón, supra note 5, at para. 36.

197

The word “sincere” is repeated 9 times in the Opinion. The AG also suggested that there was a risk that the preliminary reference procedure was being “manipulated.” 198

Gauweiler, Case C-62/14 at para. 16.

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For the rest, it relies almost entirely on the force of its substantive arguments that the OMT decision of the European Central Bank falls with the Bank’s mandate and is not ultra vires. This is wisdom. Recourse the ECJ’s own authority and a restatement of the classic claims of EU law would not have impressed the Bundesverfassungsgericht. The German court is well aware of that Luxembourg case law and still does not entirely accept it. When a conflict cannot be settled by reference to a common ultimate legal or political authority and the use of force is excluded, there is only one remedy: the recourse to reason and arguments. That is what the ECJ has done in Gauweiler. Now the word is to the Bundesverfassungsgericht.

Special Section The CJEU’s OMT Decision Doubtful it Stood…: Competence and Power in European Monetary and Constitutional Law in the Aftermath of the CJEU’s OMT Judgment By Heiko Sauer

Abstract Quite unsurprisingly, the CJEU has held that the ECB’s OMT program does not violate EU law. In accordance with this holding, I argue in the first part of this note that the OMT program does not transgress the ECB’s mandate under the Treaty, which is often interpreted too narrowly, in particular by German legal scholars. Furthermore, I argue that a violation of the prohibition of monetary financing of the member States as enshrined in article 123, para 1 TFEU cannot be inferred from the ECB’s announcement of a program, which has never been implemented. In any case, there is clearly no manifest and grave transgression of EU competences which, according to the German Federal Constitutional Court’s (FCC) Honeywell doctrine, is required for an ultra vires finding. The second part of this note shows that the FCC’s doctrine regarding transgressions of competences by EU organs (ultra vires review) is not only unconvincing as a matter of principle but also and worse (as on premises we can always reasonably disagree) not consistently applied to the OMT program. The note also objects to the Court’s somewhat trendy blending of ultra vires and constitutional identity review of EU law through which it increasingly conceals its approach of applying the so-called constitutional constraints of European integration to the EU organs’ conduct. The forthcoming FCC judgment is therefore less important as regards the quite foreseeable finding on the lawfulness of the OMT program but – hopefully – of vital importance as it might embody a more coherent relaunch of the FCC’s standards of judicial review with regard to EU law. The judgment of the Court of Justice of the European Union (CJEU) on the European Central Bank’s (ECB) 2012 announcement of future Outright Monetary Transactions 1 (OMT) comes as no surprise. It had not been expected that the CJEU would interpret the 

Professor of Public Law, Rheinische Friedrich-Wilhelms-Universität Bonn. I am grateful to Julian Krüper, Mehrdad Payandeh, and Sven Simon for valuable comments, to Christian Bayer and Marc Resinek for important background information on political economy, and to Martin Schäfer for his research assistance. 1

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, Case No. 2 BvR 2728/13, https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2014/01/rs20140114_2bvr272813e n.html [hereinafter OMT Decision].

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European Economic and Monetary Union’s (EMU) Treaty provisions the way the FCC had 2 “suggested.” Neither had it seemed conceivable that the CJEU would reject the FCC’s request for a preliminary ruling holding that a legally non-binding assessment of the EU 3 action’s lawfulness could not be requested under Article 267 TFEU. The judgment had nevertheless been awaited for with tension for two reasons: First, in the vigorous and in 4 5 part very critical debate about the ECB’s competences under the TFEU and its alleged ultra vires action a judgment by the CJEU was necessary to settle the fundamental European law issues at stake. This is all the more important with regard to the ECB’s 6 current Expanded Asset Purchase Program (EAPP) as well as its interconnection with the 7 European Stability Mechanism’s (ESM) financial assistance programs. The CJEU’s holdings on the ECB’s competences within the EMU framework are discussed in the first part of this note regarding the distinction between monetary and economic policy (infra section A.I.) and the interpretation of Article 123, paragraph 1 TFEU which prohibits monetary financing of the member States by the ECB (infra section A.II.). Second, it was clear that the judgment would shape the new stage in the changing and sometimes explosive on-off relationship between the CJEU and the FCC, the stage entered into by Karlsruhe‘s first ever request for a preliminary ruling. The FCC had fortified its ultra vires doctrine and clearly indicated its readiness not to follow the CJEU but to insist on the notorious “last word” of

2

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 416 et seq..

3

The FCC’s ultra vires assumption entails that an EU action might be, even after its validation by the CJEU, declared unlawful and thus not binding on Germany from a constitutional law perspective; the FCC therefore denies or at least questions the binding force of the CJEU’s preliminary ruling. In this regard, see the other member States‘ objections, Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag, para. 18 et seq. (June 16, 2015), http://curia.europa.eu/.; the Advocate General’s cautious criticism, Opinion of Advocate General Cruz Villalón at para. 30 et seq., Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (Jan. 14, 2015), http://curia.europa.eu/juris/document/document.jsf?text=&docid=161370&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid= (which are—from a European law perspective—of course correct). 4

See, e.g., Wolfgang Kahl, Bewältigung der Staatsschuldenkrise unter Kontrolle des Bundesverfassungsgerichts – ein Lehrstück zur horizontalen und vertikalen Gewaltenteilung, 128 DEUTSCHES VERWALTUNGSBLATT (DVBl.) 197, 205 et seq. (2013) (with a trenchant guess on a potential CJEU OMT judgment); Reiner Schmidt, Die entfesselte EZB, 70 JURISTENZEITUNG 317 (2015); Werner Heun, Eine verfassungswidrige Verfassungsgerichtsentscheidung – der Vorlagebeschluss des BVerfG vom 14.1.2014, 69 JURISTENZEITUNG 331 (2014). 5

On the ECB’s new approach in the European debt crisis in general, see Thomas Beukers, The New ECB and its Relationship with the Eurozone Member States: Between Central Bank Independence and Central Bank Intervention, 50 COMMON MKT. L. REV. 1579, 1579 et seq. (2013). 6

It is known as “quantitative easing”; see, in this regard, Franz C. Mayer, Zurück zur Rechtsgemeinschaft: Das OMT-Urteil des EuGH, 68 NEUE JURISTISCHE WOCHENSCHRIFT (NJW) 1999, 2003 (2015). 7

Cf. Opinion of Advocate General, supra note 3, at paras. 140 et seq..

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the German Constitution instead. Thus, the second part of this note discusses the constitutional legal premises of the FCC’s approach and the procedural and substantial manner in which the FCC tries to scrutinize the ECB’s OMT program (infra sections B.I. and B.II.). In this context, possible scenarios for the upcoming judgment (infra section C.I.) and consequences for European multi-level constitutionalism (infra section C.II.) will be discussed. A. European Monetary Constitutional Law and the ECB’s Mandate after the OMT Judgment I. The OMT Program Between Monetary and Economic Policy: The ECB’s Mandate and Legitimation under the EMU The major objection of the FCC’s referral lies in the alleged transgression of the ECB’s monetary policy mandate: According to the FCC, the OMT sovereign bonds purchase program aims at complementing the member States’ and subsequently the ESM’s financial assistance for over-indebted member States of the Eurozone. Such measure fell into the ambit of general economic policy and was ultra vires. It has thus to be examined how the EMU’s Treaty provisions generally shape the ECB’s mandate (infra subsection 1.). Subsequently, the question of how monetary and economic policy can be distinguished is to be addressed (infra subsection 2.). 1. Competences and Legitimation of the ECB under the EMU 1.1 The Overrated Accuracy of the Distinction Between Monetary and Economic Policy The asymmetry of competences within the EMU has often been characterized as its decisive birth defect. The member States of the Eurozone have transferred their monetary 9 10 sovereignties entirely : The monetary policy lies in the exclusive competence of the EU. In contrast, the economic policy is not even a shared competence of the EU and its 11 12 member States. Is merely subject to coordination, i.e. the member States adjust their national economic policies with a view to achieving the requisite objectives of the 8

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Oct. 14, 2004, 111 ENTSCHEIDUNGENG DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 307, 319; Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], June 30, 2009, 123 ENTSCHEIDUNGENG DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 267, 400. 9

See CHRISTOPH HERRMANN, WÄHRUNGSHOHEIT, WÄHRUNGSVERFASSUNG UND SUBJEKTIVE RECHTE, 116 et seq. (2010).

10

Consolidated Version of the Treaty on the Functioning of the European Union art. 2 para 2., art. 3 para. 1 lit. c), May 9, 2008, 2008 O.J. (C 115) 47 [hereinafter TFEU]. 11

TEFU art. 2 para. 2, art. 4 para 2.

12

TEFU art. 5 para. 1, art. 119 para. 1.

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Treaties. It has long been questioned whether and how it is possible for a monetary union to operate under the condition of distinct and fundamentally diverse national economic policies; and it has often been deplored that the ongoing European debt crisis is partly a consequence of the lack of political courage to endow the EU with economic competences. However, de constitutione lata the allocation of competences within the EMU requires a differentiation between monetary and economic policy: The former is assigned to the EU and the latter to its member States. The FCC is of the opinion that the ECB left its field of activity, which according to Article 127 TFEU is basically monetary policy, and unlawfully encroached on economic policy. Thus, the allegation only at first sight concerns the ECB’s competences as an EU organ; substantially, it is about the ECB making use of competences which have not been transferred to the EU by its member States. Regrettably, there are several factors 14 rendering the requisite delimitation quite intricate: First, the Treaties do not provide for any criteria for the delimitation between monetary and economic policy. Second, in political economy the idea that a single political action can unquestionably be assigned to either of the two domains is increasingly cast into doubt. Third, the EMU provisions considerably blur the boundary by vesting the ESCB—and thereby, implicitly and above all, the EU—with the competence or rather the obligation “to support the general economic 15 16 policies in the Union”, without prejudice to the objective of price stability. The ECB is thus not only entitled to take actions of monetary character which have an impact on economic policy, as long as price stability is not affected. It is also authorized to take measures of economic character as long as these support the member States coordinated 17 economic policies. Thereby, the EMU’s underlying differentiation between monetary 18 policy on the one hand and economic policy on the other hand is considerably loosened: 13

TEFU art. 3 paras. 3 & 4, art. 119 para. 1.

14

See also Alexander Thiele, Friendly or Unfriendly Act? The “Historic” Referral of the Constitutional Court to the ECJ Regarding the ECB’s OMT Program, 15 GERMAN L.J. 241, 258 et seq. (2014); Mattias Kumm, Rebel Without a Good Cause: Karlsruhe’s Misguided Attempt to Draw the CJEU into a Game of Chicken and What the CJEU Might do About It, 15 GERMAN L.J. 203, 214 (2014); Jürgen Bast, Don’t Act Beyond Your Powers: The Perils and Pitfalls of the German Constitutional Court’s Ultra Vires Review, 15 GERMAN L.J. 167, 175 (2015); Frank Schorkopf, Krisensymptome supranationaler Leitbilder. Zur Notwendigkeit intergouvernementaler Integration, 11 ZEITSCHRIFT FÜR STAATS-UND EUROPAWISSENSCHAFTEN (ZSE) 189, 193 (2013); Daniel Thym, Case Note on Pringle, 68 JURISTENZEITUNG (JZ) 259, 260 (2013). See Simon, in this issue. 15

TEFU art. 127 para. 1(2); compare in this regard also Bundesbankgesetz [German Central Bank Statute] § 12.

16

The ESCB itself is neither vested with legal capacity nor with capacity to act, so it must be referred to the ECB, see in detail Florian Becker, Art. 129 TFEU, in KOMMENTAR ZUR EUROPÄISCHEN WÄHRUNGSUNION margin number 4 et seq. (Helmut Siekmann ed., 2013). 17

This important aspect is played down by the FCC, see OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 366, 403 et seq.; see, in contrast, HEUN, supra note 4, at 333. 18

See Opinion of Advocate General Cruz Villalón, supra note 3, at para. 128 et seq.; ALEXANDER THIELE, DAS MANDAT

DER EZB UND DIE KRISE DES EURO 33 et seq. (2013).

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Whereas the competences between the EU and its member States are divided along the line of either monetary or economic policy, such clarity is abandoned with regard to the ECB: It is vested not only with the mandate to conduct the monetary policy of the EU, 19 together with the national central banks of the Eurozone, but also with additional capacities of economic policy. Though the ECB as an organ cannot be endued with powers that have not been transferred to the EU as an organization, there is no contradiction: Article 5, paragraph 1(2) TFEU establishing the merely coordinating EU competence in the field of economic policy expressly states that special principles apply for the member States of the Eurozone. Thus, Article 127, paragraph 1(2) TFEU vesting the ECB with a supportive economic policy competence embodies, in terms of organ powers, an additional but concealed EU competence. Albeit the exercise of this competence has to be strictly geared to the member States coordinated economic policies, i.e. the EU is prevented from a self-contained economic policy approach, it is too simplistic to contend 20 that the EMU provisions vest the EU with monetary but not with economic powers. 1.2. Independence, Legitimation, and Mandate of the ECB The assumption that the ECB’s competences are to be narrowly interpreted and are thus limited to monetary policy for democratic reasons cannot be endorsed. The ECB, as well as 21 the national central banks, is independent according to article 130 TFEU. Therefore, political influence by other EU organs or by the member States’ Governments is specifically prohibited. Seen from the German understanding of the constitutional principle of democracy, this is problematic: Pursuant to Article 20, paragraph 2(1) of the Basic Law, all State authority emanates from the people. In a representative democratic system, the necessary link between the people and a State organ must, according to prevailing 22 doctrine in Germany, be established substantially as well as personally. The correspondent problem with the German Central Bank’s (Bundesbank) independence, as it 23 has long been discussed, is the inability of the directly elected Bundestag or the democratically accountable Federal Government to govern or at least control the 19

TEFU art. 282 para. 1(2).

20

This is, however, a widespread understanding in German literature, compare, e.g., Martin Seidel, Der Ankauf nicht markt- und börsengämgiger Staatsanleihen, namentlich Griechenlands, durch die Europäische Zentralbank und durch nationale Zentralbanken – rechtlich nur fragwürdig oder Rechtsverstoß?, 21 EUROPÄISCHE ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT (EUZW) 512 (2010); SCHMIDT, supra at note 4, 320; Helmut Siekmann & Volker Wieland, The European Central Bank’s Outright Monetary Transactions and the Federal Constitutional Court of Germany, INSTITUTE FOR MONETARY AND FINANCIAL STABILITY WORKING PAPER No. 71, 8 (2013). 21

See in detail THIELE, supra note 18, at 51 et seq. with further references.

22

See, e.g., Horst Dreier, Art. 20 (Democracy), in 2 GRUNDGESETZ-KOMMENTAR, margin number 104 et seq. (Horst Dreier ed., 2006). 23

See FRAUKE BROSIUS-GERSDORF, DEUTSCHE BUNDESBANK UND DEMOKRATIEPRINZIP 127 et seq. (1997); MATTHIAS JESTAEDT, DEMOKRATIEPRINZIP UND KONDOMINIALVERWALTUNG 427 et seq. (1993); REINER SCHMIDT, ÖFFENTLICHES WIRTSCHAFTSRECHT: ALLGEMEINER TEIL 362 et seq. (1990).

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monetary policy decisions of the Bundesbank; such policy also evades, by its very nature, a tight statutory guidance. This lack of influence is conceived of as a democratic abnormality 24 which might be justified for price stability reasons, but is not directly covered by article 25 88 of the Basic Law. On the basis of this constitutional peculiarity, some argue for a restrictive approach to the competences of the ECB: Due to the democratic problem inherent in the ECB’s 26 independence, its mandate under the TFEU had to be strictly limited to monetary policy. Such a legal transplant of German constitutional ideas to the European level is however erroneous for two reasons: First, democratic requirements under the Treaties do not necessarily correspond to democratic requirements under the Basic Law. In other words, it had to be explored, as a first step, how democratic legitimation is to be conceived of in the EU, which is a highly difficult and controversial issue; as a second step, one would have to ask whether in that regard the ECB’s independence constitutes a democratic problem 27 comparable to the situation under German constitutional law. I cannot see that this path has been taken by any of the exponents of the democracy related argument including the 28 FCC. Second, even if the ECB’s independence constituted a problem with regard to democracy in the EU, such problem would be outweighed by both the constitutional coverage of the ECB’s independence stemming from Article 130 TFEU and most notably the ECB’s supportive economic policy competence enshrined in Article 127, paragraph 1(2) 29 TFEU: No appeal to a narrow interpretation of the ECB’s mandate based on whatever important constitutional principle can be used for overriding its explicitly stipulated competences.

24

With regard to the ECB’s independence see OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at para. 55.

25

See in detail BROSIUS-GERSDORF, supra note 23, at 377 et seq.; cf. Reiner Schmidt, Die Gefährdung der Europäischen Zentralbank, 31 ZEITSCHRIFT FÜR RECHTSPOLITIK (ZRP) 161 et seq. (1998). 26

See SCHMIDT, supra note 4, at 318.

27

See in detail, CHARLOTTE GAITANIDES, DAS RECHT DER EUROPÄISCHEN ZENTRALBANK 211 et seq. (2005); correctly differentiating between european and national democratic requirements, HUGO J. HAHN & ULRICH HÄDE, WÄHRUNGSRECHT 232 et seq. (2010); CHRISTOPH OHLER, BANKENAUFSICHT UND GELDPOLITIK IN DER WÄHRUNGSUNION, § 2 para. 49 (2015); towards a generalization of the democracy related problem, Sven Simon, Whatever it takes: Selbsterfüllende Prophezeiungen am Rande des Unionsrechts? Eine unionsrechtliche Bewertung der OMTEntscheidung der EZB, 50 EUROPARECHT (EUR) 107, 123 (2015). 28

It is significant that the FCC concludes its democratic argument with references to its own jurisprudence, adding “relating to the German Constitution,” see OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at 366 & 400. 29

See also OHLER, supra note 27, at § 2 para. 49; Jan Henrik Klement, Der Euro und seine Demokratie, 29 ZEITSCHRIFT FÜR GESETZGEBUNG (ZG) 169, 191 (2014).

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2. The Differentiation Between Monetary and Economic Policy: Criteria and Standard of Review 1.1. The persuasiveness of the CJEU’s Strictly Subjective Approach 30

In the absence of any Treaty-based clue, there are at most three feasible criteria for the distinction between measures of monetary and economic policy: their purpose, their type 31 or legal character, and their effect. To start with the latter, it is hardly imaginable that a specific ECB action might a priori have an affect only for one of the areas in question. The 32 same applies, mutatis mutandis, for the type or legal character of a potential ECB action. For example, neither a sovereign bonds purchase nor any other open market operation is as such a measure of monetary or economic policy. Otherwise one had to argue that any ECB action of the kind provided for in the ESCB Statute automatically lies within its mandate. It cannot therefore be inferred from the CJEU’s Pringle finding that sovereign bonds purchases carried out by the ESM fall into the member States’ economic policy competences that such purchases if carried out by the ECB exceed its monetary policy 33 mandate. The purpose and context of such purchase differ so categorically that the comparison is misleading. At the most, one might object the conditionality of the OMT 34 program in this regard. According to the conditions set out by the OMT press release, a sovereign bonds purchase by the ECB must be strictly conditional – in the sense that there must be a current ESM financial assistance program including the possibility of primary market purchases. But this is an ambiguous if not perfidious argument: If only 35 conditionality, as will be set out below, ensures compliance of the ECB with the prohibition of monetary financing stemming from Article 123, paragraph 1 TFEU, conditionality cannot simultaneously trigger the exceeding of the ECB’s monetary policy mandate. In other words, conditionality is crucial as regards the substantive aspect of the ECB’s action, not its competences. The substantially necessary conditionality therefore 36 does not turn a lawful monetary into an unlawful economic measure. 30

See OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at para. 42 (“It must be pointed out in this regard that the FEU Treaty contains no precise definition of monetary policy. . . .”). 31

See, in detail, Alexander Thiele, Die EZB als fiskal- und wirtschaftspolitischer Akteur?, 23 EUROPÄISCHE ZEITSCHRIFT

FÜR WIRTSCHAFTSRECHT (EUZW) 694 et seq. (2014). 32

Contra HEUN, supra note 4, at 333.

33

Veering toward such an argument, see OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at paras. 366, 407 et seq.; Mattias Wendel, Kompetenzrechtliche Grenzgänge: Karlsruhes Ultra-vires-Vorlage an den EuGH, 74 ZEITSCHRIFT FÜR AUSLÄNDISCHES ÖFFENTLICHES RECHT UND VÖLKERRECHT (ZaöRV) 615, 653 et seq. (2014). 34

OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at paras. 366, 407.

35

See infra A.II.

36

This is convincingly exposed by OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at paras. 63, 99–100.

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As a consequence, the requisite distinction can, ultimately, only be geared to the purpose 37 of the conduct in question. This is however disputed by the FCC, and its concern cannot be lightheartedly dismissed: Would such a subjective approach not inevitably enable the ECB to determine the limits of its own mandate and thereby vest it with KompetenzKompetenz, for every monetary purpose justifies every possible measure? Of course the ECB must be effectively precluded from just pretending monetary purposes with a view to 38 establishing its competence. In my opinion, this can be achieved, and thus a purely subjective approach does not amount to vesting the ECB with Kompetenz-Kompetenz: Since the purpose is decisive for the legality of a measure, the ECB is under a procedural 39 obligation to give reasons for its actions; the less evident the monetary policy character of a single measure is, the higher is the standard for its substantiation. Such substantiation enables judicial review by the CJEU. From an insufficient substantiation, and this means from an ECB’s infringement of its procedural obligation, the CJEU might infer the unlawfulness of an action; otherwise it would be due to the ECB to preclude its action being judicially reviewed. Most notably, it can and must be reviewed whether an ECB 40 action first pursues a monetary policy objective and second is a suitable instrument with 41 reference to this objective. What considerably complicates such review is that there are necessarily certain economic policy assumptions underlying the ECB’s purposes: When deciding on the OMT program, the ECB was of the opinion that the so-called monetary transmission mechanism was interrupted. As interest rates in the EU were widely differing, the ECB worried that it would forfeit its capacity to act and thus, ultimately, to maintain price stability. The ECB conceived this diversity as an expression of somewhat irrational surcharges induced by unjustified fears of a reversibility of the Euro. By means of its OMT program, it intended to purchase sovereign bonds of certain member States of the Eurozone with particularly high interest rates. It thereby wanted to adjust the interest level, and, as a result, to restore the monetary transmission in a way enabling it to perform its tasks under the EMU. The suitability of a particular measure of monetary policy to

37

The CJEU regards the measures taken as subsidiary criteria. See OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at para. 46. Indirect effects are seen as irrelevant. See Case C-370/12, Pringle v. Government of Ireland, Ireland and the Attorney General, paras. 56, 97 (Nov. 27, 2012), http://curia.europa.eu/; Gauweiler, Case C-62/14 at para. 51. In contrast, the FCC is of the opinion that the character and the effect of a particular action have to be taken into consideration too. See OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 402. 38

Cf. Id. at paras. 366, 400.

39

See id. at paras. 69 et seq..

40

Or rather aims at supporting the member States’ economic policies without affecting price stability.

41

I doubt whether the principle of proportionality as enshrined in TEFU article 5, paragraph 4 fully applies in the area of delimitation of competences. For such an approach, see Opinion of Advocate General Cruz Villalón, supra note 3, at para. 159 et seq., Gauweiler, Case C-62/14; OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 66 et seq..

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pursue a certain objective, mostly price stability being the ECB’s paramount objective, cannot be assessed without political economy expertise. This apparently raises the 43 question of the standard of judicial review : Is the CJEU allowed or even obligated to make its proper observations on monetary or economic policy and to deny the ECB’s assumptions? Or does the ECB, in contrast, dispose of a wide margin of appreciation in monetary and economic policy matters so that only the tenability of its assumptions can be inquired? 1.2. Judicial Expertise in Political Economy and the Standard of Review

The FCC is of the former opinion which it regrettably does not substantiate: It objectifies the purpose of an ECB’s action, which already entails a concealed element of intensified 44 review, and above all it vigorously disagrees with the ECB’s assumptions. On the one hand, the distinction between rational and irrational interest surcharges was assailable and 45 could in any case not be operationalized. On the other hand, virtually every debt crisis entailed an interruption of the monetary transmission mechanism, more precisely a disruption of the state-bank-nexus; this however could not turn the improvement of a 46 State’s solvency by an ECB’s sovereign debts purchase into a measure of monetary policy. Unmaskingly, the FCC further describes the assumptions of the Bundesbank—which is highly critical towards the OMT program, its President having voted against it in the ECB 47 48 Governing Council—as “convincing expertise” where it deviates from the ECB position. This implies that the ECB provides unconvincing expertise as regards the controversial 49 issues. But what is the basis for the FCC to exhaustively question the ECB’s political economy assumptions and to decide which bank’s assessment is correct and which one’s is mistaken? What the FCC exposes on economic policy might not be incorrect, it might even be convincing; but this is insignificant, as there are at least two points clearly indicating a

42

TEFU art. 127 para. 1(1).

43

See Matthias Goldmann, Adjudicating Economics? Central Bank Independence and the Appropriate Standard of Judicial Review, 15 GERMAN L.J. 265, 269 et seq. (2014). 44

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 401; see SCHMIDT, supra note 4, at 320.

45

Oddly, the FCC uses the pretty vague term “aussagelos,” but it obviously rather means “verfehlt,” see OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 416. 46

Id. at para. 416.

47

Id. at para. 405.

48

BAST, supra note 14, at 177 (“The Constitutional Court’s discussion of this crucial point is surprisingly brief, but still heavily loaded with claims to economic expertise.”). 49

See, particularly critical, HEUN, supra note 4, at 334.

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wide margin of appreciation in political economy matters. First and most evident, the FCC 51 cannot claim to have the requisite expertise. This could neither be altered if it availed itself of experts, as in case they disputed the ECB’s assumptions the FCC would have to decide on preferability. Second, the fact that the EMU’s provisions do not provide for applicable criteria to distinguish monetary from economic policy and at the same time vest the ECB with an additional supportive economic policy competence entails a legitimate 52 discretion on part of the ECB when shaping its mandate. After all, the standard of review for both the monetary purpose of an ECB’ action and its suitability to pursue its objective is tenability. It seems undeniable that the assumptions that the monetary transmission 53 54 mechanism was interrupted and that a selective sovereign bonds purchase would be 55 56 convenient for its restoration were tenable, at least not obviously mistaken. One might still deplore that the adequate standard of review leaves considerable leeway to the ECB. This is however primarily a political concern: The EMU’s Treaty provisions do not provide for any more precise distinction and they do not fence the ECB’s activities more narrowly, especially taking into consideration the crucial provision of Article 127, paragraph 1(2) TFEU. The CJEU should thus not be criticized for not having more effectively enchained the ECB—apart from the question if this would have been desirable from a legal policy point of view.

50

Cf. THIELE, supra note 18, at 39 et seq.; Christoph Herrmann, Die Bewältigung der Euro-Staatsschuldenkrise an den Grenzen des deutschen und europäischen Währungsverfassungsrechts, 23 EUROPÄISCHE ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT (EUZW) 805, 810 et seq. (2012); THYM, supra note 14, at 263; KUMM, supra note 14, at 214. See Simon, in this issue. 51

The CJEU rightly induces a margin of appreciation from the technical and complex nature of the requisite ECB’s assumptions and forecasts, see Gauweiler, Case C-62/14 at para. 68. 52

There is, additionally, a controversy as to whether the preservation of the Euro is some kind of meta-goal of the ECB. For a critical statement, see OMT Decision, BVerfG, Case No. 2 BvR 2728/1 paras. 366, 405. In the affirmative, see, e.g., Peter Sester, Plädoyer für die Rechtmäßigkeit der EZB-Rettungspolitik, RECHT DER INTERNATIONALEN WIRTSCHAFT (RIW), 451, 453 (2013); HEUN, supra note 4, at 334. 53

This is not even contested by the FCC.

54

According to the FCC, the OMT program’s selectivity contradicts its monetary policy purpose as monetary actions are usually irrespective of the situation in particular member States. See OMT Decision, BVerfG, Case No. 2 BvR 2728/1 366, 406 et seq.. The CJEU however convincingly highlights that there is no EMU Treaty provision prescribing universality and thus prohibiting selectivity of ECB operations. See id. at para. 55. 55

See, in detail, OMT Decision, BVerfG, Case No. 2 BvR 2728/1 paras. 47 et seq., paras. 72 et seq.; see THIELE, supra note 18, at 38. 56

In this regard, it might without insinuating monocausal connections be mentioned that the sole announcement of the OMT program spared its execution and that the desired development of the interest rates was achieved to a considerable extent.

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II. The OMT Program and the Prohibition of Monetary Financing Pursuant to Article 123 Paragraph 1 TFEU The second major EU law objection to the OMT program put forward by the FCC is the alleged infringement of Article 123, paragraph 1 TFEU prohibiting monetary financing of 57 the member States by, among others, the ECB. At face value, however, this provision prohibits only the primary market purchase of sovereign bonds, meaning the purchase directly from the emitting Member State. Article 18.1 of the ESCB statute, on the other hand, in principle permits sovereign bonds purchases. But, the CJEU convincingly seized the FCC’s suggestion to teleologically construe the prohibition in Article 123, paragraph 1 TFEU: According to both courts, a circumvention of the prohibited primary market purchase by a secondary market purchase amounting equally to monetary financing must 58 be precluded. There is however disaccord on the required safeguards. In part, the CJEU follows the FCC: As regards the omission of a prior concrete announcement which could motivate primary market purchases ultimately amounting to stooge operations, and as regards the prerequisite of a period of standstill after the primary market purchase to 59 allow a formation of market prices, the CJEU follows the FCC in general; but it estimates 60 the conditions set out in the ECB’s press release as being sufficient. As to two other criteria, the CJEU departs from the FCC’s suggestions: The latter had inferred its objection that the OMT program amounted to unlawful monetary financing especially from the lack of a privileged creditor status entailing the risk of an involuntary participation in a debt cut 61 and from the increased default risk of the bonds concerned. According to the CJEU, the risk of a debt cut decided upon by the other creditors of the member State concerned is inherent in a purchase of bonds on the secondary market – an operation which is authorized by the Statute without being conditional upon the ECB having privileged 62 creditor status. As to the increased default risk of the sovereign bonds potentially covered by the OMT program, the CJEU is of the opinion that the restrictions of this 57

See, e.g., SCHMIDT, supra note 4, at 323 et seq.. For the assumption of such infringement regarding the SMP program, see, e.g., SEIDEL, supra note 20, at 512; Matthias Ruffert, Der rechtliche Rahmen für die gegenseitige Nothilfe innerhalb des Euro-Raums, BITBURGER GESPRÄCHE JAHRBUCH 2011/I 15, 23 (2012) (regarding the SMP program). 58

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 paras. 97 et seq..

59

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 paras. 366, 414 et seq., paras. 104 et seq..

60

However, the CJEU does regrettably not respond to the FCC’s apprehension that the OMT announcement had suggested the ECB ultimately turning into a “lender of last resort,” see OMT Decision, BVerfG, Case No. 2 BvR 2728/1 366, 415; cf. MAYER, supra note 6, at 2001 et seq. 61

See, in detail, OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 412 et seq.; the additional argument inferred from the possibility of holding the bonds until maturity is convincingly estimated as not being of pivotal importance, OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 118. 62

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 126; see also OHLER, supra note 27, at § 4, para. 75.

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program sufficiently ensure that the purchases are limited to the restoration of the 63 transmission mechanism. Additionally, according to the CJEU the strict conditionality of the program avoids that the impetus of the member States concerned to follow a sound 64 budgetary policy might be lessened. It is not easy to say which of the positions is ultimately more convincing given the unwritten prohibition of circumventing the primary market purchase ban enshrined in Article 123, paragraph 1 TFEU, the more so as the future program‘s conditions have only been scarcely set out in a press release and the program has not been started. I am of the opinion that it cannot be inferred from the existing preliminary information of the OMT program with sufficient certainty that it would have violated the prohibition of monetary financing had it been performed. This assumption is not equivalent to denying the FCC’s objections‘ accuracy. Rather, I doubt whether the time for a substantial judicial review of the merely announced OMT program had already been ripe. III. Conclusion: The Absence of an Evident Transgression of EU Competences One might of course not agree with all of these assumptions and be of the opinion that the ECB has exceeded its mandate under European constitutional law and that it has infringed upon Article 123, paragraph 1 TFEU. But, departing from the FCC’s ultra vires approach, this is not sufficient, as a manifest and grave transgression of EU competences is required 65 according to Honeywell as I will expound below. Taking into consideration all the difficulties shown above, it seems not arguable that the ECB has evidently exceeded its 66 mandate. By the same token, the infringement of the prohibition of monetary financing which is not even directly provided for in Article 123, paragraph 1 TFEU is far from being 67 evident. With this reference alone the FCC could have dealt with the OMT proceedings: Applying the Honeywell standard, they are at least ill-founded due to the lack of a manifest exceeding of its competences by the EU. To make things more delicate, as regards the prohibition of monetary financing an ultra vires action does not a priori come into consideration for the following reason: An alleged substantive violation of EU law must be clearly distinguished from a transgression of EU competences. The EU can of course violate the Treaties by legal actions whose competence is unquestionable. A legal concept of 63

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 112.

64

Id. at paras. 116, 121.

65

See infra at B.I.1.1.

66

See KUMM, supra note 14, at 214 (“But whatever the case may be, it is clearly and evidently implausible to claim that the ECB’s policies are clearly and evidently in violation of the EU’s competencies.”); BAST, supra note 14, at 179; Franz C. Mayer, Rebels Without a Cause? A Critical Analysis of the German Constitutional Court’s OMT Reference, 15 GERMAN L.J. 111, 136 (2014); but see SIEKMANN & WIELAND, supra note 20, at 9 (“Looking at the overall syystem of the distribution of competences, the transgression gets close to the line the court has drawn in its previous decisions.”). 67

The Organstreit proceeding is not further addressed here.

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competence encompassing lawfulness and thus regarding any unlawful action as being substantially ultra vires might be conceivable but is useless: It would broaden the ultra vires approach beyond recognition. Therefore, the alleged infringement by the ECB of the prohibition enshrined in Article 123, paragraph 1 TFEU is not covered and thus not 68 approachable by the FCC’s ultra vires review of EU actions. This might elucidate why the FCC has associated its ultra vires review with its constitutional identity review of EU actions—and thereby I pass on to the second part of this note. B. The FCC’s Constitutional Review of EU Law in the Light of the OMT Case I. Critical Assessment of the FCC‘s Procedural and Substantial Assumptions Concerning Ultra Vires Review of EU Law 1. The FCC’s Conception of Ultra Vires Review and its Inherent Inconsistencies The FCC’s concept of ultra vires review of EU actions is based on the premise that EU law derives its legal force from the member States: The FCC therefore denies the constitutional 69 nature of European integration as well as the autonomy of the EU legal order. Therefore, the member States’ consent to the founding Treaties is and remains the source for the legal force of any EU organs’ action – and that entails that ultra vires actions are not binding on the member States. It is this premise which enables the FCC to scrutinize EU actions against the benchmark of the treaties’ competences, thereby marginalizing the 70 founding treaties’ assignment of ultra vires review to the CJEU alone. The persuasiveness of the FCC’s premises on the legal force of EU law and its application in Germany has long 71 and often been challenged. In my view, the decisive inconsistencies are the underhand intermixture of monism and dualism, the misconception of the anticipation of the application order regarding supranational actions contained in the legislative consents to the founding Treaties, the contradiction between the ultra vires conception and the 72 Honeywell prerequisite of a manifest and grave transgression of EU competences, and the implicit equation of unlawfulness and invalidity which is unfamiliar to EU law. 68

See also WENDEL, supra note 33, at 630 et seq.

69

As to the diverging notions of autonomy in this regard, see ANNE PETERS, ELEMENTE EINER THEORIE DER VERFASSUNG EUROPAS 242 et seq. (2001). 70

TEFU art. 19 para. 1(2) & art. 263 para. 4.

71

For a concise overview and critique, see generally Mehrdad Payandeh, Constitutional review of EU law after Honeywell: Contextualizing the relationship between the German Constitutional Court and the EU Court of Justice, 48 COMMON MKT. L. REV. 9 (2011); Erich Vranes, German Constitutional Foundations of, and limits to, EU Integration: A Systematic Analysis, 14 GERMAN L.J. 75 (2013); compare with further references, HEIKO SAUER, STAATSRECHT III, § 9 para. 18 et seq. (2015). 72

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], July 6, 2010, Case No. 2 BvR 2661/06, paras. 286, 304 et seq.,

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1.1. Legal Force, Monism and Dualism, and Domestic Application Order The FCC’s concept of ultra vires review contains three inherent contradictions regarding the application of EU law in the domestic legal orders of the member States. First, the relationship between EU law and municipal law can be explained either by a monist or by a dualist approach. The FCC traditionally follows a dualist approach, acting on the 73 assumption that there are two distinct – however not unconnected – legal orders. But, pluralism of legal orders stands for a plurality of basic norms in a Kelsenian 74 understanding. The legal force of norms of distinct legal orders emanates inevitably from different sources—otherwise there would simply be no distinct legal orders! The FCC in contrast starts from a dualist approach and coincidentally assumes that the legal force of EU law flows invariably from domestic law. I do not want to comment on whether a dualist or a monist approach is adequate, instead my point is that the FCC either deviates from its dualist conception or even follows a monist approach in fact. Second, following a dualist approach, it is coherent to require an application order (Rechtsanwendungsbefehl) for EU actions. Without such an order, those actions would not be applicable in domestic law—only the Rechtsanwendungsbefehl thus bridges the gap 75 between the distinct legal orders. Yet, the EU can make use of supranational actions not depending on any implementation or execution by the member States: Notably EU regulations “shall be directly applicable in all member States” pursuant to Article 288, paragraph 2 TFEU. Such direct application means nothing else than an application not necessitating a specific domestic application order. But, under a dualist regime, the requirement of an application order is indispensable. The application order for supranational actions must therefore be conceived of as an anticipated application order 76 inherent in the consent to the EU’s supranational capacities. This anticipation of the application order entails an automatic take-over of all supranational EU actions. In contrast, the FCC assumes that an EU action is relevant and thus applicable in the domestic legal order only under condition that the EU competences have not been exceeded. The anticipated and thus necessarily unconditional application order is thereby turned into a http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2010/07/rs20100706_2bvr266106en. html. 73

See, explicitly, BVerfG, Case No. 2 BvR 1481/04 at paras. 307, 318.

74

See, above all, HANS KELSEN, REINE RECHTSLEHRE 62 et seq. (1934).

75

See, in commendable clarity, Matthias Jestaedt, Der Europäische Verfassungsverbund – verfassungstheoretischer Charme und rechtstheoretische Insuffizienz einer Unschärferelation, in RECHT DER WIRTSCHAFT UND DER ARBEIT IN EUROPA 637, 657 et seq. (Rüdiger Krause, Winfried Veelken & Klaus Vieweg eds., 2004). 76

See SAUER, supra note 71, at § 6 para. 30 and § 8 para. 17.

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situational and conditional case-by-case adoption. This profoundly misunderstands the character of supranational actions and their domestic application. Third, if one shares the FCC’s understanding of the member States‘ consents as the normative basis for the legal force of EU actions, the reservation brought about by the FCC‘s Honeywell decision in 2010 according to which ultra vires actions are binding on Germany and thus form parts of the domestic legal order unless the transgression of EU 77 competences is manifest and grave is—as desirable as it may be as an act of constitutional appeasement—simply illogical: If the application order bridges the gap between the two distinct legal orders and if the application order only comprehends EU actions which are based on competences transferred by the member States, it remains unclear how a “regular” (i.e. not manifest and grave) ultra vires action becomes part of the 78 domestic legal order. Apparently, the FCC has in mind some kind of balancing. On the one hand, there is the explicit constitutional commitment for a German participation in European integration in Article 23, paragraph 1 of the Basic Law. On the other hand, there is the apprehension that Germany might, by an at least factual usurpation of the 79 Kompetenz-Kompetenz by the EU, lose its statehood. It is however highly questionable if 80 81 such balancing is at all feasible and, if so, what are the standards to be applied. 1.2. The Equation of Unlawfulness and Invalidity Under EU Law Lastly, the FCC’s premise that only EU actions within the limits of the EU’s competences are encompassed by the application order and thus effective in the German legal order presupposes a premise which has never been explicitly addressed and perhaps not even apprehended: The equation of unlawfulness and invalidity. Only under the condition of such equation can it be argued that the Rechtsanwendungsbefehl does not bridge the gap between the distinct legal orders, as the ultra vires action is void under EU law and cannot therefore be the object of an application order. Indeed, for German law this equation is, at least as far as legislative action is concerned, widely assumed (but regrettably scarcely

77

Bundesverfassungsgericht, [BVerfG] [Federal Constitutional Court], June 22, 2011, 126 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 286, 304. 78

See Josef Isensee, Der Selbstand der Verfassung in ihren Verweisungen und Öffnungen, 138 ARCHIV DES

ÖFFENTLICHEN RECHTS (AÖR) 325, 353 et seq. (2013). 79

Cf. BVerfGE Case No. 2 BvE 2/08 at paras. 267, 352.

80

Legal force is, at least from a positivist approach, nothing which could be balanced or graduated.

81

See Andreas Funke, Virtuelle verfassungsgerichtliche Kontrolle von EU-Rechtsakten: der Schlussstein?, 26 ZEITSCHRIFT FÜR GESETZGEBUNG 166, 178 et seq. (2011); Heiko Sauer, Europas Richter Hand in Hand? – Das Kooperationsverhältnis zwischen BVerfG und EuGH nach Honeywell, 22 EUROPÄISCHE ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT 94, 97 (2011).

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scrutinized). Yet, under EU law it is unanimously presumed by the CJEU and legal 83 scholars that unlawfulness does not lead to invalidity. Therefore, even ultra vires actions remain in force until their annulment—and this means that a transgression of EU competences does prevent neither legal force under EU law nor application in domestic 84 law following a dualist approach. 1.3. Standard and Exclusivity of the FCC’s Ultra Vires Review In the aftermath of the Maastricht judgment, it had been unclear whether any German court was competent for an ultra vires review and a possible declaration of an EU action 85 being ineffective in Germany. This is the implication of the assumption that the legislative consent to the founding Treaties originates the domestic legal force of EU law. Hence, the 86 standard for ultra vires review is not constitutional but subconstitutional, and the interpretation of statutes is the everyday business of ordinary courts in Germany. In contrast, the FCC has, in its Lisbon judgment, expressly stated that ultra vires review of EU 87 actions lies in its exclusive competence. From a constitutional policy perspective this is of 88 course to be welcomed: Only the FCC, and this only after a referral to the CJEU, can decree a disregard of an EU action in Germany. No other court is entitled to instigate the grave constitutional conflict such declaration would inevitably evoke for the EU. But, from a constitutional law perspective this approach is hardly explicable, as it is not the FCC’s task to intervene in statutory interpretation by the ordinary courts: The analogy to Article 100, 89 paragraph 1 of the Basic Law which might be envisaged by the FCC is out of the question, and the ordinary courts’ competences cannot be convincingly curtailed only pointing to Germany’s constitutional Europarechtsfreundlichkeit. 82

See, e.g., joined Cases 15-33 et al./73, Kortner, 1974 E.C.R 177, para. 33; and Case C-137/92 P, Comm’n v. BASF, 1994 E.C.R. I-2555, para. 50. 83

See, in detail, Claudia Annacker, Die Inexistenz als Angriffs- und Verteidigungsmittel vor dem EuGH und dem EuG, 16 EUROPÄISCHE ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT 755 et seq. (1995). 84

See FUNKE, supra note 81, at 180; cf. BAST, supra note 14, at 171.

85

See, with further references, HEIKO SAUER, JURISDIKTIONSKONFLIKTE IN MEHREBENENSYSTEMEN 190 (2008).

86

Cf. WENDEL, supra note 33, at 628 et seq..

87

It has been recommended to the legislature the establishment of a new constitutional proceeding, obviously understanding that there is no procedural way to realize the claimed monopoly de lege lata, see BVerfGE Case No. 2 BvE 2/08, at 267, 354 et seq.. 88

89

BVerfGE Case No. 2 BvR 2661/06, at paras. 286, 204 et seq..

See more in detail, FUNKE, supra note 81, at 176 et seq.; Heiko Sauer, Kompetenz- und Identitätskontrolle von Europarecht nach dem Lissabon-Urteil – ein neues Verfahren vor dem Bundesverfassungsgericht?, 52 ZEITSCHRIFT FÜR RECHTSPOLITIK 195, 197 (2009); see also Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 37 BVerfGE 271, 291 et seq. (1974 – Solange I, dissenting opinion of Judges Martin Hirsch, Hans Rupp & Walter Rudi Wand).

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2. The FCC’s Ultra Vires Review of the OMT Program: Elements of Confusion In sum, it is, as a matter of principle, highly questionable whether the underlying premises of the FCC’s concept of ultra vires review can be endorsed. Admittedly, this has long been more than controversial; so it is improbable that the positions in this dispute can be 90 altered or even reconciled. It is all the more important whether the premises are at least consequently pursued in the FCC’s OMT referral. This is to answer in the negative. 1.1. Domestic Legal Relevance as a Disregarded Prerequisite of the FFC’s Ultra Vires Conception Commentators to the OMT case have in part pointed to the mere existence of an ECB’s press release and thereby questioned the legal character of the OMT program which has in 91 fact never been implemented. This observation is of relevance because the ultra vires construction—at least in its initial form—encompasses only legal acts: Only legal acts can be declared to have no legal force within the domestic legal orders of the member States. The ECB’s Governing Council has taken an—internal—decision on technical features of outright monetary transaction the core elements of which have been communicated to the public by means of a press release. The legal nature of this decision cannot be denied, even if one might question the existence of external legal consequences of such decisionmaking. Be it as it may: What is crucial is not only the legal nature of the decision on OMT, but the question whether the alleged ultra vires act is capable of producing legal effects 92 within the domestic legal orders of the member States. The assumption that ultra vires actions are not encompassed by the domestic application order, be it convincing or not, is in any case irrelevant for EU actions that are not aimed at producing such effects. The decision on a future program of sovereign bonds purchases is such an action neither

90

Regarding the irreconcilable premises of the CJEU and the FCC as to the character of the EU legal order and its primacy, see, above all Josef Isensee, Vorrang des Europarechts und deutsche Verfassungsvorbehalte – offener Dissens, in VERFASSUNGSSTAATLICHKEIT, FESTSCHRIFT KLAUS STERN 1239 (Joachim Burmeister, Michael Nierhaus, Günter Püttner & Michael Sachs eds., 1997); JESTAEDT, supra note 75, at 657 et seq.; Reiner Wahl, Die Schwebelage im Verhältnis von Europäischer Union und Mitgliedstaaten. Zum Lissabon-Urteil des Bundesverfassungsgerichts, 48 DER STAAT 587 (2009). 91

92

See, e.g., MAYER, supra note 66, at 119 et seq.; cf. KLEMENT, supra note 29, at 189.

Cf. Jörg Peterek, Rechtschutz vor dem Bundesverfassungsgericht im Zusammenhang mit der “Euro-Rettung,“ in 3 LINIEN DER RECHTSPRECHUNG DES BUNDESVERFASSUNGSGERICHTS – ERÖRTERT VON DEN WISSENSCHAFTLICHEN MITARBEITERINNEN UND MITARBEITERN 553, 558 et seq. (Yvonne Becker & Friederike Lange eds., 2014), with further references. Interestingly, Peterek estimates this being the background of the FCC’s statement regarding the inadmissibility of the complaints directed against the ECB’s SMP program in its previous jurisprudence, Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 129 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 124, 175 [2011 – Financial assistance for Greece and EFSF] (see additionally infra note 121), while the FCC regrettably not touches this decisive point as to the OMT program.

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producing nor requiring domestic effects. I neither question the economic effects of the program nor the feasibility of the ECB acting ultra vires when launching such program. But, a transgression of EU competences of such action is domestically irrelevant as it does not call for domestic application. For this reason alone, the ultra vires doctrine does not apply to the ECB’s OMT program. The only conceivable ECB action with domestic relevance within the OMT framework would be an instruction of the national central banks pursuant to Article 14.3 of the ESCB Statute to take part in the sovereign bonds purchase. Such instruction could be considered legally irrelevant from the Bundesbank’s perspective if it constituted a manifest and grave transgression of competences. The Bundesbank would then be obliged under constitutional law—at least in its interpretation by the FCC—to refuse acting in accordance with the ECB instruction notwithstanding the breach of EU law thereby entailed. Apart from the question whether the ECB could reasonably refrain from bringing such an 94 unlawful denial before the CJEU in the special violation proceeding provided for in article 35.6 of the ESCB Statute, the potential conflict of diverging legal obligations under EU and 95 domestic law can easily be evaded: Although the ECB open market operations are usually carried out by the national central banks according to the key for capital subscription, this procedure is not mandatory under Article 12.1 ESCB Statute, as the implementation is 96 decentral “to the extent deemed necessary and appropriate.” In other words, the ECB and its OMT or other sovereign bonds purchase programs do not depend on the German 97 Federal Central Bank’s contribution. This is important to note as a possible FCC dictum obliging the Federal Central Bank not to take part in the OMT program would ultimately be of little avail.

93

This is in my view disregarded by Henner Gött, Die ultra vires-Rüge nach dem OMT-Vorlagebeschluss des Bundesverfassungsgerichts, 49 EUROPARECHT (EUR) 514, 522 et seq. (2014). 94

Even if the ECB instruction was in fact ultra vires it would nevertheless be binding unless annulled by the ECJ; such proceeding could be instituted by the Federal Government (compare article 35.1 of the ESCB Statute). 95

See in detail, but in my opinion not convincing as far as the denied Bundesbank’s obligation to follow an eventual FCC prohibition to take part in the implementation of the OMT program is concerned, MAYER, supra note 66, at 127. 96

See in detail GAITANIDES, supra note 27, at 115; OHLER, supra note 27, at § 2 para 41; Christine Steven, Art. 12 ESCB Statute, in KOMMENTAR ZUR EUROPÄISCHEN WÄHRUNGSUNION margin number 39 et seq. (Helmut Siekmann ed., 2013). 97

See also MAYER, supra note 66, at 127 et seq.

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1.2. The Option of Directly Challenging EU Ultra Vires Actions before the FCC and the Relevance of Potential OMT Losses for the German Federal Budget I move on to the constitutional complaints’ purpose and object. Before the OMT case, the question whether a potential ultra vires action can be directly challenged before the FCC had not been raised explicitly. In Honeywell, the only constitutional proceeding regarding an ultra vires action (and not only general observations on the FCC’s EU law review within 98 the framework of amendments of the founding Treaties ), the plaintiff had considered the CJEU’s Mangold judgment as being ultra vires but had challenged a judgment of the Federal Labor Court which had relied on it; so the FCC’s jurisdiction was clear-cut in that 99 case and allowed for an indirect review of EU law. But, can the ECB’s OMT announcement itself be challenged before the FCC? What makes the FCC’s referral extremely difficult to fathom is its jumbling of three different potential objects of constitutional review: the alleged EU ultra vires action itself (i.e. the ECB’s OMT announcement), a further ultra vires action that might be based on it in future (i.e. a possible execution of the announced program of sovereign debts purchases), and unlawful omissions of German State organs to oppose or challenge the OMT announcement. To review the alleged EU ultra vires action is not as implausible as it may seem: Indeed it is, taking general international law into consideration, quite certain that, originally, the FCC’s jurisdiction exclusively corresponded 100 to acts of German State organs. But, according to the FCC’s famous Maastricht 101 102 approach, supranational EU actions can, as a matter of principle, be themselves challenged as they may affect German citizens and their fundamental rights no less than 103 the exercise of German public authority. There are of course considerable reasons 98

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Feb. 7, 1992, 89 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 155, 187 et seq.; Bundesverfassungsgericht, [BVerfG] [Federal Constitutional Court], Feb. 7, 1992, 123 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 267, 351 et seq. 99

See Bundesverfassungsgericht, [BVerfG] [Federal Constitutional Court], July 6, 2010, 126 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 286, 298 et seq.; the origin of the FCC’s ultra vires review is its Kloppenburg decision whose object, however, was an German courts’ decision as well (which had disregarded a previous CJEU judgment allegedly ultra vires). See Bundesverfassungsgericht, [BVerfG] [Federal Constitutional Court], Apr. 8, 1987, 75 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 223, 243. 100

Initially, this was the clearly expressed view of the FCC, see Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 22 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 293, 295. 101

89 BVERFGE, 155 (175).

102

The same is true as regards supranational actions by other international organizations as for example the European Patent Organization. For the requisite constitutional jurisprudence see, e.g., Christian Walter, Grundrechtsschutz gegen Hoheitsakte internationaler Organisationen, 129 ARCHIV DES ÖFFENTLICHEN RECHTS 39, 50 et seq. (2004); SAUER, supra note 71, at § 6 para. 30. 103

Thus, the public authority envisaged in Article 93, paragraph 1, number 4 lit. a) of the Basic Law encompasses, in a teleological interpretation, acts of State organs as well as supranational EU actions; this is however not undisputed, see, e.g., Klaus Ferdinand Gärditz & Christian Hillgruber, Volkssouveränität und Demokratie ernst genommen – zum Lissabon-Urteil des BVerfG, 64 JURISTENZEITUNG (JZ) 872, 874 (2009) with further references.

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against this premise; yet as it is a well-established constitutional premise is to be discussed whether it is pertinent: not only for the FCC’s fundamental rights’ review of EU law but also for its ultra vires review of EU law. Acting on the FCC’s former Maastricht premise, EU ultra vires actions can be challenged by means of an individual constitutional complaint provided that an appellant’s constitutional right is affected. This depends on the nature and the outcome of the challenged EU action and is certainly possible, especially for regulations or supranational decisions by EU organs. However, the ECB’s OMT announcement does not affect or even infringe on the Basic Law’s fundamental rights, and this quite apparently: Even if one presumed that Article 14 104 of the Basic Law protecting property encompassed currency stability, this guarantee would not be affected as there is to date no palpable reason to assume that the ECB’s 105 sovereign bond purchase programs might result in a significant devaluation of the Euro. Therefore, the only right that might be affected is the citizens’ right to take part in parliamentary elections according to Article 38, paragraph 1(1) of the Basic Law. This guarantee, in principle rather unsuspicious to furnish a benchmark for the FCC’s review of EU law, has since the Maastricht judgment successively been enhanced and understood as leverage for individual complaints against European integration in constitutional 106 jurisprudence. The original premise lied in an individual right to prohibit excessive transfers of powers to the EU which might result in the German Bundestag degenerating to an ultimately 107 fictitious forum of democracy. This right, nota bene initially aimed not at the EU but only at the German legislation transferring powers to the EU under Article 23, paragraph 1(2) of the Basic Law, was developed into a constitutional right to the EU fulfilling democratic 108 requirements and to Germany not forfeiting its Statehood by the Lisbon judgment and finally into an individual right not to have the Bundestag’s budgetary sovereignty curtailed in the framework of bilateral, EU and ESM action fighting the European debt crisis. The individual thus acts as a kind of trustee or even custodian of constitutional concerns which have not been (and hardly could have been) assigned to individual enforcement; thus, the recent supercharge of the FCC’s competences to attend European integration has not without cause been challenged as establishing a bluntly off-system constitutional actio 104

The FCC has always left this open, see Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 97 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 350, 372 et seq.; Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 129 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 124, 173 et seq.; see HERRMANN, supra note 50, at 338 et seq.. 105

See also SIEKMANN & WIELAND, supra note 20, at 6.

106

See, e.g., SAUER, supra note 71, at § 9 paras. 47 et seq..

107

See 89 BVERFGE 155 (171 et seq.).

108

See 123 BVERFGE 267 (329 et seq.).

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popularis in EU matters. Generally, is must be questioned whether Article 38, paragraph 1(1) of the Basic Law, if at all boosted substantially and thereby applicable to European integration, can reasonably have another addressee than the German Bundestag: Even assuming that other organs or organizations might through their conduct erode the Bundestag’s democratic vigor—this does not automatically turn a procedural guarantee that refers to the Bundestag’s creation and is intended to set the preconditions for such vigor in a substantive guarantee directed against any possible endangerment of German democracy. A claim of excessive transfer of powers by the Bundestag might still be in line with Article 38, paragraph 1(1) of the Basic Law, and it might even be argued that there is an individualized prohibition of devolving the famous Kompetenz-Kompetenz to the EU. But an allegation of an EU organ acting ultra vires is quite far from any arguable 110 substantive content of this individual right, particularly as there is a clear difference between the EU generally usurping Kompetenz-Kompetenz, a problem to be addressed only under Article 23, paragraph 1(1) of the Basic Law and thus left to the political organs, and the EU acting beyond its competences in a single case. Challenging an alleged EU ultra vires action under Article 38, paragraph 1(1) of the Basic Law is therefore in my view 111 mistaken. But I do not want to elaborate more on the arguments that can raised against this substantive upgrading of the foremost procedural guarantee in Article 38, paragraph 1(1) 112 of the Basic Law. I prefer to analyze whether, following all these assumptions and particularly the one regarding budgetary sovereignty, the ECB’s OMT announcement might be conceived of as affecting Article 38, paragraph 1(1) of the Basic Law. The answer is no, and this explains why the FCC suggests that it follows another path. Foremost, two of the major concerns regarding the ECB’s sovereign bond purchases continuously voiced must be rejected: Neither is there any legal or de facto obligation for the German Bundestag to take steps of recapitalization of the Federal Central Bank and/or the ECB that could have been foreseeably triggered by an execution of the OMT program, nor might such an execution 109

See, e.g., Christoph Schönberger, Die Europäische Union zwischen “Demokratiedefizit” und Bundesstaatverbot, 48 DER STAAT 535, 539 (2009); Martin Nettesheim, “Euro-Rettung” und Grundgesetz, 46 EUROPARECHT (EuR) 765, 768 (2011); Klaus Ferdinand Gärditz, Beyond Symbolism: Towards a Constitutional Actio Popularis in EU Affairs? A Commentary on the OMT Decision of the Federal Constitutional Court, 15 GERMAN L.J. 183, 190 (2014); BAST, supra note 14, at 169; MAYER, supra note 66, at 136; SAUER, supra note 71Error! Unknown switch argument., at § 9 para. 50 with further references; defending the FCC’s position among others KAHL, supra note 4, at 208; GÖTT, supra note 93, at 534 et seq.. 110

See GÄRDITZ, supra note 109, at 191 et seq.

111

Id. at 200. In my view, this is right in regretting that the “concept of ultra vires control will decay into a permanent angry citizens‘ complaint”; in contrast advocating a “principal” ultra vires complaint, Karsten Schneider, Der Ultra-vires-Maßstab im Außenverfassungsrecht, 139 ARCHIV DES ÖFFENTLICHEN RECHTS (AÖR) 196, 253 et seq. (2014). 112

Remarkably, the FCC itself adverts to this criticism. See 129 BVERFGE 124 (169 et seq.).

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ultimately lead to relevant losses for the Federal budget that could question the Bundestag’s democratically essential capacity to act. The perception that losses incurred through the OMT (or any other sovereign bond purchase) program must necessarily be compensated with injections of fresh capital ultimately stemming from the member States 113 is based on a misunderstanding of the functioning and peculiarities of central banks: In general, losses can be recorded in the balances even for a long time without necessarily 114 having to be compensated, as long as the general confidence in the central bank’s 115 functioning is not put into question. Moreover, notwithstanding the necessary appearance on the balance sheet, central banks can increase the amount of available 116 money without necessitating incoming payments. Both reactions to eventual losses incurred by a sovereign bonds purchase program which exceed the reserve fund and the currency reserves would lead to a reduction or even drop out of the ECB’s payouts for the national central banks according to Article 32.5 of the ESCB Statute which, on its part, could consume the German Central Bank’s annual distribution in favor of the Federal budget. But, the concern that the ECB by means of its sovereign bond purchase programs might virtually grasp into the member States’ purses is incorrect: There is no legal automatism of money being transferred from Berlin to Frankfurt, neither to the ECB nor to 117 the Federal Central Bank. Scenarios in which the ESCB incurs losses of an amount that the confidence in its functioning is put in to question, as a result of which it might become unavoidable for the Bundestag to vest the Bundesbank with fresh capital to keep the system running, are highly speculative at present; thus, there is, to date, neither any kind 118 of factual obligation that could question the Bundestag’s budgetary autonomy. The risk 113

For the differences between central banks and commercial banks, see Jens-Hinrich Binder, Drohende Zentrabankinsolvenz?, 70 JURISTENZEITUNG 328, 330 et seq. (2015). 114

For the national central banks in the Eurozone this is in dispute, see Julian Langner, Preliminary Notes to Art. 28-33 ESCB Statute, in KOMMENTAR ZUR EUROPÄISCHEN WÄHRUNGSUNION at margin number 11 et seq. (Helmut Siekmann ed., 2013). 115

Compare in this regard, Willem Buiter, Can Central Banks Go Broke?, CENTRE FOR ECONOMIC POLICY RESEARCH POLICY INSIGHT NO. 24 (2008). 116

This does not refer to the increase of capital stock pursuant to article 28.1 of the ESCB Statute—apart from the fact that such increase is equally not relevant for the Federal Budget. See LANGNER, supra note 114, at margin no. 8; BINDER, supra note 113, at 331. 117

The details which cannot be elaborated on here are in dispute. See, e.g., HERRMANN, supra note 50, at 811; MAYER, supra note 6, at 2002; Roland Ismer & Dominika Wiesner, Die OMT-Vorlage des Bundesverfassungsgerichts – Eine dogmatische Kritik auf Grundlage juristisch-ökonomischer Analyse, 68 DIE ÖFFENTLICHE VERWALTUNG (DÖV) 81 et seq. (2015); BINDER, supra note 113, at 333 et seq. (assuming that there is a legal obligation of the member States to recapitalize their central banks if the functioning of the ESCB is seriously put into question); Peter Sester, The ECB’s Controversial Securities Market Programme (SMP) and its role in the relation to the modified EFSF and the future ESM, 9 EURO. CO. & FIN. L. REV. 156, 164 et seq. (2012); LANGNER, supra note 114, at margin number 9 et seq.; and Simon, in this issue. 118

OHLER, supra note 27, at § 4 para. 75; Simon, in this issue; Wolfgang Weiß, Das deutsche Bundesverfassungsgericht und der ESM: Verfassungsjustiz an den Grenzen der Justiziabilität, in NEUE EUROPÄISCHE

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which foreseeably remains for the Federal budget is a long-term shortfall of the Federal Bank’s payouts which are at present usually scheduled at 2.5 billion Euros per annum. Such shortfall, currently amounting to roughly just under one percent of the entire budget, can hardly be conceived of as affecting the democratic capacity to act; apart from that, the Euro System might generally incur (and has in past incurred) losses through open market 119 operations. For these reasons, the assumption that the ECB’s OMT announcement affects or infringes the petitioners’ rights under Article 38, paragraph 1(1) of the Basic Law is refuted even on the basis of the FCC‘s substantive understanding of this right. 1.3. The Option of Indirectly Challenging EU Ultra Vires Actions before the FCC This elucidates why the FCC has chosen another path of tackling alleged ultra vires actions by the ECB. Already in its 2011 judgment on the German participation in financial assistance for Greece, the Court had held that the ECB’s purchases of sovereign bonds could not be challenged in a constitutional complaint: Such actions fell without the scope of its jurisdiction, because Article 93, paragraph 1, number 4, lit. a) of the Basic Law 120 encompassed only actions of the German public authority. In its OMT referral, the FCC 121 retains this remarkable overruling of the Maastricht jurisprudence which should have been elaborated on or at least clarified. If the FCC is to be understood as stating that in 122 future no EU action can be directly challenged in front of it, this would constitute a revocation of the long standing Solange II-jurisprudence according to which—albeit under the condition that a sufficient level of fundamental rights’ protection within the EU is generally no longer maintained—EU actions can, as well as German acts of implementation 123 124 or execution, be subject to constitutional review. It seems however highly improbable FINANZARCHITEKTUR, 113, 133 (Peter Hilpold & Walter Steinmair eds., 2014). For a more critical view, see SESTER, supra note 117, at 164 et seq., ISMER & WIESNER, supra note 117, at 86 (questioning with good cause whether factual constraints are at all legally relevant). 119

WEIß, supra note 118, at 136 (convincingly expressing the view that the original Bundestag’s consent to the EMU covers eventual ESCB losses by means of open market operations); see also OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 413. 120

129 BVERFGE 124 (175).

121

Peterek suggests that there is no overruling of the Maastricht approach as the challenged acts did not have supranational character. PETEREK, supra note 92, at 558. This is of course right, and the FCC might have reasoned that way, but it did not—what the FCC expressed is in my opinion not mistakable, as Peterek deems, but rather clear even if perhaps not convincing. 122

The same would be true for supranational actions of other international organizations. Cf. the texts cited, supra note 102. 123

See Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 118 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 79, 95 et seq.. 124

73 BVerfGE 339 (378 et seq.); Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 102 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 147, 161.

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that the FCC by a surprise coup wanted to irrevocably do away with its fundamental 126 rights review of EU law just in a moment of major excitement surrounding the CJEU’s 127 Åkerberg Fransson judgment which, at least when one takes into consideration the 128 simultaneous Melloni judgment , seriously calls into question the scope of application and the assertiveness of the member States’ fundamental rights guarantees. The FCC refers not to the OMT announcement itself but to possible omissions of German State organs to oppose or challenge this announcement. This grasp is clearly intended to put the FCC’s jurisdiction out of the question—it covers without a doubt any unconstitutional omission of German State organs. But the FCC’s new omission related ultra vires construction cannot evenly work out for three reasons: From the outset, the idea of an opposition of whatever kind by German State organs against an alleged EU ultra vires action contravenes the initial premise of the German Rechtsanwendungsbefehl as the source of legal force of EU law actions in the domestic legal order: If this Rechtsanwendungsbefehl, for the reasons set out by the FCC, does not encompass ultra 129 vires actions, they attain no legal force in Germany. If therefore at least serious ultra vires actions do not arrive in the German legal order—why oppose? The lack of an application order makes such intervention unnecessary, so that there is no reason for a German State organ to complain about something which, from the perspective of the domestic legal order under the FCC’s assumptions, does not exist and therefore must not be observed or even applied. The omission related ultra vires construction is therefore incoherent from the outset. Second, assuming with the FCC that the OMT announcement is illegal under EU law and assuming that a constitutional obligation to oppose to ultra vires actions is in general conceivable, the complaints are about current and not future infringements of the Basic Law, about omissions which can already be qualified as unlawful. The unlawfulness of these omissions could at best be substantiated if the ultra vires action in question 130 constituted a violation of German fundamental rights itself —in other words: The 125

The fundamental rights review might however be revitalized as part of the new constitutional identity review, see SAUER, supra note 81, at 96 et seq. 126

See Bundersverfassungsgericht [BVerfG] [Federal Constitutional Court], 133 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 277, 313. 127

Case C-617/10, Åkerberg Fransson (Feb. 26, 2013), http://curia.europa.eu/.

128

Case C-399/11, Melloni v. Ministerio Fiscal (Feb. 26, 2013), http://curia.europa.eu/.

129

As regards the modification of this premise by the Honeywell criteria of a manifest and grave transgression of EU competences, see supra B.I.1.1. 130

The idea is plainly that the fundamental right violated by the EU ultra vires action virtually defends itself triggering an obligation to work towards the cessation of the infringement by opposing in whatever fashion to the transgression of competences.

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concept which aims at German omissions is nothing but the other side of the coin compared with the direct ultra vires review of EU actions. If the ultra vires action as such, and this has been shown above with regard to the OMT announcement, does not affect fundamental rights under the Basic Law, this is equally true for the omission of opposing to this announcement. The lack of a fundamental rights’ relevance of the OMT announcement can thus not be bypassed by the exchange of the review’s object—the omission related ultra vires construction is thus old wine in new skins. We should furthermore, and this is my third objection, not be tricked by the FCC’s 131 pretended recourse to preventive constitutional protection. A preventive protection of a right is never directed against a present omission allegedly unlawful as is the case here— rather it is invariably directed against a prospective action that would be unlawful and can for this reason be precluded under certain enhanced conditions. The FCC feigns the lacking difference between the action and the omission related ultra vires construction shown above by the simultaneous differentiation between repressive and preventive legal protection, the latter having quite exceptional character in the German legal order. The advantage of the preventive construction is obvious: In contrast to the regular repressive (or retrospective) complaints, the preventive (or prospective) complaint does not require a current infringement of rights—it is satisfied with suspected future unlawful conduct. But again, complaints that target current omissions of German State organs are repressive in nature and thus require existing infringements of rights which are absent in the case at hand. Eventual preventive complaints would in contrast aim at future ECB actions resting upon its OMT announcement, i.e. potential measures of execution of this program. If, according to the FCC’s new approach, EU actions allegedly ultra vires cannot directly be challenged before it, this must be a fortiori true for future EU action, apart from the problems inherent in measuring future EU actions against the benchmark of its competences. Should the FCC therefore have concentrated on proper preventive legal protection against the execution of the OMT program? After all, it is apparent that such execution with the possible participation of the German Federal Bank is the Courts’ major economic policy concern. This construction might have been more convincing as a starting point, but it would not have rendered the complaints admissible either: The execution of the OMT program would have affected fundamental rights of German citizens just as little as the program’s announcement for the reasons set out above. In other words, the omission related ultra vires construction does not render dispensable the lacking infringement of German fundamental rights by the alleged ultra vires action. Apart from these objections, it has been rightly criticized that the FCC neither elucidates 132 who might have opposed nor how such intervention might have taken place. What 131

132

Contra GÖTT, supra note 93, at 518 et seq. (2014) (opining that the recourse is consequential).

See OMT Decision, BVerfG, Case No. 2 BvR 2728/1 366,424 et seq. (dissenting opinion of Judge Gertrude Lübbe-Wolff).

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comes into consideration must quite clearly be dismissed: The Federal Government could 133 have raised an action for annulment before the CJEU under Article 263 TFEU —but is a constitutional obligation to file a suit against a potential ultra vires action conceivable and reasonably enforceable, apart from the question of the Government’s legitimate political margin of appreciation, as long as the potential applicant considers the EU action in question being lawful? The Federal Central Bank’s President could have voted against the OMT program in the ECB Governing Council—and he has, so the question of a requisite 134 constitutional obligation can be subordinated. What ultimately remains are various forms of expressions of displeasure by different State organs, ahead the Bundestag — but I am not convinced of construing legal obligations without clear substance aimed at a 135 conduct that is not legally binding. In sum, it should be apparent that the new FCC’s omission related ultra vires construction is a dead end. II. The OMT Program and the FCC’s Constitutional Identity Review of EU Law 136

As is well known, this FCC’s hitherto vague standard of constitutional identity control, again based on Article 38, paragraph 1(1) of the Basic Law, is as assailable as its ultra vires doctrine. Of course, Article 23, paragraph 1(3) and Article 79, paragraph 3 of the Basic Law delimit a boundary of the legislation transferring powers to the EU: The pouvoirs constitués are prevented from circumventing their constitutional limits by means of a transfer of powers. Does this however necessarily mean that an EU action touching upon those limits 137 and thereby the German constitutional identity, if such eventuality is at all conceivable, is legally not existent from a domestic law perspective? What might, as a matter of principle, work out even in the area of competences cannot reasonably be translated into the area of substantive limits: While it might be feasible to complain that the EU exercises powers that the member States have not assigned to it, it is not equally feasible to complain that there is no act of transfer for certain legal actions in EU competence that violate a member States constitutional identity. This approach would be conceivable only referring to the ancient principle nemo plus iuris transferre postest quam ipse habet, the precondition of which would however be a rather inappropriate conception of the EU public authority as an simple aggregation of the member States’ public authorities—an 133

Cf. Opinion of Advocate General Cruz Villalón, supra note 3, at paras. 70 et seq..

134

Such a constitutional obligation is feasible only under condition that the Governors of the member States’ Central Banks still act as State organs bound by their requisite constitutional laws when they take part in decisions of the ECB’s Governing Council—this is not without any doubt. 135

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 425 et seq. (dissenting opinion of Judge Gertrude Lübbe-Wolff). 136

For an overview, see, e.g., CHRISTIAN CALLIESS, STAATSRECHT III 330 et seq. (2014); and SAUER, supra note 71, at § 9 paras. 43 et seq.. 137

For a convincingly skeptical view, see FUNKE, supra note 81, at 169.

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aggregation ab initio bound by the sum of the constitutional limits of all of its member States. It is much more convincing not to exchange the addressee of Article 23, paragraph 1(3) and Article 79, paragraph 3 of the Basic Law and thus to be of the opinion that only German State organs and in the EU context particularly the legislative transfer of powers can violate Germany’s constitutional identity and are therefore to be reviewed by the FCC 138 in line with its Lisbon judgment. On the basis of this assumption, possible EU interference with the constitutional identity is by no means legally irrelevant. On the one hand, a non-respect by the EU for the national identities of their member States is unlawful 139 under EU law. On the other hand, the German Constitution is not without any defense against an alleged EU intrusion in its identity: This problem is addressed by Article 23, paragraph 1(1) of the Basic Law, ultimately calling into question Germany’s ongoing participation in the European integration if the essential structural preconditions such as democracy, rule of law—including of course the respect for the member States’ national identities—and fundamental rights’ protection in the EU are no longer fulfilled. I am therefore of the opinion that a constitutional identity review of single EU actions by the FCC is not arguable de constitutione lata. But this is, of course, contested, and I might therefore briefly argue why, even on the basis of the FCC’s premises, the ECB’S OMT announcement does not touch upon the German constitutional identity. As set out 140 above, the OMT program is neither at risk of producing legal or factual obligations of the Bundestag to provide fresh capital, thus the budgetary sovereignty is not endangered, nor does it entail relevant losses for the Federal budget that might question the Bundestag’s democratically essential capacity to act. In sum, the FCC’s identity control of EU actions is unconvincing as a matter of principle and incorrectly applied in the OMT referral. C. European Constitutional Balance after the CJEU’s OMT Judgment I. Attempting an Outlook for the Ongoing FCC proceedings 1. The Inherent Jeopardy of the “Honeywell” Approach In sum, the FCC has deliberately confounded the doctrines of ultra vires review and of constitutional identity review, the review of EU measures and of domestic actions, the review of positive actions and of omissions, as well as of repressive and of preventive legal 141 protection in order to disguise that it primarily addresses constitutional policy concerns. There may of course be many economic and political reasons against the selective purchase of sovereign bonds of over-indebted member States of the Eurozone. On the 138

See 123 BVERFGE 267 (356 et seq.).

139

See OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 386 et seq..

140

See supra B.I.2.2.

141

But see KUMM, supra note 14, at 214.

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other hand, it is widely assumed that most notably the ECB President’s famous proclamation on 26 July 2012 that the ECB was ready to do whatever it took—within its 142 mandate—to preserve the Euro and the following Governing Council’s OMT announcement were the cornerstones of the common currencies continuity. The mandate of the ECB thus is and will be in the future highly controversial; but as has been shown, most of these issues cannot be translated into legal arguments under present European constitutional law. With regard to the OMT program, the FCC’s Honeywell approach has proved to be double-edged and inherently explosive: The prerequisite of a manifest and grave transgression of EU competences was intended to reconcile the contradicting premises of the two interconnected constitutions and its courts at least to a certain extent: speaking of Europarechtsfreundlichkeit, i.e. the principle of friendliness towards EU law, illuminating in principle the persuasiveness of the primacy of EU law, and establishing the 143 mandatory consultation of the CJEU through the referral procedure. But the FCC has perhaps outmaneuvered itself: It is always forced to assert a manifest and grave transgression of competences already in its referral—otherwise the question of whether the EU has exceeded its competences is not ultimately relevant for the outcome of the FCC 144 proceeding and the referral is inadmissible. Thus, what was intended to be an act of 145 institutional cooperation inevitably amounts to a severe conflict. The CJEU is put under 146 pressure, as the referral implies the possibility of the FCC executing its ultra vires reservation which could, from the EU perspective, of course not be accepted. The FCC itself is a priori in an uncomfortable position: As a result of a validation of the EU action in question, the FCC is stuck between a rock and a hard place as the OMT referral reveals: Either it backpedals or it finally bites, the latter having repeatedly been demanded by 147 German scholars. But the consequences of such an exit from the European 142

See Verbatim of the Remarks made by Mario Draghi, Speech by Mario Draghi, President of the European Central Bank, available at https://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html. 143

See Bundersverfassungsgericht [BVerfG] [Federal BUNDESVERFASSUNGSGERICHTS [BVERFGE] 286, 303 et seq..

Constitutional

Court],

ENTSCHEIDUNGEN

DES

144

This problem is inherent in the conception of challenging EU actions being ultra vires not on the basis of a substantive guarantee but on Article 38, paragraph 1(1) of the Basic Law: Such a constitutional complaint is without success even if the CJEU assumes a transgression of EU competences, thus it can from the outset be successful only under condition of a manifest and grave transgression which is therefore required for the admissibility of a referral by the FCC. Cf. Wendel, supra note 33, at 633 et seq.. 145

See Gabriele Britz, Grundrechtsschutz durch das Bundesverfassungsgericht und den Europäischen Gerichtshof, 42 EUROPÄISCHE GRUNDRECHTE-ZEITSCHRIFT (EuGRZ) 275, 281 (2015); KUMM, supra note 14, at 203. 146

See GÄRDITZ, supra note 109, at 199 (“Uttering barely concealed threats is a questionable method of communication between the courts. . . .”); contra Udo Di Fabio, Karlsruhe Makes a Referral, 15 GERMAN L.J. 107, 109 (2015). 147

Cf. Christian Hillgruber, Nicht nur Zähne zeigen – beißen!, NEUE JURISTISCHE WOCHENSCHRIFT (NJW), Editorial to issue 8 (2014); Niels Petersen, Karlsruhe Not Only Barks, But Finally Bites—Some Remarks on the OMT Decision of the German Constitutional Court, 15 GERMAN L.J. 321 (2014).

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constitutional consent are perhaps as incalculable as those of other forms of exits permanently discussed. In sum, it appears as if the doctrine of ultra vires review after Honeywell amounts to a no-win situation. 2. Possible Paths of the Upcoming Judgment One can only hope, and this also seems probable, that the FCC is not going to hold that the OMT announcement constitutes a manifest and grave transgression of EU competences. An important aspect in disfavor of this outcome is that an EU action validated by the CJEU can only be conceived of as a manifest and grave transgression of competences if the CJEU 148 has by the same token manifestly and gravely exceeded its competences —a conclusion which the FCC is well advised to evade. There is at least one arguable and convincing way to avoid this without the loss of face—and many commentators would inevitably highlight such loss with pleasure if the FCC came around to the CJEU’s findings: The FCC might concede that the CJEU’s position is at least arguable and does therefore not constitute a 149 manifest transgression of competences. This appears to be a convincing solution which would simultaneously be acceptable to both courts, as the CJEU’s interpretations are not challenged without the FCC having to follow it. It is, however, not to forecast if the FCC will take that line. But, there are not many alternatives, as the somewhat classical approaches, 150 such as trying to inflict restrictions on the EU from a constitutional law perspective or strengthening the German State organs‘ influence within the European institutional setting do not seem to come into consideration after the CJEU has already had its say. Additionally, will the FCC really obligate the Federal Government to bring an action for annulment against every possible ultra vires EU action? Finally, what might seem as a congenial solution for the lack of political harm due to the outdated nature of the OMT program, namely prohibiting the Bundesbank from taking part in the program, will not gain relevance for any of the current or future programs: As set out above, the ECB is not dependent on the national central banks‘ participation. Such interdiction would from the 151 balance sheet perspective ultimately be irrelevant. The range of possible outcomes of the forthcoming FCC decision is thus wide—and perhaps there are still new concepts being developed in Karlsruhe. But whatever solution the FCC is going to prefer, it should keep an eye on its mandate under the Basic Law. After the CJEU has, even if not largely following 148

See also FUNKE, supra note 81, at 184; MAYER, supra note 6, at 2002.

149

Cf. KLEMENT, supra note 29, at 19; THYM, supra note 14, at 263. Moreover, according to Honeywell, the CJEU disposes of Fehlertoleranz. See 126 BVERFGE 286 (307). 150

See OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 417 (suggesting an interpretation of the OMT program which would fulfill German constitutional requirements which is, however, largely not followed by the CJEU). 151

See Article 32 of the ESCB Statute; OHLER, supra note 27, at § 2 para 20; Julian Langner, Art. 32 ESCB Statute, in KOMMENTAR ZUR EUROPÄISCHEN WÄHRUNGSUNION margin number 41 et seq (Helmut Siekmann ed., 2013).

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the FCC’s suggestions for restrictive Treaty interpretation, refrained from any teasing, 152 provocation, or flamboyancy and thereby apparently attempted to evade the final showdown in the notorious last word saga (which some are longing for), it should be feasible for the FCC to find a proper answer. 3. The Future of the FCC’s EU law Review in a More General Perspective It is of course improbable that the FCC seizes the suggestions that have been exposed above and by many other commentators and cuts back its ultra vires review as a matter of 153 principle. But beyond the details of the ultra vires review, the OMT case also affords the opportunity for a more general clarification of the future of the FCC’s doctrines of review of EU law. Particularly, the FCC should illustrate whether it really wants to abandon its former Maastricht approach of EU actions being in principal challengeable before it and thereby to finally retire from a fundamental rights review of EU law as a theoretical reserve option. It should also shape in more detail the hitherto quite cryptic constitutional identity review of EU law: The time has come to put the cards on the table and to elucidate the substance of this approach and not least its relations with ultra vires review and 154 fundamental rights review. If there are constitutional limits to the primacy of EU law, these limits must be discernable. It is thus more probable that there will be interesting findings on the future of the FCC’s EU law review in general than that the FCC really instigates the ultimate constitutional conflict which would in any case not be favorable to either of the sides — and least of all for European integration altogether.

152

As regards the “spirit of cooperation,” see also Simon, in this issue.

153

For example, it seems worth considering to associate the Honeywell criteria of a manifest and grave transgression of competences with the requirements for an EU organ’s action being exceptionally void. 154

I am of the opinion that there is at least a categorical difference between the ultra vires review aiming at competences and therefore at the EU Treaties, and the constitutional identity review aiming at substantive law and therefore at the German Constitution, while the fundamental rights review could be conceived of as a subset of the constitutional identity review. There is a broad range of opinions on that issue. See, e.g., Hans-Georg Dederer, Die Grenzen des Vorrangs des Unionsrechts – Zur Vereinheitlichung von Grundrechts-, Ultra-vires- und Identitätskontrolle, 69 JURISTENZEITUNG 313 (2014); Angela Schwerdtfeger, Europäisches Unionsrecht in der Rechtsprechung des Bundesverfassungsgerichts – Grundrechts-, ultra-vires- und Identitätskontrolle im gewaltenteiligen Mehrebenensystem, 50 EUROPARECHT (EUR) 290 (2015); PAYANDEH, supra note 71, at 9; MAYER, supra note 66, at 128 (2014).

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II. The Inevitable Fading out of Sovereignty in European Constitutional Law This leads to my last point: the future of the European multi-level constitutionalism between the extremes of a theoretical conception of shared sovereignty and the insisting 155 on the last word of the member States’ constitutions. Whereas many member States assume that the public authority of the EU is inevitably derived from the member States, which it was of course as a starting point, the CJEU has since van Gend & Loos been referring to a new legal order of international law whose subjects are not only the member 156 States but also their citizens. Without determining the essence and the basis of such autonomization, the CJEU thus assumes autonomy of the EU legal order in terms of autonomy of legal force. The original dissent is therefore precisely on there being only one or rather several Grundnormen in a Kelsenian understanding underlying the interconnected constitutions in the EU legal order: The premise of the national 157 constitutions being endowed with the last word is correct if there is only one and the same Grundnorm, whereas the imagination of shared sovereignty — an oxymoron which cannot conceal the disappearance of conventional sovereignty — inherently presupposes distinct paths of precluding legal force. What is and has always been standing doubtful is the source of EU law and, therefore, no less than the fate of sovereignty: Sovereignty and 158 power are less shared than in abeyance. But, the peculiarity of European constitutionalism, and its particular force, has ever been the synchrony of incrementally progressing though standing doubtful: Said abeyance therefore has not led the European 159 Constitution and the constitutions of the member States (nor the CJEU and the FCC) to be conceived of as two spent swimmers, clinging together and struggling, unable to move 160 like Macbeth’s and Macdonwald’s soldiers. Rather, European integration has been successfully living with the uncertainty on the autonomy of EU law for decades, and it is 155

This position is represented by the FCC and several other constitutional courts. Whereas the FCC specifies ten other constitutional courts with a comparable jurisprudence on EU law (OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at paras. 366, 387), MAYER, supra note 66, at 133 et seq. states that only the Czech Constitutional Court openly endorses the German ultra vires approach. 156

Case 26/62, van Gend en Loos v. Nederlandse Administratie der Belastingen, 1963 E.C.R. 7, 25.

157

Critically as regards the notion of the last word, see Peter Häberle, Das retrospektive Lissabon-Urteil als versteinernde Maastricht II-Entscheidung, 58 JAHRBUCH DES ÖFFENTLICHEN RECHTS (JöR) 317, 329 (2010). 158

ISENSEE, supra note 90, at 1239 et seq.; WAHL, supra note 90, at 587 et seq..

159

Whatever term seems adequate to describe its interconnection—on the not only notional controversy regarding “Staatenverbund” or “Verfassungsverbund,” see CHRISTIAN CALLIESS, DIE NEUE EUROPÄISCHE UNION NACH DEM VERTRAG VON LISSABON 63 et seq. (2010); Heiko Sauer, Von Weimar nach Lissabon? Zur Aktualität des Methodenund Richtungsstreits der Weimarer Staatsrechtslehre bei der Bewältigung von Europäisierung und Internationalisierung des öffentlichen Rechts, in ZUR AKTUALITÄT DER WEIMARER STAATSRECHTSLEHRE 237, 246 et seq., 252 et seq. (Ulrich Jan Schröder & Antje von Ungern-Sternberg eds., 2011). 160

See WILLIAM SHAKESPEARE’S MACBETH, act 1, sc. 2 (referring to “the revolt newest state”) (“Doubtful it stood, as two spent swimmers that do cling together and choke their art.”).

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insecure whether this problem can be overcome or even addressed endogenously within 161 law. When the FCC, in 1974, first implicitly claimed the last word with its famous Solange I decision, there was considerable excitement; this excitement has continuously gone along with its whole jurisprudence regarding EU law. But, this jurisprudence has, notwithstanding its critique, undeniably had positive effects on European integration, to 162 name only the development of fundamental rights in the EU. And the FCC has scrupulously paid attention to never crossing the red line: It has always been well versed in the art of claiming the last word without ever vocalizing it. This might have become considerably more difficult with its OMT referral—but in the absence of a political determination, standing doubtful as to the fate of sovereignty it is still of vital importance and ultimately without alternative in the EU.

161

See JESTAEDT, supra note 75, at 670 et seq.; see also Philipp Reimer, L’Ètat c’est le droit! Zur Aktualität der Staatslehre Hans Kelsens im Angesicht sich wandelnder Staatsgewalt, in L’ÉTAT C’EST QUOI? STAATSGEWALT IM WANDEL 37, 49 et seq. (Lisa Heschl et al. eds., 2015). 162

Joseph H. H. Weiler, The Reform of European Constitutionalism, 35 J. COMMON MKT. STUDS. 97, 125 (1997) (comparing this influence with the cold war’s logic of mutually assured destruction).

Special Section The CJEU’s OMT Decision After the OMT Case: The Supremacy of EU Law as the Guarantee of the Equality of the Member States By Federico Fabbrini

Abstract This article analyzes the recent judgment of the European Court of Justice (ECJ) in Gauweiler, answering the first preliminary reference ever by the German Constitutional Court (BVerfG), on the legality of the Outright Monetary Transaction (OMT) program of the European Central Bank (ECB). As the article explains, the ECJ rejected any possible claim of illegality of a key program devised by the ECB at the height of the Euro-crisis. However, because the BVerfG had defined the OMT program as ultra vires, and had threatened to strike it down if the ECJ did not reach the same result, the article defends the principle of the supremacy of European Union (EU) law, indicating that a possible nullification of the OMT program by the BVerfG would be clearly unlawful. To re-affirm the supremacy of EU law, the article argues that this principle is functional to ensure the equality of the member states before the law, preventing each country of the EU from cherry-picking which provisions of EU it likes or not. As the article suggests, respect of the principle of the supremacy of EU law — including by the BVerfG — is ultimately in the interest of every EU member state, including of Germany.

 Associate Professor of European & International Law, iCourts (Center of Excellence for International Courts), Faculty of Law, University of Copenhagen. Email: [email protected]

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A. Introduction 1

On 16 June 2015, the European Court of Justice (ECJ) delivered its judgment in Gauweiler. In this case, the ECJ answered the first preliminary ruling ever raised by the Bundesverfassungsgericht (BVerfG), concerning the legality of the Outright Monetary Transaction (OMT) program designed by the European Central Bank (ECB) at the height of 2 the Euro-crisis. The OMT program — which followed on ECB President Mario Draghi’s 3 pledge to do “whatever it takes” to save the euro — allowed the ECB to purchase government bonds on the secondary market when necessary to restore the normal transmission of monetary policy stimulus, on the condition that the member state(s) 4 concerned entered a program of economic adjustment. In its preliminary reference, the BVerfG had been explicit in describing the OMT program as in violation of European Union 5 (EU) law and asking the ECJ to strike down the challenged measure as ultra vires. Moreover, the BVerfG had reserved to itself a right to invalidate the OMT program in 6 Germany if the ECJ had not followed its interpretation. In Gauweiler, however, the ECJ soundly rejected the view that the OMT program exceeded the powers conferred to the ECB by the EU Treaties and that violated the prohibition of monetary financing, fully backing the action of the ECB. For many years now, the ECJ and the BVerfG have been advancing incompatible claims 7 about their relations within the EU multilevel constitutional order. While the ECJ has always held that EU law prevailed over conflicting national law, and that, as a corollary of 8 this, only the ECJ was entitled to rule on the validity of a measure of EU law, the BVerfG has advanced opposite claims, reserving to itself the power to review whether action by 1

Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (June 16, 2015), http://curia.europa.eu/.

2

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, Case No. 2 BvR 2728/13, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2014/01/rs20140114_2bvr272813en. html. 3

See Mario Draghi, Speech at Global Investment Conference, London (July 26, 2012), available at http://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html (last visited Aug. 11, 2015). 4

EUR. CENT. BANK, Technical Features of Outright Monetary Transaction, (Sep. 6, 2012), available at http://www.ecb.europa.eu/press/pr/date/2012/html/pr120906_1.en.html (last visited Aug. 11, 2015). 5

For an analysis of the BVerfG preliminary reference, see the case notes collected in 15 GERMAN L.J. (2014) (issue 04). 6

BVerfG, Case No. 2 BvR 2728/13 at para. 5.

7

See Ingolf Pernice, Multilevel Constitutionalism in the European Union, 27 EUR. L. REV. 511 (2002) (introducing the concept of multilevel constitutionalism to define the relationship between the ECJ and national courts in the EU). 8

See Bruno De Witte, Direct Effect, Supremacy and the Nature of the Legal Order, in THE EVOLUTION OF EU LAW 177 (Paul Craig & Grainne de Burca eds., 1999).

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the EU institutions — including by the ECJ — complied with the integration mandate 9 authorized by Germany through the ratification of the EU Treaties. Until now, the ECJ and the BVerfG had found ways to accommodate their stands, averting a direct confrontation, 10 and this unsettled arrangement attracted the praise of many scholars. However, the case of the OMT program reveals the dangers connected with this protracted ambiguity. With 11 the OMT case now pending again before the BVerfG, an outright defiance by Germany’s highest court of the decision of the ECJ —with the consequential nullification of the act of the ECB in Germany — appears an increasingly likely prospect. Faced with this threatening scenario, this article makes a new case in favor of the supremacy of EU law. This article argues that EU law should be interpreted as unequivocally trumping conflicting national law, and prohibiting a member state’s highest court from unilaterally nullifying an EU act. In fact, following the judgment of the ECJ upholding the legality of the OMT program of the ECB, it should be, in my view, crystal clear that any ruling by the BVerfG invalidating a measure of EU law upheld by the ECJ, and suspending its effect in Germany, would be blatantly unlawful. After Gauweiler, a possible decision by the BVerfG to disobey the ECJ should be treated as a breach of EU law — and should be pursued by the EU institutions (as well as by the German political branches of government) as a danger for the survival of the EU. At a time where the future of the Eurozone is at stake, the struggle over the legality of the OMT program of the ECB ought to be used as the opportunity to settle once and for all the constitutional uncertainty which has so far characterized the EU, and to affirm the supremacy of EU law. In making the case for the supremacy of EU law, however, this article advances a new argument, based on equality between the member states. As the article explains, the struggle for supremacy should not be interpreted within a bilateral framework — opposing the ECJ to the highest court of a single member state: in casu, Germany. Rather, it should be appraised in a multilateral context, where action by one member state(’s highest court) affects also the other member states (and their courts). When seen from this perspective, it appears that only the supremacy of EU law can ensure the equality of member states before the law. If a single member state(’s highest court) could claim to decide unilaterally on the validity of EU law, this would put it above the other states, creating a situation of inequality where the law applies to some EU member states but not to others. Because the EU is based on a reciprocal delegation of powers by all the member states, if a single country, by the action of its highest court or otherwise, could set for itself the terms of its participation to the EU, this would undermine the mutual conditions on the basis of which the member states have decided to create a Union. 9

See generally BILL DAVIES, RESISTING THE EUROPEAN COURT OF JUSTICE (2012).

10

See generally CONSTITUTIONAL PLURALISM IN THE EU AND BEYOND (Matej Avbelj & Jan Komarek eds., 2012).

11

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Case No. 2 BvR 2728/13 (pending).

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Differently put, the article advances a transnational argument for the supremacy of EU law, suggesting that the case for supremacy should not be based on ontological claims, grounded in some inherent value or authority, but should rather be defended in light of the principle of equality between the states. Because of that, the article maintains that the possible counter-arguments do not bite. In particular, the article considers the possible criticisms that the member states retain Kompetenz-Kompetenz, that the EU treaties recognize the national identity of the member states, and that the principle of supremacy is not textually enshrined in primary law, but explains that none of these arguments is such as to lead to a restriction of the principle of supremacy as the guarantee of the equality between the member states. In conclusion the article suggests that respect for the rules is the best guarantee for the survival of the EU — a position forcefully advanced by Germany in the recent handling of the Euro-crisis. Yet, also the supremacy of EU law is a rule of the EU — and Germany’s highest court is also bound by it. Settling the question of supremacy will be beneficial for every EU member state — including Germany. The article is structured as follows. Section B summarizes the judgment of the ECJ in Gauweiler, explaining the reasoning of the ECJ in rejecting claims that the OMT program of the ECB violated its powers and the prohibition of monetary financing. Section C reflects on the implications of the ECJ judgment for the relation with the BVerfG and, anticipating a likely confrontation, makes the case for the supremacy of EU law. Here, in particular, I explain that supremacy should be seen as the necessary condition to guarantee the equality of the member states, and I clarify what would be the obvious risks connected to a situation where each member state (or its highest court) could decide on the application of EU law à la carte. Section D considers possible counter-arguments to the case in favor of the supremacy of EU law, but rejects the view that Kompetenz-Komeptenz, the recognition of national identity, or the absence of a textual codification of the principle of supremacy could introduce an exception to the supremacy of EU law. Section E, finally, concludes, underlining the importance of respecting rules — also by Germany(’s highest court) — at a time when the future of the EU, and the Eurozone, is at stake. B. The OMT Case 12

While the ECJ had already delivered important rulings on Euro-crisis related measures, in Gauweiler the Grand Chamber was faced with the critical question whether the OMT program of the ECB violated EU primary law. As a preliminary matter, the ECJ set aside the procedural argument raised by an intervening party, according to which the ECJ should not have answered the case because the BVerfG in its preliminary reference did not accept as 12

See, e.g., Case C-370/12, Pringle v. Government of Ireland, Ireland and the Attorney General (Nov. 27, 2012), http://curia.europa.eu/; on which see Federico Fabbrini, The Euro-Crisis and the Courts, 32 BERKELEY J. INT’L L. 64 (2014).

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binding and definitive the interpretation to be provided by the ECJ. Rather, the ECJ observed “that, according to [its] settled case-law [. . .] Article 267 TFEU establishes a procedure for direct cooperation between the Court and the courts of the Member 13 States,” and it strongly re-affirmed the principle that “a judgment in which the [ECJ] gives a preliminary ruling is binding on the national court, as regards the interpretation or the validity of the acts of the EU institutions in question, for the purposes of the decision to be 14 given in the main proceedings.” Equally, the ECJ set aside the view that the case ought to be declared inadmissible because the OMT had never been put into operation, holding that 15 “questions concerning EU law enjoy a presumption of relevance.” And it also discarded the claim that the challenge against the ECB ought to have been brought through a direct 16 action of annulment, rather than through a preliminary reference procedure, stating that “it [found] sufficient [that] the national court [wa]s seised of a genuine dispute in which 17 the question of the validity of such an act is raised on indirect grounds.” On the substance of the case, the ECJ separately addressed the questions: First, whether the OMT program exceeded the powers of the ECB in the field of monetary policy, as defined by primary law; Second, whether the action of the ECB violated the prohibition of monetary financing, enshrined in primary law. With regard to the former, the ECJ underlined as a starting point that “Article 3(1)(c) TFEU states that the Union is to have exclusive competence in th[e] area [of monetary policy] for the Member States whose 18 currency is the euro” and that, under the Treaties, “the ECB and the central banks of the Member States whose currency is the euro [. . .] are to conduct the monetary policy of the 19 20 Union.” As the ECJ pointed out, with reference to its previous case law, the ECB “is to be 21 independent when carrying out its task,” but, “[i]n accordance with the principle of conferral of powers set out in Article 5(2) TEU, the [ECB] must act within the limits of the 22 powers conferred upon it by primary law.” In light of this, the ECJ engaged in an analysis 13

Gauweiler, Case C-62/14 at para. 15.

14

Id. at para. 16.

15

Id. at para. 25.

16

See Case T-492/12, von Storch v. ECB, Order of 10 December 2013 (EU General Court declaring inadmissible action for annulment against decision of the ECB), now appealed as Case C-64/14, P von Storch v. ECB, pending. 17

Gauweiler, Case C-62/14 at para. 29.

18

Id. at para. 35.

19

Id. at para. 36.

20

See Case C-11/00, Comm’n v. ECB, 2003 E.C.R. I-7147.

21

Gauweiler, Case C-62/14 at para. 40.

22

Id. at para. 41.

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of the limits between economic and monetary policy, holding that “in order to determine 23 whether a measure falls within the area of monetary policy” it was necessary to assess 24 the objectives of the measures and the instrument used. According to the ECJ, the OMT program certainly fell within the scope of the ECB monetary policy. First, as regards the objectives, the program aimed “to safeguard both ‘an 25 appropriate monetary policy transmission and the singleness of the monetary policy’” — and the fact that OMT “might also be capable of contributing to the stability of the euro area, which is a matter of economic policy [. . .] does not call that assessment into 26 question.” Second, as regard the instrument used, the program “entail outright monetary 27 transactions on secondary sovereign bond markets” — but the ECB Statute granted to the 28 ECB such a power, and the “fact that the implementation of such a programme is made conditional upon full compliance with [...] macroeconomic adjustment programmes does 29 not alter that conclusion.” As the ECJ pointed out, in fact, while OMT may “to some 30 extent, further the economic policy objectives” of economic adjustment programs, such indirect effects do not mean that such a programme must be treated as equivalent to an economic policy measure, since it is apparent from Articles 119(2) TFEU, 127(1) TFEU and 282(2) TFEU that, without prejudice to the objective of price stability, the ESCB is to support the general economic policies in 31 the Union. Moreover, the ECJ ruled that the OMT program complied with the principle of 32 proportionality. Following the Advocate General’s advice, the ECJ acknowledged that, 23

Id. at para. 46.

24

Id.

25

Id. at para. 47.

26

Id. at para. 51.

27

Id. at para. 53.

28

Id. at para. 54.

29

Id. at para. 57.

30

Id. at para. 58.

31

Id. at para. 59.

32

Opinion of Advocate General Cruz Villalón, Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (Jan. 14, 2015), at para. 111,

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because the ECB is tasked “to make choices of a technical nature and to undertake forecasts and complex assessments, it must be allowed, in that context, a broad 33 discretion.” Nevertheless, the ECJ also stated that “where an EU institution enjoys broad discretion, a review of compliance with certain procedural guarantees is of fundamental 34 importance.” Those guarantees include the obligation for the ECB to examine carefully and impartially all the relevant elements of the situation in question, and to give an 35 adequate statement of the reasons for its decisions. Yet, the ECJ concluded that the OMT program passed the suitability and the necessity tests which are the core of proportionality analysis. As regards, in the first place, the appropriateness of OMT program, it held that “it does not appear that that analysis of the economic situation of the euro area [made by the 36 ECB when launching the OMT program] is vitiated by a manifest error of assessment.” In fact, given that questions of monetary policy are usually of a controversial nature and in view of the ESCB’s broad discretion, nothing more can be required of the ESCB apart from that it use its economic expertise and the necessary technical means at its disposal to carry out that 37 analysis with all care and accuracy. As regards, in the second place, the necessity of OMT program, the ECJ ruled the action of 38 the ECB did “not go manifestly beyond what is necessary to achieve [its] objectives.” As the ECJ pointed out, after its announcement the OMT program had never been 39 implemented, its activation is subject to the precondition that the state concludes a 40 program of economic adjustment, and “the commitments which the ECB is liable to enter

http://curia.europa.eu/juris/document/document.jsf?text=&docid=161370&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=10276. 33

Gauweiler, Case C-62/14 at para. 68.

34

Id. at para. 69.

35

Id.

36

Id. at para. 74.

37

Id. at para. 75.

38

Id. at para. 81.

39

Id. at para. 84.

40

Id. at para. 86.

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into when such a programme is implemented are, in fact, circumscribed and limited.” At the same time, in the ECJ’s view the ECB “was fully entitled to take the view that a selective bond-buying programme may prove necessary in order to rectify that disruption [of the 42 monetary policy transmission system],” rendering OMT proportionate. Having ruled that the ECB had not exceeded the powers conferred to it by the Treaties, the ECJ subsequently considered whether OMT violated the prohibition of monetary financing 43 of Article 123 TFEU. In this regard, while the ECJ emphasized that Article 18(1) of the 44 Protocol on the ECB permits the ECB to operate in the financial markets, it acknowledged that the ECB “does not have authority to purchase government bonds on secondary markets under conditions which would, in practice, mean that its action has an effect equivalent to that of a direct purchase of government bonds from the public authorities and bodies of the Member States, thereby undermining the effectiveness of the prohibition 45 46 in Article 123(1) TFEU.” Yet, as it had done in the Pringle case, the ECJ engaged in an historically–informed interpretation of the Treaties and it concluded that from the preparatory work of the Maastricht Treaty it emerged that the prohibition laid down in “Article 123 TFEU [was designed to] encourage the Member States to follow a sound 47 budgetary policy.” Given the logic of Article 123 TFEU, the ECJ found that the features of the OMT “exclude the possibility of that programme being considered of such a kind as to 48 lessen the impetus of the Member States to follow a sound budgetary policy.” First, the OMT program “provides for the purchase of government bonds only in so far as is necessary for safeguarding the monetary policy transmission mechanism and the 49 singleness of monetary policy” – and the states “cannot, in determining their budgetary policy, rely on the certainty that the ESCB will at a future point purchase their government 50 bonds on secondary markets.” Second, the OMT program “is accompanied by a series of

41

Id. at para. 87.

42

Id. at para. 89.

43

Id. at para. 94.

44

Id. at para. 96.

45

Id. at para. 97.

46

See also ALICIA HINAREJOS, THE EURO AREA CRISIS IN CONSTITUTIONAL PERSPECTIVE 126 (2015).

47

Gauweiler, Case C-62/14 at para. 100.

48

Id. at para. 111.

49

Id. at para. 112.

50

Id. at para. 113.

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guarantees that are intended to limit its impact on the impetus to follow a sound 51 budgetary policy.” Finally, the fact that the purchase of government bonds is conditional upon full compliance with the structural adjustment programmes to which the Member States concerned are subject precludes the possibility of a programme, such as that announced in the press release, acting as an incentive to those States to 52 dispense with fiscal consolidation. As a last observation, the ECJ addressed the risk of the potential of losses to which the ECB would be exposed as a result of the OMT program — thus tackling an issue which had been of main concern for the BVerfG, this being the argument on the basis of which it had 53 admitted the challenge against the OMT in the first place. As the ECJ remarked, a central bank, such as the ECB, is obliged to take decisions which, like open market operations, inevitably expose it to a risk of losses and [. . .] Article 33 of the Protocol on the ESCB and the ECB duly provides for the way in which the losses of the ECB must be allocated, without specifically delimiting the risks which the Bank may take in order to achieve the 54 objectives of monetary policy. Otherwise, the ECB Legal Service had emphasized that so far the OMT had cost nothing to the ECB, while preventing potential major losses which would have occurred had the Eurozone broke up — a development that could not be excluded before the OMT program was announced. Hence, the ECJ concluded “that Articles 119 TFEU, 123(1) TFEU and 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the ESCB and the ECB must be interpreted as permitting the ESCB to adopt a programme for the purchase of government 55 bonds on secondary markets, such as the [OMT].” 51

Id. at para. 115.

52

Id. at para. 120.

53

See Mattias Wendel, Judicial Restraint and the Return to Openness: the Decision of the German Federal Constitutional Court on the ESM and the Fiscal Treaty of 12 September 2012, 14 GERMAN L.J. 21, 24 (2013) (explaining that the BVerfG adjudicated the case based on possible financial losses, and their negative effect on the right to vote). 54

Gauweiler, Case C-62/14 at para. 125.

55

Id. at para. 127.

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C. Re-affirming the Supremacy of EU Law The ECJ judgment in Gauweiler puts the BVerfG on a collision course with the EU. In its nd preliminary reference, a six-judge majority of the BVerfG’s 2 Senate had been adamant in 56 defining the OMT program of the ECB as incompatible with EU law. Furthermore, over 57 two strongly worded dissents, the BVerfG had made clear that if the ECJ would not reach its same conclusion, it would still reserve to itself the power to strike down the OMT 58 program as in violation of Germany’s constitutional identity. Because the ECJ decided to back the legality of the OMT program as fully compatible with EU primary law, it would seem inevitable for the BVerfG to disapprove of this ruling, and thus disobey it. If the BVerfG is to follow the pledge it made in the preliminary reference procedure to disregard a possible ECJ judgment with which it disagreed, it seems that the scene is set for the first explicit act of nullification of EU law by the BVerfG. This would precipitate into open war the cold conflict which has characterized for more than four decades the relation between the BVerfG and the ECJ. As it has been suggested, it is still possible that the BVerfG may at the last minute avert a 59 direct confrontation with the ECJ, by inventing an elegant way to backtrack on its pledge. After all, the BVerfG has accustomed its observers with an approach of “barking without 60 biting”. In all the previous cases in which it raised concerns about legal developments in the EU — from Solange, to Bananamarkt, to Honeywell — the BVerfG fired a warning shot against the ECJ, but ultimately managed to avoid a conflict with EU law, developing new 61 concepts to reaffirm its stand while safeguarding the application of EU law. Nevertheless, in this case the BVerfG seems to have taken a position which makes it a lot less easy for it to maneuver than in the past. By referring its first preliminary reference procedure to the ECJ, and explicitly threatening the ECJ that if it did not rule as it wished it would simply 56

BVerfG, Case No. 2 BvR 2728/13 at para. 4.

57

Id. (Separate Opinion of Justice Lübbe-Wolff and Separate Opinion of Justice Gerhardt).

58

Id. at para. 5.

59

See Matthias Goldman, Mutually Assured Discretion, paper presented at the conference on “The ECJ, the ECB and the Supremacy of EU Law” at iCourts, Center of Excellence for International Courts, Faculty of Law, University of Copenhagen (Sept. 2015) (on file with author). 60

See generally Christoph Schmid, All Bark and No Bite: Notes on the Federal Constitutional Court’s ‘Banana’ Decision, 7 EUR. L.J. 95, 95–113 (2001). 61

See generally Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], May 29, 1974, 37 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS 271 (Solange I); Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], July 6, 2010, Case No. 2 BvR 2661/06, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2010/07/rs20100706_2bvr266106en. html (Honeywell).

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disregard its ruling, the BVerfG has dramatically reduced its options to avoid the collision. Unless the BVerfG is ready to make an about face, overturning its aggressive description of the OMT as a bluntly illegal program, we must expect to see the first act of defiance by the BVerfG against EU law. This prospect should be reason for major concern to anyone interested in the survival of the EU. However, the precipitation of the events may actually lead to a welcome clarification of a key constitutional question in EU law: that of supremacy. Until today, the EU has been based on a fundamental ambiguity. While the ECJ has since the founding era 62 63 held that EU law enjoys supremacy over state laws, and, as a corollary of that, that only 64 the ECJ is empowered to rule on the validity of EU acts, the BVerfG has adopted a diametrically opposite view, claiming that it held ultimate authority to review the legality 65 of EU action on the basis of the act of delegation of powers from Germany to the EU. Certainly, the position of the BVerfG is not exceptional: Several other national 66 constitutional courts have, albeit to varying degrees, adopted a similar position. In fact, in 2012 the Czech Constitutional Court even declared for the first time an EU act ultra vires, 67 and thus inapplicable in the Czech Republic. Yet, the BVerfG has been by far the most determined, and influential, court in opposing the ECJ, so the resolution of the conflict on the OMT program may have an evidentiary value for the entire Union. While the struggle between the ECJ and national constitutional courts has been a favorite 68 topic in European constitutional law, a widespread belief among scholars appears to have been that the potential for a real conflict within the European Verfassungsgerichtsverbund 69 was minimal. A burgeoning literature generally identified with the label ‘constitutional pluralism’ has emphasized the ability of national constitutional courts to avert possible 70 conflicts through dialogue and mutual accommodation. In fact, constitutional pluralism 62

Case 6/64, Costa v. ENEL, 1964 E.C.R. 585.

63

See MONICA CLAES, THE NATIONAL COURTS’ MANDATE IN THE EUROPEAN CONSTITUTION 562 (2006).

64

Case 314/85, Foto-Frost, 1987 E.C.R. 4199.

65

See generally Neil MacCormick, The Maastricht-Urteil: Sovereignty Now, 1 EUR. L.J. 259 (1995).

66

See, e.g., Trybunał Konstytucyjny, Case TK 32/09, judgment of Nov. 24, 2010 (Lisbon Treaty) (Poland); Højesteret, Case No. 199/2012 U 2013/1451H, judgment of Feb. 20, 2013 (Lisbon Treaty) (Denmark). 67

See ÚS 5/12, judgment of Jan. 31, 2012 (Slovak Pension XVII) (Czech Republic).

68

See, e.g., THE EUROPEAN COURTS AND NATIONAL COURTS (Anne-Marie Slaughter et al. eds., 1998).

69

See Andreas Voßkhule, Multilevel Cooperation of the European Constitutional Courts: Der Europäische Verfassungsgerichtverbun, 6 EUR. CONST. L. REV. 175 (2010). 70

See Miguel Maduro, Contrapunctual Law: Europe’s Constitutional Pluralism in Action, in SOVEREIGNTY IN TRANSITION 501 (Neil Walker ed., 2003).

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has been hailed as the normatively superior theory to define a non-hierarchical regime 71 such as the one of the EU. However, notwithstanding its appeal in peaceful time, the theory of constitutional pluralism seems to face insurmountable difficulties at a moment in which a member state court such as the BVerfG has openly pledged to disobey a ruling of the ECJ, shattering the fragile compromise on which claims of constitutional pluralism 72 rested. With the BVerfG potentially set to nullify the OMT act of the ECB — and the related decision of the ECJ upholding it — the looming question of supremacy has 73 powerfully returned on the table. My argument is that, when faced with this critical question, the unequivocal answer shall be that EU law prevails. As the BVerfG ponders how to react to the judgment of the ECJ in Gauweiler, it shall know that a decision striking down the action of the ECB, and thus suspending its effect in Germany, would be in blatant breach of the obligations that Germany has subscribed as a member state of the EU, and would open a dramatic crisis in the fabric of our Union, with unpredictable consequences for its future. In making the case in favor of the supremacy of EU law, however, I want to advance here a new justification for it. In my view, the supremacy of EU law — and thus the related prohibition for a member state’s highest court to nullify the decision of an EU institution, validated by the ECJ — should not be seen as the vertical imposition of supranational rule over the will of a member state. Rather, the supremacy of EU law — with the exclusive delegation to the ECJ of the power to declare the invalidity of an EU act — must be defended as the guarantee of the equality of the member states in the EU. The primacy of EU law over opposing claims of the supremacy of national constitutional courts is the conditio sine qua non to ensure that all member states remain equal in the EU. To appreciate this point, we must abandon the traditional bilateral prism through which the struggle between the ECJ and the BVerfG has been observed, and rather embrace a multi-lateral perspective. In academic commentaries the struggle for supremacy is generally analyzed as a clash between the ECJ and the highest court of a single member state: in casu, the BVerfG. Hence, the doctrinal position of the BVerfG on the question of supremacy is defended from a national perspective, or criticized from a supranational perspective — but without paying attention to the effects that this struggle produces to third parties, namely the other member states. Nevertheless, in the context of the EU, as a multi-state compound, the confrontation on supremacy has inevitably implications that go 71

See generally Mattias Kumm, The Jurisprudence of Constitutional Conflict: Constitutional Supremacy in Europe before and after the Constitutional Treaty, 11 EUR. L.J. 262 (2005). 72

See Daniel Kelemen, On the Unsustainability of Constitutional Pluralism, paper presented at the conference on “The ECJ, the ECB and the Supremacy of EU Law” at iCourts, Center of Excellence for International Courts, Faculty of Law, University of Copenhagen (Sept. 2015) (on file with author). 73

See FEDERICO FABBRINI, FUNDAMENTAL RIGHTS IN EUROPE 268 (2014) (arguing that the question of supremacy cannot be side-stepped in debates concerning European constitutionalism).

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beyond the bilateral relations between a specific member state and the EU. If the highest court of a member state makes a claim about supremacy, this does not only affect its oneon-one relations with the ECJ, but it also impacts on the other EU member states (and their courts). Thus, a decision by the BVerfG to nullify an EU act such as the OMT program on the basis of a domestic conception of supremacy directly affects all the other member 74 states of the EU (and of the Eurozone specifically). The connection between the supremacy of EU law and the guarantee of the equality of the member states emerges from the foundational judgment of the ECJ: Costa v. ENEL. While in this case the ECJ grounded the supremacy of EU law over conflicting national law on concerns for the uniform application of EU law, it also emphasized that “[t]he integration into the laws of each Member State of provisions which derive from the [EU] [. . .] make it impossible for the States, as a corollary, to accord precedence to a unilateral and 75 subsequent measure over a legal system accepted by them on a basis of reciprocity.” As Ingolf Pernice has underlined, in the judgment of the ECJ the supremacy of EU law is connected with the principle of non-discrimination: For every individual, the trust in the full respect of equally applicable terms of law by all the others justifies its own obedience. There cannot be privileges nor discrimination. It is ultimately the reciprocity of such mutual trust among citizens as among their Member 76 States which allows a legal system to function. By preventing states from unilaterally re-defining the conditions of their membership in the EU, the principle of supremacy protects the equality of the member states (and their citizens), making sure that they all remain equally bound to the terms they have unanimously agreed to. In fact, the supremacy of EU law — with the connected impossibility for a member state to adopt measures which nullify EU law within its territory — should be read in conjunction 77 with another foundational judgment of the ECJ: Commission v. Luxembourg and Belgium. In this case, the ECJ rejected any use by the member states of general international law 74

See, e.g., Gilles Moec & Mark Wall, Monetary Union After the German Constitutional Court Ruling, Deutsche Bank Research Paper (Feb. 11, 2014) (emphasizing negative consequences for the entire Eurozone of a decision by the BVerfG regarding OMT as ultra vires). 75

Costa, Case 6/64 at 585 (emphasis added).

76

Ingolf Pernice, Costa v ENEL and Simmenthal: Primacy of European Law, in THE PAST AND FUTURE OF EU LAW 47, 49 (Miguel Maduro & Loïc Azoulai eds., 2010). 77

Joined Cases 90 & 91/63, Comm’n v. Luxembourg & Belgium, 1964 E.C.R. 625.

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instruments of self-help, such as retaliation and counter-measures, against another member state (or EU institution) which failed to respect EU law. Whereas a maxim of international law is the ‘exceptio non adimpleti contractus’, according to which a party is not bound by the terms of a contract vis-à-vis another party which fails to respect them, 78 the ECJ denied that this could be the case within the EU autonomous legal order. As William Phelan has recently explained, in the reasoning of the ECJ the rejection of the international law measures of self-help rested on the implicit bargain among the member states, “premised on the acceptance of direct effect / direct application (in Van Gend en 79 Loos and in the Treaty of Rome itself) and supremacy (in Costa).” It is because the EU is supreme over national law — and the contracting parties abide by this rule — that the member states are not entitled in the EU to tit-for-toe each other in case of violations of EU law. In sum, there is in my view a strong argument to be made for the supremacy of EU law in light of the principle of the equality of the member states before the Treaties. A member state(’s highest court) should not be allowed to invalidate an EU law within its territory, because this would call into question the equality of all the states before the law, and thus the reciprocal nature of the commitments undertaken by them when signing the EU 80 Treaties. Incidentally, while my argument is inspired by, and criticizes, a challenge against the supremacy of EU law — with the related pledge to invalidate an EU act — raised by the highest court of Germany, the case made here should be read as being to the advantage of Germany too. It is evident that if the BVerfG could claim the power to re-define for itself the terms of Germany’s participation to the EU, (the highest courts of) other member states could follow suit. Yet, the risks for Germany of a Union à la carte, are too obvious to tell: It would clearly not be in German interest if — say — a Greek or an Italian court could unilaterally set aside the budgetary obligations imposed on the member states by the Stability and Growth Pact, or if France could redefine rules on agricultural policy or Poland discretionally introduce custom duties on German exports. In the end, in the compound order of the EU, the supremacy of EU law is the only guarantee that states will abide by the same rules, mutually depriving themselves of the power to discretionally pick and choose the rules of EU law they like or not.

78

See also Case 26/62, Van Gend en Loos v. Nederlandse Administratie der Belastinghen, 1963 E.C.R. 1.

79

William Phelan, Supremacy, Direct Effect and Dairy Products in the Early History of European Law 5 (EUI, Working Paper 11/2014). 80

See Art. 11 Costituzione (Italy) (stating that Italy allows limitations of sovereignty “in condizioni di parità con gli altri stati”); Art. 88–2 Constitution (France) (stating that France allows transfer of competences to the EU “sous réserve de réciprocité”).

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D. Rejecting the Counter-Arguments The argument I articulate in this article is admittedly not in tune with the Zeitgeist. During 81 the last decade — especially, I would say, since the demise of the Constitutional Treaty — the dominant narrative in the scholarly debate has become increasingly hostile towards 82 claims about the supremacy of EU law. By making the case here in favor of the supremacy of EU law as the guarantee of the equality between the member states, I am aware that I expose myself to three possible criticisms. First, my argument can be described as inconsistent with the Kompetenz-Kompetenz of the member states. Second, my position could be faulted for failing to appreciate the growing importance that respect for national identity has acquired in EU law, including as a possible limit to the supremacy of EU law. Third, my argument can be criticized considering that the supremacy of EU law has not been textually entrenched into EU primary law. In my view, however, none of these arguments is capable to challenge the core of my claim: That the supremacy of EU law intrinsically follows from the equality of the member states under the Treaties and that unless we are willing to accept the domination of one state (per its highest court) over the 83 others, any exception to the supremacy of EU law ought to be resisted. To begin with, the validity of my case is not challenged by arguments about KompetenzKompetenz. As is well known, the BVerfG and some other national high courts have proclaimed that the EU is a creation of international law and that member states remain the masters of the Treaties, with the result that action by the EU institutions which goes 84 beyond the power conferred to them by the states is null and void. In fact, irrespective of 85 whether the EU is an international organization or — say — a supranational federation, Article 5 TEU affirms that the limits of the Union competences are governed by the principle of conferral. As a result of that, action by the EU institutions which exceed the 86 scope of the powers delegated to the EU is unlawful. Yet, according to the BVerfG, as the EU institutions— including the ECJ — do not have the competence to discretionally enlarge their competences, an act by the EU institution which is ultra vires can be struck down by the BVerfG itself as going beyond the delegation of power undersigned by Germany when 81

See also Renaud Dehousse, ‘We the States’: Why the Anti-Federalists Won, in WITH US OR AGAINST US? EUROPEAN TRENDS IN AMERICAN PERSPECTIVE 105 (Nicolas Jabko & Craig Parsons eds., 2005). 82

See, e.g., Armin Von Bogdandy & Stephan Schill, Overcoming Absolute Primacy: Respect for National Identity Under the Lisbon Treaty, 48 COMMON MKT. L. REV. 1417 (2011). 83

See Federico Fabbrini, States’ Equality v States’ Power: the Euro-Crisis, Inter-State Relations and the Paradox of Domination, 17 CAMBRIDGE Y.B. EUR. LEG. STUD. 1 (2015) (emphasizing growing imbalance in interstate relations). 84

Bundesverfassungsgericht [BverfG] [Federal Constitutional Court], Feb. 7, 1992, 89 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS 155, 89 (Maastricht), para. C.II.1.a. 85

See, e.g., Armin Von Bogdandy, The European Union as a Supranational Federation, 6 COLUM. J. EUR. L. 27 (2000).

86

See generally Case C-376/98, Germany v. European Parliament and Council, 2000 E.C.R. I-8419.

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becoming a member of the EU. In the view of the BVerfG, this would be the case 88 precisely with the OMT program of the ECB. However, even if one accepts that the competence on the competence rests with the EU member states, it is a non sequitur that a member state’s highest court is free to declare an EU act ultra vires, with the consequence that the challenged act ceases to have effects within its territory, while remaining valid in the other member states. Under international law, the rule of Kompetenz-Kompetenz is no derogation to the principle of ‘pacta sunt servanda’, and contracting parties to a treaty are reciprocally bound to the terms of the 89 contract. Needless to say, as I shall point out below, EU law endows a state which deems an act ultra vires with the instruments to remedy the possible infringement by the EU 90 institutions of the power conferred on them. Yet, as long as a member state is a party to a multilateral treaty, the principle of equality between the contracting parties implies that decisions taken by the institutions created by the treaty shall prevail against unilateral determinations by the institutions of a member state. Similarly, it is not convincing to claim that the principle of the supremacy of EU law finds a limit in view of the recent recognition of the principle of respect for national identity within the framework of EU law. As a number of scholarly works have emphasized, the Lisbon 91 Treaty has strengthened the protection of national identity in EU law, by entrenching in Article 4 TEU the principle that the EU shall respect the member states’ “national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government.” Moreover, in a several recent judgments the ECJ has accorded greater weight to the respect for national identity — cautiously ruling that this 92 could justify a restriction on the application of EU free movement rules. In fact, some scholars have been vocal in calling on the ECJ to grant even more importance to national 93 identity in its case law. And the BVerfG has capitalized on this debate by claiming that a possible decision to nullify EU law within Germany would be justified in view of protecting

87

See generally Paul Craig, The ECJ and Ultra Vires Action: A Conceptual Analysis, 48 COMMON MKT. L. REV. 395 (2011). 88

See BVerfG, Case No. 2 BvR 2728/13 at para. 5.

89

See Art. 26 Vienna Convention on the Law of the Treaties.

90

See infra note 107.

91

See, e.g., Gerhard van der Schyff, The Constitutional Relationship between the EU and its Member States: The Role of National Identity in Art. 4(2) TEU, 37 EUR. L. REV. 563 (2012); ELKE CLOOTS, NATIONAL IDENTITY IN EU LAW (2015). 92

See generally Case C-208/09, Sayn-Wittgenstein, 2010 E.C.R. I-13693.

93

See FRANÇOIS-XAVIER MILLET, L’UNION EUROPEENNE ET L’IDENTITE CONSTITUTIONNELLE DES ÉTATS MEMBRES (2013).

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the constitutional identity of the state. 95 regard to the OMT case.

94

1019

This situation would occur, once again, with

However, the recognition of member states’ national identity cannot imply a limitation of the principle of supremacy, seen as the guarantee of the equality between the member states. Ironically, this point is reaffirmed precisely by the provision which is typically invoked to justify a restriction of absolute primacy: Article 4 TEU. Although the point seems to have been entirely overlooked in the literature, the text of Article 4 TEU provides first and foremost a recognition of the principle of the equality of the member states, and only secondly — and I argue, in sub-ordine — the recognition of member states’ national identities. As Article 4 TEU textually proclaims, “The Union shall respect the equality of 96 Member States before the Treaties, as well as their national identities.” By putting the equality of the member states before national identity, Article 4 TEU reaffirms a central value in the EU integration project. Therefore, it cannot be interpreted as introducing a national identity-based derogation to the principle of supremacy — whose main purpose is to secure the equality of the member states under the Treaties, as I have maintained above. In other words, the codification of the principle of national identity in the EU Treaties does not call into question the supremacy of EU law. Finally, the fact that the supremacy of EU law is not enshrined in EU primary law does not change the situation either. As it was pointed out above, the ECJ recognized the principle of the supremacy of EU law in the earliest phases of the process of European integration, 97 but the principle itself was never written down in the EU Treaties. In fact, the Convention that drafted the Treaty establishing a Constitution for Europe introduced a new provision, Article I-6, proclaiming that “The Constitution and law adopted by the institutions of the Union in exercising competences conferred on it shall have primacy over the law of the Member States”. Yet, after the failures in the ratification of the Constitutional Treaty, this provision did not find its way into the text of the Lisbon Treaty. Rather, the member states attached to the Treaty a Declaration, which does not have the same value of a Protocol, stating that “in accordance with well settled case law of the [ECJ], the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member

94

Bundesverfassungsgericht [BverfG] [Federal BUNDESVERFASSUNGSGERICHTS 267 (Lissabon), para. 234. 95

See BVerfG, Case No. 2 BvR 2728/13 at para. 5.

96

Emphasis added.

97

Constitutional

Court],

123

ENTSCHEIDUNGEN

DES

See generally Jonas Liisberg, Does the EU Charter of Fundamental Rights Threatens the Supremacy of Community Law?, 38 COMMON MKT. L. REV. 1171 (2001).

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States, under the conditions laid down by the said case law,” and referred to an opinion 99 of the Legal Service of the Council in support of this. Nevertheless, leaving aside the fact that if the member state were unhappy with the principle of supremacy articulated by the ECJ they could have rolled-back on it, which they never did, the fact remains that a codification of the principle of supremacy would not by itself set aside the state sovereignty claims based on the above-mentioned concepts of Kompetenz-Kompetenz and national identity. As the example of the United States (US) shows, even in a Union where the Constitution explicitly proclaimed the supremacy of 100 federal law over state law, several member states had historically advanced the claim that they had a power to review whether federal authorities acted within the limits of the 101 power delegated to it by the states themselves, or respected the states’ rights. In particular, pursuant to the so-called compact theory of the US Constitution, the states of the Union remained the sovereign masters’ thereof, and therefore it was within the power of each state to nullify, or interpose, action by the federal institutions which was seen as 102 exceeding the competences conferred on them, or threatening their sovereign rights. While constitutional transformations in the US— including a Civil War — have falsified the 103 validity of this theory, its very existence makes clear that the supremacy of federal law over state law cannot rely on a simple textual provision, but must be justified through a deeper argument. In fact, it is remarkable to notice how the US Supreme Court has grounded the justification of the supremacy of federal law over state law on arguments about uniformity which are 104 analogous to those advanced by the ECJ in Costa v. ENEL. As the US Supreme Court held in Ableman v. Booth, if the several states could set aside federal law: conflicting decisions would unavoidably take place, and the local tribunals could hardly be expected to be always free from the local influences of which we have spoken. And the 98

Declaration No. 17, Declaration Concerning Primacy, 2012 O.J. (C 326/346).

99

Opinion of the Legal Service (EC) No. 11197/07 of June 22, 2007 (JUR 260).

100

See Art. VI, § 2 U.S. CONST.

101

See, e.g., Virginia Resolution (Dec. 24, 1789); South Carolina Ordinance of Nullification (Nov. 24, 1832).

102

See THEORIES OF FEDERALISM (Dimitrios Karmis & Wayne Norman eds., 2005) (reporting thought of John Calhoun about the US Constitution as an inter-state compact). 103

See DANIEL FARBER, LINCOLN’S CONSTITUTION (2003) (explaining how the Civil War vindicated Daniel Webster’s view of the US Constitution as a constitution). 104

Costa, Case 6/64 at 585.

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Constitution and laws and treaties of the United States, and the powers granted to the Federal Government, would soon receive different interpretations in different States, and the Government of the United States would soon become one thing in one State and 105 another thing in another. In Cooper v. Aaron, the US Supreme Court emphasized that, in the US, the supremacy of US 106 law acts ultimately as the guarantee of the equality between the citizens, while in the previous section I claimed that, in the context of the EU, the supremacy of EU law acts still also as the guarantee of the equality between the states. In conclusion, neither the argument about Kompetenz-Kompetenz, nor that of national identity, nor the fact that supremacy is not textually codified in the Treaties, can justify a restriction to the principle of supremacy of EU law, and empower a member state’s highest court to nullify an EU act within its territory. Nevertheless, this does not mean that a state which is a member of an organization such as the EU is helpless before an action by an EU institution which it deems as ultra vires, or in violation of its constitutional identity. First, Article 263 TFEU makes member states privileged applicants in starting proceedings before the ECJ for violation of primary law. So a state which claims that the EU has acted ultra vires can sue to redress this situation. Second, Article 50 TEU now officially enshrines in the Treaty the right of a member state to withdraw from the EU. Third, states can obtain at times of treaty amendment special protocols which allow them — with the agreement of all other member states — to opt-out of specific provisions of the treaty with which they have insurmountable problems. These mechanisms provide solid protections of a member state’s rights, while being respectful of the equality of the member states. Moreover, they rely on action by a member state’s democratic institutions, such as government and parliament, hence vesting with greater legitimacy the request for special accommodation 107 of national concerns.

105

Ableman v. Booth, 62 U.S. 506, 517–18 (1858).

106

Cooper v. Aaron, 358 U.S. 1, 18 (1958).

107

See generally Steve Boom, The European Union after the Maastricht Decision: Will Germany be the “Virginia of Europe?”, 43 AM. J. COMP. L. 177 (1995) (emphasizing political and legislative, besides judicial, opposition to supremacy in Ante-bellum U.S.).

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E. Conclusion In the summer of 2015, with the integrity of the Eurozone increasingly under challenge due to the revamping of the Euro-crisis in Greece, the German federal government made a 108 strong plea for compliance with rules in the EU. Dealing with a newly elected antiausterity Greek government — which sought to renegotiate the conditions of its financial bailout and to redeem part of its skyrocketing public debt — the German government underlined that mutual trust among the member states can only be based on respect for the rules. As Chancellor Angela Merkel put it at the Bundestag on 17 July 2015: “Pacta sunt servanda. Das heißt, wenn europäische Verträge ihre Gültigkeit verlieren sollen, geschieht das durch einstimmig vorgenommene Vertragsänderungen und Ratifizierungsverfahren. Es geschieht nicht, indem Einzelne aufgrund nationaler Wahlen diese Verträge einfach für null 109 und nichtig erklären können; denn wir sind eine Rechtsgemeinschaft.” Indeed, the EU is a community based on laws. But one of these is the principle of the supremacy of EU law, with the related prohibition for member states to unilaterally invalidate measures of EU law. And this rule applies to Germany(’s highest court) too. On 16 June 2015 the ECJ has delivered a milestone judgment. In Gauweiler, the ECJ answered the first preliminary reference of the BVerfG and ruled that the OMT program devised by the ECB to do whatever it takes to save the euro was compatible with EU law. In referring a preliminary question to the ECJ, the BVerfG had defined the OMT as ultra vires, and pledged to strike it down as in violation of the German Basic Law if the ECJ would not do so. Unless the BVerfG is ready to do an about-face, this raises the likely prospect of a declaration by the BVerfG that OMT is ultra vires and thus deprived of effects in Germany. As I have argued, however, a decision by the BVerfG nullifying the act of the ECB, upheld by the ECJ, would be a blatantly illegal act, defying EU law, and threatening the survival of the EU. As Advocate General Cruz Villalón stated in his Opinion in Gauweiler, indeed, it is “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 110 Member States.” As this article has maintained, the supremacy of EU law is not an arbitrary imposition of supranational authority over the will of a member state. Rather, it is the guarantee that member states will remain equal under the EU Treaties. As member states have accepted to become members of the EU, limiting their sovereignty on a reciprocal basis, if a member

108

See FEDERICO FABBRINI, ECONOMIC GOVERNANCE IN EUROPE (forthcoming 2016) (discussing changes and challenges produced by the Euro-crisis on economic governance in Europe). 109

See Angela Merkel, Speech at the Bundestag, Berlin (17 http://dipbt.bundestag.de/doc/btp/18/18117.pdf (last visited Aug. 11, 2015). 110

July

2015),

available

Opinion of Advocate General Pedro Cruz Villalón, Gauweiler, Case C-62/14 at para. 59 (emphasis in original).

at

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state(’s highest court) could unilaterally decide to redefine the terms of its participation to the EU, this would undermine the equal position of all the member state vis-à-vis EU law. Some states, in fact, would be more equal than others. By examining the struggle for supremacy from a multilateral prism, rather than a bilateral one, the article has shed light on the fact that only the supremacy of EU law can prevent a Union à la carte in which every member state (or the highest court thereof) can pick and choose those aspects of EU law it likes or not. Since the member states are endowed with instruments to make sure that the EU institutions comply with the powers conferred on them, and respect national identity, no convincing argument can be advanced to restrict the supremacy of EU law, and empower a state court to unilaterally nullify a valid act of EU law. In light of that, the EU institutions, but also the German federal government, must be ready to rein into the BVerfG if it follows on its pledges. As much as the prospect of a nullification of the ECB OMT program by the BVerfG sheds dark clouds on the future of the EU, the case may serve as the opportunity to clarify once and for all that, in our Union of states, no state court is above the common law. Defending the principle of the supremacy of EU law as the guarantee of the equality of the member states is ultimately in the interest of every member state — including Germany.

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Special Section The CJEU’s OMT Decision Direct Cooperation Has Begun: Some Remarks on the Judgment of the ECJ on the OMT Decision of the ECB in Response to the German Federal Constitutional Court’s First Request for a Preliminary Ruling By Sven Simon *

Abstract By its first request for a preliminary ruling, the German Constitutional Court aired its doubts about the lawfulness of the Outright Monetary Transactions (OMTs) program. In this article it is argued that the ECB’s pledge in the summer of 2012 to do "whatever it takes" to safeguard the monetary policy transmission mechanism in all countries of the euro area by buying government bonds was generally compatible with EU law. However, it is argued that there is some potential for the ECB to infringe the Treaty on the Functioning of the European Union (TFEU) while acting according to this announcement. The peculiarity of the situation, the author argues, is that we might be dealing with a "self-fulfilling prophecy" in that the ECB announces a particular policy, which might not be compatible with EU law, but the act announced, will never take place because the political problem would have been resolved by the measure previously announced. The critical question in this scenario refers to how a court should react to such a situation. The author argues that a court in such a situation has to show the legal limits of the particular institution, but neither the ECJ nor the German Constitutional Court may replace the central banks’ task to maintain financial stability. Finally, a comment is given on how the German Constitutional Court will react to the ECJ's decision in that case.

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A. Introduction After three years of intense debate and skepticism, the European Court of Justice (ECJ) 1 has decided that the announcement by the European Central Bank (ECB), which did more to end the euro crisis than any other, was legal. The German Federal Constitutional Court was right to ask for a preliminary ruling. However, the Outright 2 Monetary Transactions (OMTs) program announced by the ECB in September 2012, 3 after Mario Draghi’s “whatever it takes” speech, is compatible with EU law. More specifically, the ECJ found that the program for the purchase of government bonds on secondary markets does not exceed the powers of the ECB in relation to monetary policy and does not contravene the prohibition of monetary financing of Member States. This essay will look at the particular style of the judgment and comment on the admissibility of the preliminary ruling (B.). It will assess the question whether the Court was right to find that the ECB not exceeded its mandate (C.), analyze the OMT program on the compatibility with the prohibition laid down in Article 123 (1) of the Treaty on the Functioning of the European Union (TFEU) (D.), draw attention to a topic not directly touched by the Court, namely the aspects of Article 125 (1) TFEU and the principle of democracy (E.), and finally venture a prediction on how the German Constitutional Court will handle the case after the ECJ has responded to its questions (F.). *

Dr. iur., Assistant Professor (Akademischer Rat) at the Justus Liebig University Giessen, Germany. The author is grateful for feedback on an earlier draft from: Ayşe Martina Böhringer, Professor Erik Ibele (Madison, USA), Prosper Simbarashe Maguchu, Daniel Mengeler, Joscha Müller, Marie Christin Stenzel, and Judith Thorn. The article is attributable to the writer alone. Comments are welcome at [email protected]. 1

Mario Draghi, President of the ECB, & Vítor Constâncio, Vice-President of the ECB, Introductory statement to the press conference (Aug. 2, 2012), http://www.ecb.europa.eu/press/pressconf/2012/html/is120802.en.html (“The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective. Furthermore, the Governing Council may consider undertaking further nonstandard monetary policy measures according to what is required to repair monetary policy transmission.”). 2

See ECB Monthly Bulletin (Oct. 2012) 7–9, http://www.ecb.europa.eu/pub/pdf/mobu/mb201210en.pdf. Under the OMT program, the ECB and the national central banks will conduct outright transactions in secondary sovereign bond markets with the aim of safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy. No ex ante quantitative limits are set on the size of OMTs, but only bonds with a maturity of one to three years may be purchased. Both the amount of holdings and their market values will be disclosed. Moreover, interventions by the ECB on the secondary market will be carried out only for countries that have requested European Financial Stabilization Mechanism (EFSF)/European Stability Mechanism (ESM) support and provided that the request is approved by the Eurogroup. Conditionality will be defined in the context of an EFSF/ESM macroeconomic adjustment program. The ECB would purchase bonds on the secondary market if and until the country complies with the conditions attached to the EFSF/ESM support. However, the ECB Governing Council will maintain full discretion on the start, continuation and suspension of the OMT transactions and it will adopt its decisions in accordance with its monetary policy mandate. 3

Mario Draghi, President of European Central Bank, Global Investment Conference (July 26, 2012), available at http://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html.

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B. Particular Style of the Judgment and Admissibility In a preliminary observation of the Court a sentence is found which seems important for the reasoning of the judgment. The Court states: “‘It should be observed that, 4 according to settled case-law of the Court of Justice, Article 267 TFEU establishes a procedure for direct cooperation between the Court and the courts of the Member 5 States.’” It is this particular style of direct cooperation, by which not only the preliminary observation, but the whole judgment is carried. In this case the much bespoken “spirit of cooperation” is not only symbolic but is instead taken seriously. This is particularly true for the question of admissibility of the preliminary ruling for which the German Constitutional Court was heavily criticized. The Irish, Greek, Spanish, French, Italian, Netherlands, Portuguese and Finnish Governments, the European Parliament, the European Commission and the ECB had challenged, on various grounds, the admissibility of the request for a preliminary ruling or of certain 6 questions included. It was argued that the dispute in the main proceedings was 7 contrived and artificial. The actions before the referring court were, in its submission, devoid of purpose, moreover, they should have been declared inadmissible since they concerned EU measures that were not legal acts. The Italian Government even argued that the questions were abstract and hypothetical inasmuch as they were based on a 8 series of assumptions. The European Court of Justice, however, with very clear words, rejects any criticism of the German Constitutional Court’s decision to bring the case to Luxembourg, wipes aside any concerns about the admissibility and emphasizes that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the 4

See Case C-364/92, SAT Fluggesellschaft mbH v. Eurocontrol, 1994 E.C.R. I-43, para. 9; Case C-402/98, ATB and Others v. Ministero per le Politiche Agricole, Azienda di Stato per gli interventi nel mercato agricolo (AIMA) and Maria Pittaro, 2000 E.C.R. I-5501, para. 29. 5

Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag, para. 15 (June 16, 2015).

6

Id. at para. 18.

7

Id. at para. 19.

8

Id. at para. 20.

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questions submitted concern the interpretation or the validity of a rule of EU law, the Court is in 9 principle bound to give a ruling. These opening words form the basis for direct cooperation between the Court and a constitutional court of a Member State. It was clever and wise to de-escalate the first preliminary ruling of the German Constitutional Court with a national court friendly approach. The ECJ makes clear that it is not an omniscient institution, but rather draws a distinct line between its own competences and those of the national courts. This approach is to be most welcome. C. Transgression of the European Central Bank’s Mandate? By its first question, the German Constitutional Court aired its doubts about the validity of the OMT program, specifically requesting the Court determine whether it is a measure that is incompatible with Articles 119, 127 (1) and (2) TFEU and whether it encroaches upon the competence of the Member States. I. The Limits of the ECB’s Monetary Policy Under Articles 127 (1) TFEU and 282 (2) TFEU, the primary objective of the Union’s monetary policy is to maintain price stability. The same provisions further stipulate that, without prejudice to that objective, the European System of Central Banks (ESCB) is to support the general economic policies in the Union, with a view to contributing to the achievement of its objectives, as laid down in Article 3 of the Treaty of the 10 European Union (TEU). Articles 119 and 127 et seqq. TFEU and Article 17 et seqq. ESCB Statute include in principle a mandate that is limited to monetary policy for the ESCB in general and the European Central Bank in particular. In addition, the ESCB is allowed to support the general economic policies in the Union. While the maintenance of price stability is generally accepted as a core task of the ECB, there are widely divergent opinions on the question of whether and to what extent the central bank may at the same time pursue further objectives, such as achieving balanced economic growth, a high employment rate and stability on the 11 financial markets.

9

Id. at para. 24; with regard to an earlier judgment in the ECJ, see Case C-399/11, Melloni v. Minesterio Fiscal, para. 28 and the case-law cited (Feb. 26, 2013), http://curia.europa.eu/. 10

Id. at para. 43.

11

See ALEXANDER THIELE, DAS MANDAT DER EZB UND DIE KRISE DES EURO 26 et seq. (2013).

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12

EU law differentiates in Article 119 (2) TFEU between economic and monetary policy. 13 Yet, the Treaties do not define the term “monetary policy.” The economic debate provides a number of indications of how the concept of price stability is to be 14 interpreted, and what measures can be regarded as economic policy. Nevertheless, it does neither seem to be possible to entirely separate monetary policy on the one hand, and fiscal and economic policy on the other, nor does it — for legal reasons — seem to be necessary to define a sharp distinction. Both fields are linked in various and complex ways and therefore practically every monetary action taken by the ECB will have economic effects and consequences for the economic policy of the Member 15 States. Furthermore, according to Article 127 (1) sentence 2 TFEU, the ECB has the right to support general economic policies within the European Union and not only those of the European Union. Thus, economic policy is not generally prohibited for the ECB.

It is true that the responsibility for economic policy lies with the Member States. They are responsible, in particular, for defining the objectives and choosing t he instruments 16 of economic policy. The role of the Union is generally restricted to the adoption of 17 coordinating measures. But, the ESCB is authorized to support the general economic policies in the Union to the degree that this is possible without compr omising the 18 objective of price stability. Against this background, the German Constitutional Court was right in its opinion that the authority to support the general economic policies of 19 the Member States at Union level does not justify “any steering of economic policies” 20 by the ESCB. But as long as there are justifiable monetary reasons for a certain

12

See Armin Hatje, Art. 119 AEUV, in EU-KOMMENTAR margin no. 4 et seq. and margin no. 14 et seq. (Jürgen Schwarze et al. eds., 3d. ed. 2012). 13

Cf. Case C-370/12, Pringle v. Government of Ireland, Ireland and the Attorney General, para. 53 (Nov. 27, 2012), http://curia.europa.eu/; see Heiko Sauer, Doubtful it stood…, in this issue, at A.I.1.1.1. 14

See THIELE, supra note 11, at 27 et seq.

15

Alexander Thiele, Friendly or Unfriendly Act? The “Historic” Referral of the Constitutional Court to the ECJ Regarding the ECB’s OMT Program, 15 GERMAN L.J. 241, 259 (2014). 16

Consolidated Version of the Treaty on the Functioning of the European Union art. 5 (1), 120 et seq., May 9, 2008, 2008 O.J. (C 115) 47 [hereinafter TFEU]. 17

Id. at arts. 2(3), 5(1); cf. Pringle, Case C-370/12 at para. 64.

18

TFEU arts. 119(2), 127(1) sent. 1, & 282(3) sent. 3.

19

TFEU art. 127(1) sent. 2.

20

See Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, Case No. 2 BvR 2728/13, para. 68,

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measure taken by the ECB, it generally falls within its mandate even though the 21 Member States may have taken similar measures. II. Discretion of the ECB In the view of the Federal Constitutional Court, the purchase of government bonds on the basis of the OMT decision exceeds the support of the general economic policies in the European Union that the ESCB is allowed to pursue. The objectives outlined in Article 3 (3) TEU to which — in accordance with Article 127 (1) sentence 2 TFEU — the ECB is expected to contribute, include not only price stability but also among other things, the objectives of balanced economic growth and a highly competitive market economy aiming at full employment and social progress. This indicates the legal difficulty of creating a sharp division between the two activities. As far as this is possible without affecting the primary objective of price stability the ESCB may support general economic policies in the Union in order to 22 contribute to achieving the objectives stated in Article 3 TFEU. The objectives to be pursued by the ESCB can in this respect imply a conflict of interests. The main priority is maintaining price stability, but general economic policies may also be supported. The tension between potentially conflicting objectives provides the ESCB with scope for interpretation. The ECB has a certain amount of discretion in the solution of such areas of tension and conflicting objectives. In the field of monetary policy it even has considerable discretion when it comes to making its own assessments. If, for example, the ECB determines that the government bonds of euro-crisis countries, which are no longer marketable without central bank intervention, are suitable as collateral for central bank loans, this latitude of discretion in principle has to be accepted by the courts. The various interdependencies between fiscal and monetary policy also provide an argument for the fact th at the treaties cannot be interpreted as isolating monetary policy from other objectives of economic policy.

https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2014/01/rs20140114_2bvr272813e n.html [hereinafter OMT Decision]. 21

22

See generally TFEU.

TFEU art. 127(2) sent. 1; see Michael Potacs, Art. 127 AEUV, in EU-KOMMENTAR margin no. 6 (Jürgen Schwarze et al. eds., 3d ed. 2012).

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In any case, a court will only be able to assume a violation of Article 127 (1) TFEU if the 23 24 ECB has “manifestly and gravely” disregarded the limits on its discretion. The ECB’s latitude for discretion also refers in particular to the methods by which it seeks to pursue the objective of price stability. If, for example, it forms provisions for risks from one part of its revenues, it must be in a position to make its own decision on whether 25 these cover the potential losses. A court can hardly replace this specific expertise. The ECB must accordingly be afforded a broad discretion in framing and implementing the Union’s monetary policy. The Courts, when reviewing the ECB’s activity, must therefore avoid the risk of supplanting the central bank, by venturing into a highly technical terrain in which it is necessary to have an expertise and experience which, according to the Treaties, devolves solely upon the ECB. 26

The EU’s institutions and bodies must be provided with further leeway, especially 27 when it comes to economic policy decisions. The Court rightly points out that as regards judicial review of compliance with those conditions, since the ESCB is required, when it prepares and implements an open market operations programme of the kind announced in the press release, to make choices of a technical nature and to undertake forecasts and complex assessments, it must be allowed, in that context, a 28 broad discretion. In the context of activities relating to economic policy the ECJ speaks of “a legislative context characterized by the exercise of a wide discretion, which is essential for 23

See Joined Cases C-46/93 & C-48/93, Brasserie du Pêcheur SA and Factortame Ltd and others, 1996 E.C.R. I1029, para. 55. 24

See THIELE, supra note 11, at 31.

25

Jürgen Bast, Don’t Act Beyond Your Powers: The Perils and Pitfalls of the German Constitutional Court’s Ultra Vires Review, 15 GERMAN L.J. 167, 177 (2014); Heiko Sauer, Doubtful it stood…, in this issue, at A.I.2.1.2. 26

In order to get an idea of how the ECB interprets the independence rule, see Eur. Cent. Bank Opinion of 1 July 210 on the remuneration of the staff of Banca Nationala a Romaniei (CON/2010/51); Eur. Cent. Bank Opinion of 25 March 2010 on independence, confidentiality and the prohibition of monetary financing (CON/2010/25); Eur. Cent. Bank Opinion of 14 July 2009 on the taxation of Banca d’Italia’s gold reserves (COM/2009/59); Eur. Cent. Bank Opinion of 18 May 2009 on measures on public sector remuneration with regard to central bank independence (COM/2009/47). 27

See Joined Cases 83 & 94/76, u.a., Bayerische HNL Vermehrungsbetriebe and Others v. Council and Commission of the European Communities, 1978 E.C.R. I-1209, para. 6 et seq. 28

Gauweiler, Case C-62/14 at para 68.

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29

implementing a Community policy” . Accordingly, activities in these areas can only be regarded as contrary to EU law if the institution concerned has manifestly and gravely 30 disregarded the limits on the exercise of its powers. These considerations can also be transferred to monetary policy since the central banks also take decisions which are based on economic estimations and projections for which a certain amount of 31 discretion is essential. If a court rules that a mandate has been exceeded on the basis of an inadmissible economic policy, this ruling will as a minimum have to be based on substantial evidence. In the process the court must not put itself in the position of the central bank. Courts can include the monetary policy considerations of the ECB in their own considerations and evaluate them in relation to the normative background, but 32 they cannot, however, replace the bank’s expertise. According to the ECB, the special situation severely undermined the ESCB’s monetary policy transmission mechanism in that it gave rise to fragmentation as regards bank refinancing conditions and credit costs, which greatly limited the effects of the impulses transmitted by the ESCB to the economy in a significant part of the euro area . Having regard to the information placed before the Court in the present p roceedings, the Court is right in its assertion that “it does not appear that that analysis of the economic situation of the euro area as at the date of the announcement of the 33 programme in question is vitiated by a manifest error of assessment” . At this point it should not be overlooked, moreover, that the mere announcement of the program itself was sufficient to achieve the effect sought — namely to restore the monetary policy transmission mechanism and the singleness of monetary policy. In that regard, the ECJ is also right in its assertion that the fact that reasoned analysis has been subject to challenge does not, in itself, suffice to call that conclusion into question. As questions of monetary policy are usually of a controversial nature and in view of the ESCB’s broad discretion, “nothing more can be required of the ESCB apart from that it use its economic expertise and the necessary technical means at its 34 disposal to carry out that analysis with all care and accuracy.” 29

See Joined Cases C-120/06 P & C–121/06 P, FIAMM and others v. Council of the European Union and Commission of the European Communities, 2008 E.C.R. I-6531, para. 174. 30

Case 265/87, Schräder v. Hauptzollamt Gronau, 1989 E.C.R. 2237, para. 22; Case C-331/88, The Queen v. Minister of Agriculture, Fisheries and Food and Secretary of State of Health, ex parte Fedesa and Others, 1990 E.C.R. I-4023, para. 14; see Brasserie du Pêcheur and Factortame Ltd., Joined Cases C-46/93 & C-48/93 at para. 45. 31

See Bast, supra note 25, at 176.

32

See id. at 176 et seq.

33

Gauweiler, Case C-62/14 at para. 74.

34

Id. at para. 75.

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D. Compatibility with Article 123 (1) TFEU The recognition of such room for discretion, however, creates the risk that the 35 prohibition of monetary financing of the Member States and the purchase of government bonds by the ECB could be circumvented. Therefore, the German Constitutional Court has rightly raised the issue of the compatibility of the program with Article 123 (1) TFEU. It is clear from its wording that Article 123 (1) TFEU prohibits the ECB and the central banks of the Member States from granting overdraft facilities or any other type of credit facility to public authorities and bodies of the Union and of Member States and from purchasing directly from them their debt instruments. The TFEU thus not only stipulates what goal the ECB has to follow, it also specifies just as clearly what the ECB is not allowed to do. According to Article 123 TFEU, overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States in favor of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments. In consideration of that prohibition the Federal Constitutional Court asked whether the OMT program, in authorizing the pur chase on the secondary market by the ECB of bonds of States that are members of the euro area, infringes the prohibition laid down in Article 123 (1) TFEU. According to the Federal Constitutional Court, although the OMT program formally complies with the condition expressly set out in Article 123 (1) TFEU, which concerns solely the purchase of debt instruments in the primary market, the program none the less, in its view, may circumvent the prohibition concerned, because the ECB’s interventions on the secondary market, just like purchases on the primary market, in fact represent financial assistance by means of monetary policy. In support of that view, the Constitutional Court refers to various technical features of the OMT program: the waiver of rights, the risk of default, the retention of the bonds until maturity, the possible time of purchase and the encouragement to purchase in the primary market. According to the German Court, those are all clear indications that the 36 effect is to circumvent the prohibition laid down in Article 123 (1) TFEU.

35

TFEU art 123(1).

36

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 87 et seq..

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All the States that have participated in the proceedings, together with the Commission and the ECB, contend that the OMT program is compatible with Article 123 (1) TFEU, maintaining that purchases of government debt instruments are expressly provided for in the Treaties. They point out that Article 123 (1) TFEU prohibits only purchases of government debt instruments directly from a Member State, whilst Article 18.1 of the Protocol on the Statute of the ESCB and of the ECB expressly empowers the ECB and the central banks of the Member States to carry out operations of that kind. Article 18.1 of the Protocol on the Statute of the ESCB and the ECB indeed permits the ESCB, in order to achieve its objectives and to carry out its tasks, to operate in the financial markets, inter alia, by buying and selling outright marketable instruments, which include government bonds, and does not make that authorization subject to particular conditions as long as the nature of open market operations is not disregarded. Yet, government bonds may only be purchased if they are already on the market and are traded freely. Member States should not be able to finance themselves 37 either via their central bank or the ECB. The purpose of Article 123 TFEU in this regard is to maintain the sanctioning effect of the market. Despite the clear wording of Article 123 TFEU, both the economic impact and the legality of the purchase of government bonds are a matter of dispute, as is the announcement of the ECB that in order to save the euro it will if necessary buy government bonds to an unlimited extent (declaration of intent to purchase). I. Open-Market and Credit Operations There can be no doubt that in order to achieve the objectives of the ESCB and to carry out its obligations the ECB and national central banks may in principle operate on the financial markets. The business transactions and other instruments which are allow ed are formulated in Articles 17 et seqq. of the ECB’s Statute. In this context the greatest importance is attached to so-called open market and credit operations, which are 38 regulated by Article 18.1 of the ESCB’s Statute. In order to achieve the objectives of the ESCB and to carry out its tasks, the ECB and the national central banks may operate in the financial markets by buying and selling outright (spot and forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in Community or in non-Community currencies, as well as precious metals; they may also conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. Article 18.1 of the ESCB’s Statute gives the ECB and the national central banks the right to conclude credit operations with banks and other market participants, provided that 37

Ulrich Häde, Art. 123 AEUV, in EUV/AEUV para. 1 (Christian Calliess & Matthias Ruffert eds., 4th ed. 2011).

38

Mattias Wendel, Kompetenzrechtliche Grenzgänge: Karlsruhes Ultra-vires-Vorlage an den EuGH, 74 ZEITSCHRIFT

FÜR AUSLÄNDISCHES ÖFFENTLICHES RECHT UND VÖLKERRECHT (ZAÖRV) 615, 655 (2014).

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loans are covered by adequate collateral (principle of sufficient security). According to Article 18.2 of the ESCB’s Statute the ECB shall establish general principles for open market and credit operations carried out by itself or the national central banks, including for the announcement of conditions under which they stand ready to enter into such transactions. In principle this also includes government bonds of Eurozone countries on the secondary market. The ECB’s Statutes do not include any special rules 39 for government bonds. The purchase of government bonds is therefore in principle admissible. However, if a Eurozone Member State is no longer able to obtain refinancing and sustainable conditions on the capital markets, and the ECB provides support by softening its creditworthiness criteria for collateral or the declaration of intent to purchase, this might represent a violation of the principle of adequate collateral for central bank loans. As part of its crisis management operations the ECB “as an exceptional measure … temporarily suspended the Euro system’s minimum requirements for credit quality thresholds applicable to marketable debt instruments issued or fully guaranteed by the Hellenic Republic, declaring them eligible for the 40 duration of the collateral enhancement”. This differentiates the ECB’s bond purchases from the approach adopted by other central banks. For example the Federal Reserve, the Bank of England and the Bank of 41 Japan purchase bonds that have a high credit rating. In contrast, with the OMT program the ECB intends to use government bond purchases in order to bring down the high risk premiums of individual Member States which have low credit ratings. This approach of the ECB has certainly strengthened the view of the German Constitutional Court that the OMT program infringes Article 123 (1) TFEU because it circumvents the prohibition laid down therein; and at least the question is more than justified. II. Circumvention of Article 123 TFEU? Article 123 TFEU and Article 21.1 of the ESCB’s Statute specifically prohibit the direct 42 purchase of government bonds. In order to eliminate budget financing by the central banks, no government bonds may be purchased directly from the issuer on the primary 39

THIELE, supra note 11, at 60.

40

Eur. Cent. Bank, Decision of the European Central Bank of 18 July 2012 (ECB/2012/14), para. 4, https://www.ecb.europa.eu/ecb/legal/pdf/en_ecb_2012_14_f_sign.pdf. 41

See Deutsche Bundesbank (German Federal Bank), Statement to the Federal Constitutional Court 11 (Dec. 21, 2012). 42

See Christopher Mensching, Das Verbot der monetären Haushaltsfinanzierung, in ART. 123 ABS. 1 AEUV, EUROPARECHT (EuR), 333, 334 (2014).

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market. Numerous commentators therefore regard the indirect purchase on the secondary market as a permissible part of the so-called open-market operations of the 43 ECB. Such a purchase of bonds issued by Eurozone countries would not infringe Article 123 TFEU, which only prohibits the purchase of such bonds directly from the 44 issuing party. Restricting the prohibition to direct purchase enables the central banks to pursue an 45 open-market policy without major restrictions. The word “direct” was deliberately included in Article 123 TFEU, and it is argued that it cannot be retroactively removed 46 from the treaty by interpreting the wording differently. It is argued that it would make no sense if it were not possible to purchase bonds indirectly, namely on the 47 secondary market. Christoph Herrmann is of the opinion that any circumvention of the prohibition does not need to be regarded as a risk, for the simple reason that the program of the ECB was not designed to acquire from participants on the financial market bonds to be emitted by Member States in future, too. He states that the “normal objective” of such so-called open market operations was the fine-tuning of interest rates and market liquidity in terms of monetary policy, and these had traditionally played a prominent role in the monetary policy pursued by central 48 banks. Nevertheless, the ESCB does not have authority to purchase government bonds on secondary markets under conditions which would, in practice, mean that its action has an effect equivalent to that of a direct purchase of government bonds from the public authorities and bodies of the Member States, thereby undermining the effectiveness of the prohibition in Article 123 (1) TFEU. For that reason Martin Seidel rightly points out that for the purpose of implementing their activities regardless of their objectives in accordance with Article 18 of the ESCB’s Statute, the ECB and the ESCB are only allowed to purchase marketable securities. This consequently prohibits providing credit for non-marketable government bonds, which is tantamount to the expressly 43

Häde, supra note 37, at para. 10; Rudolf Bandilla, Art. 123 AEUV, in DAS RECHT DER EUROPÄISCHEN UNION para. 6 (Eberhard Grabitz, Meinhard Hilf, Martin Nettesheim eds., 2011); Christoph Herrmann, EZB-Programm für die Kapitalmärkte verstößt nicht gegen die Verträge – Erwiderung auf Martin Seidel, 26 EUROPÄISCHE ZEITSCHRIFT FÜR WIRTSCHAFTSRECHT (EUZW), 645, 646 (2010); THIELE, supra note 11, at 66 et seq.. 44

See Herrmann, supra note 43, at 646.

45

See Häde, supra note 37, at para. 10.

46

Ralph Alexander Lorz, Euro-Krise und Rettungsschirm: Weicht das Recht der Politik?, in LEGAL TRIBUNE ONLINE (May 14, 2010), available at http://www.lto.de/persistent/a_id/525/. 47

Franz C. Mayer, Rebels without a cause?
Zur OMT-Vorlage des Bundesverfassungsgerichts, EUR 473, 487 (2014).

48

See Herrmann, supra note 43, at 646.

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49

prohibited monetary financing of government budgets. The economic effect of direct and indirect acquisition was equivalent, since both resulted in an increase in the 50 existing money supply. As evidenced by the motives of the contracting parties, the intention behind Article 123 TFEU was to prevent the financing of national budgets — 51 directly or indirectly — by the ECB and the ESCB. This view is, however, difficult to reconcile with the wording of Article 123 (1) TFEU. It is true that the States of the euro area transferred their monetary policy competences to a common institution whilst at the same time retaining their competences in economic matters, and that it was — due to this reason — essential to ensure strict 52 financial discipline in the States of the euro area. However, Article 123 (1) TFEU includes a final clause, which prohibits only “the purchase directly from [the Member States] by the European Central Bank or national central banks of debt instruments”. If the contracting parties wished to have Article 123 (1) TFEU understood in a different way, they would not have included the word “direct.” Moreover, it is precisely the responsibility of a central bank to exert influence on the money supply by influencing 53 54 the overnight rate. In the opinion of the ECB the only criterion for the marketability of a security is that it is approved for trading on a regulated market within the 55 meaning of Directive 2004/39/EC . This is the case with all government bonds issued 56 by euro Member States. Moreover, the conduct of monetary policy will always have an effect on interest rates and bank refinancing conditions, which necessarily has consequences for the financing conditions of the public deficit of the Member States.

49

Martin Seidel, Der Ankauf nicht markt- und börsengängiger Staatsanleihen, namentlich Griechenlands, durch die Europäische Zentralbank und durch nationale Zentralbanken—rechtlich nur fragwürdig oder Rechtsverstoß?, EUZW (2010) 521; Walter Frenz & Christian Ehlenz, Schuldenkrise und Grenzen der europäischen Wirtschaftspolitik, EUROPÄISCHES WIRTSCHAFTS - UND STEURRECHT (EWS) 211, 212 (2010). 50

Markus C. Kerber & Stefan Städter, Die EZB in der Krise: Unabhängigkeit und Rechtsbindung als Spannungsverhältnis, EuZW 536, 537 (2011). 51

Id.

52

See Helmut Siekmann, “Law and Economics of Monetary Union,” in RESEARCH HANDBOOK OF THE ECONOMICS OF EUROPEAN UNION LAW 370 et seq. (Thomas Eger & Hans-Bernd Schäfer eds., 2012). 53

THIELE, supra note 11, at 60, 66.

54

See generally Eur. Cent. Bank, Guideline of the European Central Bank on the monetary policy instruments and procedure of the Eurosystem, O.J. 2011 L 331/1, § 6.2.1.5. 55

Directive 2004/39/EC, of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC, 2004 O.J. (L 14), lastly changed by Art. 94(1) EC Directive 2014/65, of 15 May 2014, 2014 O.J. (L 173) 349. 56

THIELE, supra note 11, at 60, 61.

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Indeed assuring purchasers on the primary market by the announcement of the OMT program that in an emergency they can pass on to the ECB the government bonds of certain crisis states acquired by them on the primary market, is tantamount to a circumvention of the prohibition on the direct purchase of government bonds. However, the ECB has not provided an unlimited purchase guarantee at the issue price. Market participants can therefore not be sure about the market conditions on which the ECB will make such purchases. Even if the statement by Mario Draghi that 57 “the ECB is ready to do whatever it takes to preserve the euro” suggests something else, the market risk incurred by market participants is merely reduced by the OMT program and not entirely eliminated. The factual limitation on the ESCB’s intervention means that the Member States cannot, in determining their budgetary policy, rely on the certainty that the ESCB will at a future point purchase their government bonds on 58 secondary markets. The OMT program therefore does not automatically breach the prohibition on the provision of credit stipulated by Article 123 TFEU. If the ECB uses the OMT program for the targeted purchase of government bonds of Eurozone crisis countries on the secondary market, namely because of the obvious difficulty of placing such securities on the primary market, this may lead to a circumvention of the prohibition on the direct purchase of government bonds. But, it is not necessarily the case that the prohibition will be circumvented by every indirect purchase. On the contrary, it is extremely difficult to determine when the economic effect of direct and indirect acquisition are equivalent. The implementation of a program such as the OMT 59 program must be subject to conditions intended to ensure that the ESCB’s intervention on secondary markets does not have an effect equivalent to that of a direct purchase of government bonds on the primary market. Yet, in the occasional purchase of government bonds on the secondary market the ECB must be afforded a 60 61 margin of discretion which is not or at most only partially verifiable by a court — 62 regardless of Article 35 of the ECB’s statutes.

57

Speech by Mario Draghi, President of the European Central Bank, Global Investment Conference in London, (July 26, 2012), available at http://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html. 58

See Gauweiler, Case C-62/14 at para. 113.

59

Id. at paras. 103–09.

60

See Potacs, supra, note 22, at para. 6.

61

See Christoph Herrmann, Die Bewältigung der Euro-Staatsschulden-Krise an den Grenzen des deutschen und europäischen Währungsverfassungsrechts, EuZW 805, 810 (2012). 62

See also Daniel Thym, Anmerkung zu EuGH, Rs. C-370/12 (Pringle), JURISTENZEITUNG (JZ) 259, 263 (2013).

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E. Incompatible with Article 125 TFEU or even a breach of the principle of democracy? There is one other important concern which was not touched by the ECJ, but lies behind the remark of the German Constitutional Court that the OMT decision could violate the constitutional identity of the Basic Law if it created a mechanism which would amount to an assumption of liability for decisions of third parties which entail consequences that are difficult to calculate so that, due to this mechanism, the German Bundestag would not remain the ‘master of its decisions’ and could no longer 63 exercise its budgetary autonomy under its own responsibility. In that concern the unlimited purchase of government bonds by the ECB could eventually give rise to a situation which leads to a violation of Article 125 (1) TFEU or even a breach of the principle of democracy. Article 125 TFEU stipulates that (for 64 democratic reasons) neither the EU nor the Member States are liable for the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or the public enterprises of Member States, and do not provide support for such liabilities. As soon as the ESCB begins to redistribute liability risks among the taxpayers of different Member States of the Eurozone, this could be regarded as the “pooling of liability via the central bank’s balance sheet”. The accusation of a pooling of liability is a serious one not only in the context of Article 125 TFEU, but in particular due to its potential infringement of the principle of democracy. Within the context of the principle of democracy this is initially problematic, because the ECB has been given the privilege of autonomy, which in a democracy is not typical. A central bank typically represents the same kind of 65 “democratic anomaly” as a constitutional court. Both are “counter-majoritarian 66 67 institutions” , whose democratic deficits can only be justified by their function. Thus, the independence of the ECB can only be justified in terms of the principle of democracy (Article 10 TEU) if it operates in the field of monetary policy.

63

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 102.

64

Cf. Wolfang Kahl, Bewältigung der Staatsschuldenkrise unter Kontrolle des Bundesverfassungsgerichts – ein Lehrstück zur 
horizontalen und vertikalen Gewaltenteilung, DEUTSCHES VERWALTUNGSBLATT (DVBl) 197 (2013). 65

Franz C. Mayer, supra note 47, at 509.

66

Franz C. Mayer, Rebels Without a Cause? A Critical Analysis of the German Constitutional Court’s OMT Reference, 15 GERMAN L.J. 111, 114 (2014). 67

See Mayer, supra note 47, at 509.

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This is not unknown at the national level, consider the explicit independence of the Bundesbank in Article 88 of the German Basic Law Grundgesetz. At the European level, however, there is a further problem which is inherent in the concept of joint liability which the ECB represents. The ECB is the central bank of a monetary union, which consists of various sovereign States. This distinguishes it from other central banks. When the Fed purchases US bonds, this does not lead to redistributional effects among the individual states of the US. In contrast, the ECB does not purchase Eurobonds. It purchases only government bonds of individual States who are having financial difficulties. It is possible that the risks of these especially risky government bonds are shifted from the creditors of one State to the taxpayers of other States. In this manner, the taxpayers of the “solidly-financed States” can indirectly be burdened by the outcomes of other States’ policies. Looking at the principle of democracy this is problematic because they are not responsible for these policies, and they cannot even influence these policies with their vote. It is not to be excluded that the governments of some States make debt-financed expenditures and distribute largesse to their voters, while the taxpayers of other States have to pay for this. Thus, the actions of the ECB may cause a redistribution of liability among the taxpayers of the Member States. Liabilities that are mutually decided on or redistributed among the taxpayers of individual countries must not be the decision of a central bank, since it does not have the democratic legitimacy for this. As soon as the ECB begins to redistribute liability risks among taxpayers with the result that taxpayers in one country are burdened by the policies of another country, the qu estion of democratic legitimacy becomes a pressing one. The German Constitutional Court has expressly held that the democratic legitimacy, which emanates from the voters in the Member States, is restricted by the transfer of monetary policy powers to an independent European Central Bank, and that this 68 affects the principle of democracy. It follows from the democratic basis of budget autonomy that the Bundestag may not consent to an intergovernmentally or supranationally agreed automatic guarantee or performance which is not subject to strict requirements and whose effects are not limited, which – once it has been set in motion – is removed from the Bundestag’s control and influence (BVerfGE 129, 124 ).

68

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 59.

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Nevertheless, according to the German Constitutional Court this restriction is still compatible with democratic principles because it takes the tested and scientifically documented special character of monetary policy into account. This special character is shaped by the fact that an independent central bank is more likely to safeguard monetary stability, and thus the general economic basis for budgetary policies, than state bodies whose actions depend on money supply and value and which need to rely on short-term approval by political forces. Yet, “no parliament in the capitals of Europe can burden other states with debt without doing harm to the principle of 69 democracy” . Thus, the exception from the principle of democracy is not absolute. I. Article 125 (1) TFEU Peter Sester affirms the danger of a breach of Article 125 TFEU by stating that without restructuring (“a haircut”) there is not only a theoretical possibility but a real possibility that the issuers of the purchased securities will not be able to make the 70 interest payments. If the ECB generates a loss, in accordance with Article 33 (1) of the ESCB’s Statute this could be financed from the general reserve fund of the ECB. If this were not sufficient the foreign exchange reserves would have to be resorted to, and should these not be enough the Member States of the monetary union would have to recapitalize the ECB. Thus, the liabilities of taxpayers in one country would be redistributed to the other Member States of the Eurozone, without any democratic legitimacy arising from the joint liability association. Christoph Herrmann contradicts this recapitalization thesis, and points to the broad discretion enjoyed by the ECB. He argues that the national central banks were not automatically liable for losses by the ECB which exceed the reserve fund and monetary 71 revenues (Article 33 ECB statutes). These losses could only be indirectly passed on to the national central banks by an increase in the ECB’s capital, which was not a legal requirement and in accordance with Article 28.1, 10.3 of its statutes required a qualified majority vote by the bank’s council (on which the president of the Bundesbank has no blocking minority). In accordance with Article 41 of the ECB’s Statute this is subject to prior authorization by the Council. According to the ECB, there was no liability risk for the national budgets because the ESCB has ensured 69

Udo Di Fabio, Karlsruhe Makes a Referral, 15 GERMAN L.J. 107, 109 (2014).

70

Peter Sester, The ECB’s Controversial Securities Market Programme (SMP) and its role in relation to the modified EFSF and the future ESM, 9 EUR. CO. & FIN. L.R. 156 et seq. (July 2014); Matthias Ruffert, Europarecht: Vorlagebeschluss des BVerfG zum OMT-Programm, JURISTISCHE SCHULUNG (JUS) 373, 374 (2014). 71

See Herrmann, supra note 61, at 811.

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sufficient risk prevention, mostly through provisions and reserves. If losses occur nevertheless, they can be carried forward and balanced with revenues in the foll owing 72 years. Even if in German law the federal government is under no legal obligation to directly offset the losses of the Bundesbank, loss compensation could be required if a large loss carried forward could not be compensated for within a reasonable period of 73 time. Assumption of such a loss by the federal government could — in the opinion of Jens Weidmann — be required if the amount of the incurred losses threatened the financial independence of the Bundesbank and thus the credibility of the euro 74 system. This “risk”, however, one might argue, was consciously entered into when the monetary union was established. Even at the time the monetary union was created one was well aware that such a project would involve risks. In particular, the risk of non-compliance with the stability criteria was recognized in the Maastricht decision of 75 the Federal Constitutional Court. And even if the lack of privileged creditor status may mean that the ECB is exposed to the risk of a debt cut decided upon by the other creditors of the Member State concerned, it must therefore be stated in line with the Court “that such a risk is inherent in a purchase of bonds on the secondary markets, an operation which was authorized by the authors of the Treaties, without being 76 conditional upon the ECB having privileged creditor status” . When central banks intervene in that market, they always assume a degree of risk, a risk which was also assumed by the Member States when they decided to create the ECB. “As the OMT programme is designed, the ECB is admittedly exposed to a risk, but not 77 necessarily to a risk of insolvency.” As long as the ECB does not buy government bonds on a scale which could involve the risk of a recapitalization, it is operating within its margin of discretion. The mere announcement of the intention of buying government bonds does not constitute a breach of Article 125 TFEU, nor does the 72

OMT Decision, BVerfG, Case No. 2 BvR 2728/1 at para. 12.

73

Cf. Jens Weidmann, Eingangserklärung anlässlich der mündlichen Verhandlung im Hauptsacheverfahren ESM/EZB beim Bundesverfassungsgericht in Karlsruhe am 11.6.2013, available at http://www.bundesbank.de/Redaktion/DE/Kurzmeldungen/Stellungnahmen/2013_06_11_esm_ezb.html. 74

Id.

75

Bundesverfassungsgericht, [BverfG][Federal Constitutional Court], Feb. 7, 1992, 89 ENTSCHEIDUNGEN DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] 155, 204, 207. 76

77

Gauweiler, Case C-62/14 at para. 126.

Opinion of Advocate General Pedro Cruz Villalón at para. 196, Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (Jan. 14, 2015), http://curia.europa.eu/juris/document/document.jsf?text=&docid=161370&pageIndex=0&doclang=en&mode=lst &dir=&occ=first&part=1&cid=10276.

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purchase of such individual government bonds. It only comes into being in the event of the targeted, systematic purchase of government bonds aimed at the long -term funding of a state. At this moment there is at least the danger that the redistrib ution of liability risks for the taxpayers of different euro states could have an impact on which they have no democratic influence. II. A breach of the Principle of Democracy Even this method would not be entirely without democratic legitimacy. It is true that there is no full democratic legitimization for the OMT program. On the other hand, however, before it can formally come into force the national parliaments have to 78 approve its activation, since it is linked to the European Stability Mechanism (ESM). If the ECB has recourse to conditions that were negotiated as part of the ESM, it will be taking advantage of the intergovernmental legitimacy of the ESM. The OMT program can be put into effect only when the situation of certain of those States has already 79 justified ESM intervention which is still under way. The bond purchase is thus directly subject to political evaluation and control by the members of the ESM board of 80 governors. This fact was the basis for the statement made by Wolfgang Schäuble at the end of April 2014 saying that the German federal government would prevent such an ESM program and therefore ensure from the very beginning that the ECB wouldn’t get into a situation of making decisions on OMT. The reason for this is that the ECB can’t simply make decisions on OMT by itself: “It can’t take the decision in the first place, since it is bound by preconditions over which it has no control”, Schäuble is 81 reported to have said that “ESM decisions have to be unanimous, and we will not decide on such a program after this announcement by the ECB.” In fact, within the framework of the ESM Germany has a de facto right of veto when it comes to an ESM program which is a prerequisite for ECB government bond purchases in favor of a single Member State. The German representative on the ESM is bound by the

78

See Andreas Wiedemann, Overview of the Karlsruhe Hearing on OMT, Summary, 13 June 2013, available at http://www.bruegel.org/nc/blog/detail/article/1109-overview-of-the-karlsruhe-hearing-on-omt-summary/. 79

See Gauweiler, Case C-62/14 at para. 87.

80

Robert Uerpmann-Wittzack, Völkerrecht als Ausweichordnung – am Beispiel der Euro-Rettung, EUR-BEI 49, 53 (2013). 81

Kassiert Schäuble die Wunderwaffe der EZB? Die Kritik am OMT-Anleihekaufprogramm der Europäischen Zentralbank ist groß in Deutschland. Das Verfassungsgericht lehnt es ab. Hat nun ausgerechnet der Bundesfinanzminister das wirkungsvolle Instrument abgeräumt?, F.A.Z. (May 24, 2015), http://www.faz.net/aktuell/wirtschaft/eurokrise/omt-schaeuble-kassiert-die-wunderwaffe-der-ezb12955803.html.

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instructions of the Bundestag. Of course the final decision about the extent of possible OMT purchases is the sole responsibility of the ECB. Finally, the German Constitutional Court identified room for a potential compromise in suggesting that it could accept the supportive nature of the OMT policy if the total 83 volume of the program was expressly limited. In particular, in its judgment on the European Financial Stability Facility, the Constitutional Court held that the German parliament could not transfer unlimited budgetary responsibilities to the European 84 level. Against this background one of the most important sentences of the ECJ’s ruling seems to be a statement concerning the de facto restricted volume of government bonds eligible to be purchased in the framework of the program. The Court finds: Thus, by limiting that programme to certain types of bonds issued only by those Member States which are undergoing a structural adjustment programme and which have access to the bond market again, the ECB has, de facto, restricted the volume of government bonds eligible to be purchased in the framework of the programme and, accordingly, has limited the scale of the programme’s impact on the 85 financing conditions of the States of the euro area. This statement will help the German Constitutional Court to accept the ruling of the ECJ. The ECB’s solution is to announce that no ex ante quantitative limits will be established as regards the volume of purchase, although without prejudice to the fact that it has its own quantitative limits internally, the amount of which cannot be disclosed for strategic reasons which, in essence, seek to ensu re that the OMT program is effective. The existence of objective quantitative limits on the volume of purchases would tend to confirm the limited scale of the risk. As the ECB itself has acknowledged, those limits will exist; they are, however, not made pu blic for strategic reasons but they serve to reduce the Bank’s exposure.

82

See generally, Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Feb. 28,2012, Case No. 2 BvR 8/11 – 9er Sondergremium, paras. 72 et seq. 83

Gauweiler, Case C-62/14 at para. 83; Niels Petersen, Karlsruhe Not Only Barks, But Finally Bites—Some Remarks on the OMT Decision of the German Constitutional Court, 15 GERMAN L.J. 321 325 (2015). 84

Bundesverfassungsgericht [BverfG] [Federal Constitutional Court], Sep. 7, 2011, Case No. 2 BvR 1485/10, 124 ENTSCHEIDUNGENG DES BUNDESVERFASSUNGSGERICHTS [BVERFGE] paras. 129, 179–80. 85

Gauweiler, Case C-62/14 at para. 116.

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Of course, any quantitative limit published in advance would have been likely to reduce the program’s effectiveness. The OMT program cannot be presented as a channel for limited purchases, because, if it were, that would contribute to provoking a bout of speculation which would severely undermine the program’s objective. However, the program could legitimately be adopted by the ESCB without a quantitative limit since it is limited to certain types of bonds issued only by those Member States which are undergoing a structural adjustment program and which have access to the bond market again. The ECB has, therefore, de facto restricted the volume of government bonds eligible to be purchased in the framework of the program and, accordingly, has limited the scale of the program’s impact on the 86 financing conditions of the States of the euro area. In addition, by providing only for the purchase of government bonds issued by Member States that have access to the bond market again, the ESCB in practice excludes from the program it intends to implement the Member States whose financial situation has deteriorated so far that 87 they are no longer in a position to secure financing on the market. F. Conclusion The bottom line is that the mere declaration to buy government bonds violates neither Article 123 nor Article 125 TFEU. The occasional purchase of government bonds on the secondary market is not prohibited, especially as risks and regional fiscal redistribution effects among the various Eurozone countries arise from the rest of the ECB’s 88 monetary policy anyway. Such side effects of monetary policy are basically covered by the mandate of the ECB. The central question is therefore whether its mandate is exceeded by the increasing height of the risks and the fiscal distributional effects of 89 government bond purchases. This is a gradual process which is difficult to evaluate from the outside. The ECB argues that the government bond purchases are adequately controlled and the euro system has sufficient risk buffers in place in the form of provisions for losses and reserves to be able to absorb any losses. However, in the event of more extensive purchases there is in principle a risk that the euro system will be subject to greater losses which it is not able to absorb on its own. If the ECB makes targeted purchases of government bonds to a major extent and thus becomes involved in state financing, 86

Id.

87

Id. at 119.

88

See, e.g., the resulting problems under the payment system TARGET2 which cannot be explained in detail here.

89

Jürgen Matthes & Markus Demary, Überschreitet die EZB mit ihren Staatsanleihekäufen ihr Mandat?, WIRTSCHAFTSDIENST 607, 614 (2013).

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this could lead to a circumvention of Article 123 TFEU and, ultimately, to a breach of Article 125 TFEU. Thus, the ECB’s pledge in the summer of 2012 to do “whatever it takes” to safeguard the monetary policy transmission mechanism in all countries of the euro area by buying government bonds was generally compatible with EU law. Yet, there might occur a situation in which the ECB, if acting according to the announcement, might infringe either article 123 or even article 125 TFEU. The peculiarity of this situation is that we are dealing with a “self-fulfilling prophecy.” OMT has never actually been used. The ECB announces a particular policy, which might not be compatible with EU law, however, the act announced will never take place since the political problem was solved by simply announcing the measure. The question is now, how a court should react in such a situation. I would propose that a court in such a situation has to show the legal limits of the particular institution, but neither the ECJ nor the German Constitutional Court may replace the central banks’ function to maintain financial stability. Otherwise the court would rule beyond its competences. In view of all the foregoing considerations, the answer to the questions referred to the ECJ is that Articles 119 TFEU, 123 (1) TFEU and 127 (1) and (2) TFEU and Articles 17 to 24 of the Protocol on the ESCB and the ECB can be interpreted as permitting the ESCB to adopt a program for the purchase of government bonds on secondary markets, such as the program announced by the ECB. Carefully read, the Federal Constitutional Court’s referred question explicitly left open an interpretation of the OMT decision in 90 accordance with primary law. Karlsruhe (the German Federal Constitutional Court) has not made a preliminary ruling on the question of the preliminary ruling and the ECJ has now declared the OMT decision compatible with European Union law. The preliminary ruling was wisely formulated sufficiently open to follow the answer of the ECJ. With its general conditional nature, the preliminary ruling of the Constitutional Court reads in such a way as if its critical remarks are preliminary legal opinions which are not binding at the moment, but which could be developed further in the light of the preliminary ruling of the ECJ. This can be seen as an attempt to enter into a dialogue within the context of direct cooperation with the ECJ. There are numerous indications that the Federal Constitutional Court has no intention of entering into a conflict of jurisdiction with the ECJ. In the first place its ruling opens the way to avoiding such a conflict, because it still regards as possible — within what it sees as the boundaries of the German integration program — an interpretation that the OMT decision conforms to EU law. The court, however, required from the ECJ an interpretation of EU law which will not provide any conflicts with previous rulings, and

90

OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at paras 99–100.

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can be justified within the interpretation of the law in such a way that it does not appear arbitrary. The ECJ has succeeded in this task. As Article 267 TFEU provides an institutionalized mechanism for judicial dialogue between the ECJ and national constitutional courts it was right to ask for a preliminary ruling. And the decisions of the Federal Constitutional Court already hav e had its 91 effect. The ECB has already reacted when drafting the Quantitative Easing program . With regard to the sharing of hypothetical losses, the Governing Council decided that purchases of securities of European institutions — which will be 12 % of the additional asset purchases, and which will be purchased by national central banks — will be subject to loss sharing. The rest of the NCBs’ additional asset purchases will not be subject to loss sharing. The ECB will hold 8 % of the additional asset purchases. This implies that 20 % of the additional asset purchases will be subject to a regime of risk sharing. This approach seems to be directly influenced by the rulings of the German Constitutional Court. The preliminary procedure can be characterized “by mutual cooperation and shared 92 responsibility.” Considering that many national constitutional courts have long been reluctant to participate at all in this direct dialogue procedure, the shift in preliminary 93 94 reference practices during the last years is remarkable. “In the framework of the preliminary procedure, national constitutional courts and the ECJ should interact with each other on an equal footing and enter into an issues-based dialogue about the question what decisions best realize the constitutional principles of both, the 95 European and the national legal order.” In that sense the German Federal Constitutional Court was right to refer the question to the ECJ. Even more than that,

91

EUR. CENT. BANK, ECB announces expanded asset purchase https://www.ecb.europa.eu/press/pr/date/2015/html/pr150122_1.en.html.

programme

(Jan.

22,

2015),

92

Koen Lenaerts cited by Andrej Lang, How Constitutional Courts talk to each other: The Potential of the Preliminary Reference Procedure for Europe’s pluralist Verfassungsverbund, VERFASSUNGSBLOG (VERFBLOG), (Nov. 28, 2014), available at http://www.verfassungsblog.de/en/wie-verfassungsgerichte-miteinander-reden-daspotential-des-vorlageverfahrens-fuer-europas-pluralistischen-verfassungsverbund/#.Ve3H2LSPrL8. 93

Pringle, Case C-370/12; Melloni, Case C-399/11; Case C-73/08, Nicolas Bressol and Others and Céline Chaverot and Others v. Gouvernement de la Communauté française, 2010 E.C.R. I-2735; Case C-236/09, Association Belge des Consommateurs Test-Achats ASBL and Others v. Conseil des ministers, 2011 E.C.R. I-773; Joined Cases C293/12 & C-594/12, Digital Rights Ireland Ltd v. Minister for Communications, Marine and Natural Resources and Others, and Kärntner Landesregierung, Michael Seitlinger, Cristof Tschohl and Others (Apr. 8, 2014), http://curia.europa.eu/; Case C-168/13, Jeremy F. v. Premier ministre (May 30, 2013), http://curia.europa.eu/. 94

Andrej Lang, supra note 92.

95

Id.

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its first referred question will go down as “a masterpiece of truly cooperative 96 constitutional pluralism” in the history of European jurisprudence.

96

See Matthias Goldmann, Mutually Assured Discretion: The ECJ on the ECB’s OMT Policy, VERFBLOG, (June 18, 2015), available at http://www.verfassungsblog.de/mutually-assured-discretion-the-ecj-on-the-ecbs-omt-policy/.

Special Section The CJEU’s OMT Decision The Euro Is Irreversible! … Or is it?: On OMT, Austerity and the Threat of “Grexit” By Michael A. Wilkinson*

A. Introduction The promise of the ECB to act effectively as the Eurozone’s ‘lender of last resort’ was widely praised as a central plank in a broader strategy to protect the Euro and avoid financial meltdown in its Member States. “Never has so much effect been gained by doing 1 so little. Words alone, it seemed, calmed the markets . . . .” The OMT program appeared 2 as a “watershed” in the Eurozone crisis, “one of the most effective announcements any 3 central bank has ever made.” The reason for its success was straightforward: Financial investors would be encouraged to buy the bonds of distressed member states with the knowledge that they could later sell them on to the ECB. The prospect that the ECB would move into sovereign debt markets “with the full weight of its balance sheet” was an offensive that “no market participant could hold a short position against.” That is what Draghi meant when he said “the euro is 4 irreversible.” There was, however, a snag. The ECB had no authority to do it. Restricted by the rules set up by the Treaty of Maastricht, the ECB’s objective is to ensure price stability alone—to avoid inflation, and in order to promote fiscal discipline it is prohibited from monetary financing of national budgets (Article 123 TFEU). OMT was not only ultra vires as a matter * Associate Professor of Law, LSE. I would like to thank Floris de Witte and Stefan Imhof for discussion of an earlier draft. All errors are mine alone. 1

MARK BLYTH, AUSTERITY: THE HISTORY OF A DANGEROUS IDEA 247 (2013).

2

Nicolas Jakoby, The Elusive Economic Governance and the Forgotten Fiscal Union, in THE FUTURE OF THE EURO 82 (Matthias Matthijs & Mark Blyth eds., 2015). 3

See C. Gerner-Beuerle & E. Schuster, Law Meets Economics in the German Federal Constitutional Court: Outright Monetary Transactions on Trial, 15 GERMAN L.J. 281, 282 (2014). 4

Erik Jones, The Forgotten Financial Union: How You Can Have a Euro Crisis Without A Euro, in THE FUTURE OF THE EURO 63 (Matthias Matthijs & Mark Blyth eds., 2015). The subsequent lowering of Spanish, Italian, and Greece yields was directly attributed to the ECB’s program, without it ever having to be triggered in practice, and in the case of Spain and Italy, without ever entering a structural adjustment program through participation in EFSF or ESM (an apparently trivial fact that needs to be kept in mind, as it later resurfaces).

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of European law; it was also a structural transgression of competence in breach of German 5 Basic Law. This, at least, was the opinion of the German Federal Constitutional Court. After many decades of shadow-boxing, the German Court, in its first ever reference to the ECJ, made plain its objections to OMT but gave the ECJ the opportunity to do its work for it, either by declaring OMT invalid, or by interpreting it in such a way that the program 6 would conform to German constitutional standards—the famous paragraph 100. The German Court’s referral set up a dilemma for the ECJ. On the one hand, in the event of disagreeing, the ECJ would be risking constitutional conflict with the most powerful domestic court in the region and for the sake of maintaining a program, which, however economically beneficial, had evidently questionable constitutional credentials. On the other hand, in the event of agreeing with the German Court, declaring OMT beyond the powers of the ECB, or—what would amount to the same, legal only if revamped along lines 7 offered in paragraph 100 by the GFCC, that would render it ineffective —the ECJ would be jeopardizing the prospect of economic recovery in the Eurozone. In its ruling of 16 June 2015, the European Court of Justice declined Karlsruhe’s offer, giving OMT a clean bill of constitutional health, refusing to declare the program ultra vires, 8 or to interpret it in the limited way demanded by Karlsruhe. The matter now returns to the German Court. It is no surprise that, as well as substantively defending the ECB’s prerogatives, the ECJ 9 asserted its own excusive authority to determine their legality. If the Advocate General had suggested that Article 4(2) TEU was already there to balance national constitutional

5

Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Jan. 14, 2014, Case No. 2 BvR 2728/13, https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2014/01/rs20140114_2bvr272813.h tml. 6

In short, judicial guarantees of limited purchasing, no debt restructuring and avoidance of market interference.

7

See, e.g., Gerner-Beuerle & Schuster, supra note 3; and which were anyway “untestable” according to Kristen Schneider, Questions and Answers: Karlsruhe’s Request for a Preliminary Ruling to the Court of Justice of the European Union, 15 GERMAN L.J. 231 (2014). 8

9

Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (June 16, 2015), http://curia.europa.eu/.

Long perceived to have an integrationist agenda, the ECJ was unlikely either to query the authority of what is currently the region’s most powerful institution, taking the lead since the Euro crisis through its part in the “Troika,” or to allow its own authority to be blatantly usurped by the German Constitutional Court, with which it has long had a ‘complicated’ relationship.

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10

identity against the “uniformity” of EU law, the ECJ itself was silent on that point, noting 11 only that its authority on the matter would have to be “definitive.” It was a surprise that the European Court didn’t opt for a “third alternative”: A solution to placate the markets and their financial institutions, as well as the German Court and its constituency, giving the ECB room to emerge with a viable bond-buying program and the German Court room to emerge with a judicial compromise. Could it have avoided both institutional conflict with the ECB and constitutional conflict with the GFCC? Perhaps such 12 an avenue did not exist. Karlsruhe is now in an unenviable position. The point of having the nuclear option is that you don’t actually have to use it. This is the logic of Mutually Assured Destruction (MAD) and it was thought to apply to the relationship between Karlsruhe and Luxembourg as 13 much as between the global superpowers. The only thing worse than using the weapon, at least from the point of view of the party that launches it, is that it turns out to be a dud. The first ever reference from the GFCC to the ECJ may have ended years of ambiguity, beginning with the Solange jurisprudence, continuing through to the Maastricht and Lisbon decisions; but the result looks unlikely to favor Karlsruhe. If this was a bluff, then the ECJ’s OMT decision called the GFCC. The surprise was that Karlsruhe played it at all in the urgency of the Euro crisis and on such 14 a manifestly critical political and economic matter, extending far beyond legal niceties. 10

As the Advocate General noted, unilateral reservations of authority such as that demanded by Karlsruhe would soon lead to constitutional disintegration of the EU’s quasi-federal judicial structure. See Gauweiler, Case C-62/14 at para. 59. 11

See Gauweiler, Case C-62/14 at para. 14. Every first year student of EU law knows that EU law takes primacy over domestic law and that only the ECJ has the authority to determine the legality of EU acts—at least from the perspective of the ECJ. 12

Given the ambiguous nature of the measure complained of (a press release), its speculative nature (it was never actually used), and the fact that the German Court seemed to have made its mind up already, the ECJ could have avoided direct conflict by ruling the reference inadmissible (as argued by a number of states, see Gauweiler, Case C-62/14 at para. 18). But because of the possibility in German Constitutional Law of ordering preemptive action against it, as well as the significance of the subject matter, the ECJ probably felt obliged to give an answer. 13

See, e.g., NEIL MACCORMICK, QUESTIONING SOVEREIGNTY (1999). This metaphor seems to have been replaced with another, the game of “chicken,” lowering the metaphorical stakes, see Mattias Kumm, Rebel Without a Good Cause: Karlsruhe’s Misguided Attempt to Draw the CJEU into a Game of “Chicken” and What the CJEU Might Do About It, 15 GERMAN L. J. 210 (2014). 14

This was understood by at least two dissenting German Justices, the reference made against the advice of Gerhard and Lübbe-Wolff, who thought the very idea of a constitutional challenge in this case to be unwise and even unconstitutional. Others concurred: “[T]he actual surprise is the FCC’s willingness to experiment with untested components of the ultra-vires pattern just when the currency Union seems to be at stake.” See GernerBeuerle & Schuster, supra note 3, at 239. For a compelling critique of the Court’s granting of standing to individuals to pursue ultra vires in a case such as this, based indirectly on a violation of their right to vote, see

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But, if legal scholars now ask, “what reaction will the ECJ’s defiance provoke?”—that question, although of interest to “Karlsruhe watchers”, may be of secondary importance compared to the fundamental constitutional difference between the two Courts that the OMT ruling reveals. Considered in broader constitutional context, the OMT saga reveals the precariousness of two structural edifices of Economic and Monetary Union—fiscal discipline and the irreversibility of the Euro. If fiscal discipline pushes against financial rescue, because assistance disincentivizes prudent economic management, irreversibility pulls in its favor, at least as far as assistance is necessary to avoid default or exit. So far, the logic of irreversibility has prevailed, partly due to considerations of expediency, partly due to the higher duty to protect the Euro as a whole, but above all because the tension has been resolved on terms—dictated by a Euro group led by Germany, along with the Troika of institutions, ECB, Commission and IMF—that maintain the ideology of “austerity” (“strict conditionality”). OMT threatens this tense balance between assistance and austerity, because it potentially offers rescue without conditionality, doing its work without ever needing to be triggered. And it shifts control over the balance between assistance and austerity from the Member States to the EU institutions. Although in tension, the twin dogmas of fiscal discipline and irreversibility can be maintained provided it is understood that there can be no alternative—either to austerity or to membership of the Euro. The irony is that if austerity is truly irrational in purely economic terms because of its contractionary effect, as many seem to think, then the further it is pushed, the more that rescue will be necessitated as countries fall further into 15 debt, but are not permitted to sink. OMT reveals that the tension between these logics permeates to the heart of the EU’s juridical constitution. Whereas the ECJ elevates irreversibility of the Euro above fiscal discipline, giving the green light to OMT, the GFCC reverses the priority. Indeed, although it 16 has been implicitly advanced by Angela Merkel (“if the Euro fails, Europe fails”), irreversibility is not even recognized by Karlsruhe as a constitutional imperative.

Klaus Garditz, Beyond Symbolism: Towards a Constitutional Actio Popularis in EU affairs? A Commentary on the OMT Decision of the Federal Constitutional Court, 15 GERMAN L. J., 189, 196 (2014). 15

See generally Simon Wren-Lewis, “The Ideologues of the Eurozone,” MAINLY MARCO: COMMENT ON MACROECONOMIC ISSUES (July 3, 2015), http://mainlymacro.blogspot.sg/2015/07/the-ideologues-ofeurozone.html?spref=tw; see also Olivier Blanchard & Daniel Leigh, Growth Forecast Errors and Fiscal Multipliers, (Int’l Monetary Fund, Working Paper WP/13/1). 16

See, e.g., Merkel warns of Europe’s Collapse: If the Euro Fails, So Will the Idea of European Union, DER SPEIGEL, May 13, 2010.

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However, the placing of “Grexit” on the table in the recent Greek debacle fundamentally changes the nature of the game, by dispelling the illusion that the Euro is irreversible for each and every country. Even though it is too early to say precisely where this will end, it will be suggested in conclusion that this signposts a fundamental but as yet uncharted mutation in the constitution of EMU: The Euro is irreversible not in its composition, but in its ideology. In other words, in the final battle, austerity wins. The article proceeds in three parts. First, we will explore the argument that OMT violates fiscal discipline by promoting unmitigated moral hazard—the risk that the ECB’s bondbuying program will discourage sound economic management. Normally, financial assistance—whether through bilateral loans, EFSF, ESM or OMT—would be made compatible with the structure of EMU by attaching strict conditionality, mitigating any moral hazard. OMT potentially threatens this arrangement. Its acquiescence by the political establishment, however, suggests that austerity is more ideologically than practically upheld. Second, and in tension with the obligation to avoid moral hazard, there is an obligation to maintain the Euro as a currency union: The duty of irreversibility—a political, if not a legal, duty to protect the composition of the Euro area. According to the ECB, the promise of financial assistance by way of a bond-buying program was justified because markets were irrationally pricing the sovereign bonds of Member State in financial difficulty on the basis of ‘unjustified fears’ of reversibility of the Euro. But is the Euro irreversible? The election of Syriza in Greece tested this hypothesis, pushing the tension between fiscal discipline and irreversibility nearly to breaking point by openly contesting austerity and the authority of the Euro area leading powers to enforce it in a domestic setting in which it had been unequivocally rejected. The political threat of “Grexit” recently tabled by the German Finance Minister Wolfgang Schäuble has called into question the fundamental justification for OMT, transgressing a taboo by calling the Euro as “reversible,” even if only temporarily. The final part of this act of the drama ended with Greek prime Minister and Syriza leader Alexis Tsipras wearily declaring after months of negotiations that there was, after all, “no alternative.” B. Fiscal Discipline and its Undoing: Is Austerity Predominantly Ideological? The substantive concern raised by the Bundesbank and endorsed by the German Court was that the promise to purchase unlimited bonds of ailing member states, to act effectively as a “lender of last resort,” violated the basic constitution of Economic and Monetary Union (EMU) and its twin features of the separation of monetary policy and fiscal authority and 17 the avoidance of moral hazard. 17

I will not deal here with the complaint from the perspective of German constitutional identity.

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At the heart of EMU is a division of labor between supranational monetary policy and national fiscal autonomy. To complement fiscal autonomy and enforce fiscal discipline, each Eurozone state would retain fiscal liability. Only if one is fiscally liable will one act with fiscal discipline; hence the no bail-out rule (Article 125 TFEU) and the no monetary financing of the budget rule (Article 123 TFEU). A Member State’s ability to spend and repay its existing debts would be based on its ability to tax and—increasingly in the era of the “debt state” and not least due to tax arbitrage in a world where capital moves 18 relatively freely—to borrow. Thus the market would take care of ensuring fiscal discipline by setting bond yields at a level appropriate to the soundness of a state’s finances, albeit with the aid of credit rating agencies and whatever other information is available to financial investors on the creditworthiness of the investment. Market pressure on its own, however, would be insufficient to discipline Member States, especially in a complex, compound and heterogeneous Union such as the Eurozone. That this was clearly understood could be seen from the attempt to create a loose structure of public discipline, the “Stability and Growth Pact.” The deficit and debt levels set by this agreement were violated almost immediately by France and Germany but were under19 enforced by the Council and the European Court of Justice. The fact that its rules—if that is even an appropriate label for its requirements—were leniently enforced, if at all, was given relatively little attention at the time. It was after all, the era of the Open Method of Co-Ordination, soft law, and new governance, celebrated by many as sensible departure from a Community method of law-making that was too centralized and “one-size fits all,” unable to accommodate the constitutional diversity within the Union. When crisis hit, it became evident that fiscal discipline had not been maintained through this twin pronged pressure of market and public logics. Despite the constitutional logic of EMU, financial assistance would be required to Ireland, Portugal and Greece between 2010 and 2012, through bilateral loans, EFSF and EFSM—temporary mechanisms designed for crisis resolution and natural emergencies. But it was accompanied by strict conditionality for the most part consisting in measures that would be called austerity, in order to 20 maintain the logic—in appearance, at least—of fiscal discipline. These measures were not, however sufficient to calm the financial markets. So in August 2012, Mario Draghi promised that the ECB, within its mandate, would do “whatever it

18

See Agustin Menendez, Existential Crisis of the European Union, 14 GERMAN L.J. 453, 453–526 (2013).

19

Case C-27/04, Comm’n v. Council (July 13, 2004), http://curia.europa.eu/.

20

THE FUTURE OF THE EURO 71–72 (Matthias Matthijs & Mark Blyth eds., 2015). Financial market dynamics would also require bank recapitalization in Spain as well as political change in Italy, contributing to the removal of Silvio Berlusconi from office.

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21

takes to save the Euro,” adding, “and believe me, it will be enough.” A month later the OMT program was announced by way of press release, replacing the earlier Securities Market Program, and promising unlimited purchases of selected bonds on the secondary 22 markets. Reducing sovereign bond spreads was not the primary stated purpose of OMT. Rather it was explained on the basis that the financial crisis had influenced the “monetary transmission mechanism” and the ECB had to guarantee the “singleness of monetary 23 policy.” The explicit purpose was to make private credit more easily attainable; but reducing borrowing costs of member states was an expected side effect, helping to “unblock the system” by encouraging banks burdened by toxic assets to lend into the real economy. There were undoubtedly genuine concerns about a Central Bank departing from its mandate and potentially violating its constitutional obligations. But apart from the “runaway legitimation” of the ECB, the substantive concern of the German Court was that conditionality—so central to reconciling financial loans with ordoliberal aims—might be bypassed through OMT. Might this be a way for profligate states to benefit without being disciplined for their profligacy: To have their cake (receive assistance) and eat it too (maintain fiscal autonomy)? The European Stability Mechanism (ESM), agreed by Eurozone governments in September 2012 but using the EU institutions, consolidated the temporary EFSF and EFSM mechanisms and had continued the requirement of negotiating strict conditionality with 24 the Troika in return for assistance. This was even constitutionalized by way of Amendment to Article 136 TFEU and given the ECJ’s seal of approval in Pringle, an important precursor to the OMT ruling. In Pringle, the European Court of Justice held that agreeing to ESM outside the Treaty was legal: Constituting economic policy, it did not encroach on the EU’s exclusive monetary authority, nor did it increase the competence of the EU institutions or involve them in actions that would contradict their mandate. The

21

Speech by Mario Draghi, President of the European Central Bank, Global Investment Conference in London, (July 26, 2012), available at http://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html. 22

Jones, supra note 4, on the difference between these two instruments.

23

Press Release, Eur. Cent. Bank (Sep. 6, 2012).

24

This had already raised concerns in Germany and was challenged by the German Constitutional Court, which insisted on important concessions regarding the protection of the prerogatives of the Bundestag in its ESM (temporary injunction) decision. Bundesverfassungsgericht [BVerfG] [Federal Constitutional Court], Sept. 12, 2012, Case No. 2 BvR 1390/12, http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2012/09/rs20120912_2bvr139012en. html.

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ECJ’s reasoning was derided for its formality, although it was not clear that it had many 25 other options. Nevertheless, the ECJ insisted that ESM satisfied the basic principles of EMU, in particular the logic behind the no-bail out clause (Article 125 TFEU), the maintenance of budgetary discipline. Ingeniously the Court found there to exist a “higher objective” of financial stability of the Euro area as a whole behind the narrower goal of fiscal discipline. Member States were therefore justified in pursuing ESM. But, and this was a key point, ESM could only satisfy the rules if strict conditionality were included as a quid pro quo for assistance. Moreover, because ESM was determined outside EU Law, protections that the Court had painstakingly built up in its fundamental rights jurisprudence would not apply; the conditionality negotiated between the Troika and a recipient state could not for example 26 be challenged on the grounds of violating social rights or labor protection. Karlsruhe’s concern was that if conditions were laxer under OMT than under ESM, the very principles on which EMU was structured might be jeopardized: sound finances and fiscal discipline. OMT might create genuine and unmitigated moral hazard, by encouraging both governments to borrow and financial investors to lend in the knowledge that they could be rescued by the ECB in an emergency and in unlimited amounts. The concern was that this feature might enable the ‘bypassing’ of strict conditionality so central to the justification of ESM (para 79). Member State governments —especially Germany, with a hold on ESM through its voting weight based on a higher financial contribution—may have been concerned that their control could be circumvented by the ECB’s unorthodox monetary policy tools. An expression of Member State “sovereignty,” even if using the EU’s institutions, ESM must not be unilaterally outflanked by a technocratic institution such as the ECB acting with a broader European remit—to rescue the currency by promising its irreversibility. If the OMT is a good example of how EMU is becoming more flexible in one direction— monetary powers—and more rigid in another—fiscal sovereignty, with the ECB uneasily straddling this divide, the German concern is that flexibility might end up mitigating its efforts in the sphere of austerity. This is where the German authorities might find it useful 27 to play the “Karlsruhe card”:

25

See Paul Craig, Pringle: Legal Reasoning, Text, Purpose and Teleology, 20 MAASTRICHT J. OF EUR. & COMP. L. 1 (2013); cf. Michelle Everson, An Exercise in Legal Honesty: Rewriting the Court of Justice and the Bundesverfassungsgerricht, EUR. L. J. 474, 474–99 (2015). 26

Cf. Claire Kilpatrick, Are the EU Bail-Outs Immune to Social Challenge because they are not EU Law?, 10 EUR. CONST. L.R. 393, 393–421 (2014). 27

According to Meyer,

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Because the [German] Court asked European Court of Justice (ECJ) to weigh in, many commentators have assumed that a more euro-friendly court can bless the OMT. But this is not really what Karlsruhe’s decision says. Instead, the subtext is far more to call on the ECJ 28 to adapt the OMT to Germany’s needs. On this point, the ECJ does its rhetorical best to assuage German concerns. Emanating from the substance of the ECJ’s decision is a clear message—connection to conditionality or an “adjustment programme” is what makes OMT legally possible under the Treaty. Only then is moral hazard avoided, and, in the terms used here, “sound finances” maintained. In other words, there is no bypassing of conditionality: OMT is conditional upon full compliance with an ESFS or ESM macroeconomic adjustment programme. To repeat the substantive point: Only conditionality could reconcile financial aid with fiscal discipline and sound budgetary policy; circumventing the markets is allowed only on terms that market logic would supposedly insist on. Conditionality would ensure that Member States acted “as if” under the dictates of market logic. As OMT would only be available to a State already under an ESFS/ESM support program it would, if actually triggered, be connected to the conditionality negotiated between the debtor state and the Troika, a situation referred to by the German Court as “parallelism.” And yet, in reality, OMT was said to have effects as soon as the ink was dry on Draghi’s press release. We will return to that point shortly. But the linking of OMT with conditionality raises an obvious constitutional difficulty. In emphasizing its attachment to “conditionality,” OMT looks more like an economic policy measure. This is outside the ECB’s monetary remit, and therefore not something it should be interfering with. If it is functionally equivalent to the ESM, which according to the ECJ’s decision in Pringle is economic policy, it should be exclusively for the Member States to pursue. This “double

The reality of the Euro crisis is that constitutional law arguments replace political arguments, which goes far beyond an attempt to respect the constitutional framework. The Federal government is not entirely innocent in this development, as they do play the ‘Karlsruhecard’ domestically and in negotiations in Brussels… Clearly, some government bureaucrats have no sense of the potential damage to the community of law that comes with kind of reasoning. As Franz Mayer puts it, as the Constitutional Court increasingly “over-reaches,” “politicians increasingly try to anticipate” its “sensitivities.” Franz Mayer, Rebels without a Cause? A Critical Analysis of the German Constitutional Court’s OMT Reference, 15 GERMAN L. J. 111, 135 (2014). 28

Wade Jacoby, Europe’s New German Problem: The Timing of Politics and the Politics of Timing, in THE FUTURE OF

THE EURO 209 (Matthias Matthijs & Mark Blyth eds., 2015).

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life” of the ECB, acting both in monetary and fiscal matters, raised serious concerns, and 29 was highlighted by the Advocate General in his opinion in OMT. On this point the ECJ is rather formalistic. The ECJ agrees with the ECB that OMT is about price stability and the “singleness of monetary policy” but justifies it along the following lines: Because the ECB only has competence to pursue price stability and the “singleness of monetary policy” this is what the OMT program must be intended to achieve. And unlike the Advocate General, the ECJ is unconcerned that the ECB is involved both as monetary broker in its role as Europe’s central bank and fiscal enforcer through its part in the Troika’s adjustment programs. The ECB would thus come to wield enormous power over a Member State that found itself in a situation of requesting assistance—with the ECB then setting monetary policy as well as negotiating economic policy and monitoring compliance with adjustment programs to the level of detail where it is dictating the opening hours of bakeries. The Court dismisses this concern but then questions whether the OMT is, nevertheless, a disproportional exercise of the ECB’s power. This question, central to the A-G, did not feature at all in the German Court’s referral because OMT was already determined to be in principle outside the realm of the ECB’s competence. It requires exploring in a little more detail because it is in this apparently innocuous passage that we can identify a much deeper disagreement between the European and national institutions, with the ECB and ECJ on one side, the Bundesbank and Bundesverfassungsgericht on the other. First, the ECJ adopts what might be called a “featherweight review” of proportionality, a nominal judicial scrutiny on the basis of conferring a wide margin of discretion to the ECB. Unsurprisingly given this level of deference, the Court finds no “manifest error of judgment”, the ECJ adding that in a “controversial” area like monetary policy, nothing can 30 be required of the ECB except that it use its expertise “with all care and accuracy.” And crucially, the ECJ is keen to retain the effectiveness of the ECB’s proposed weapon, rejecting its limiting along the lines of the BVerG’s paragraph 100, albeit noting that the program is in any case limited in a number of ways. Significantly, however, there is no need in the ECJ’s view for quantitative limits to be set ex ante (paragraph 88).

29

Opinion of Advocate General Cruz Villalón at paras. 143–50, Case C-62/14, Peter Gauweiler and Others v. Deutscher Bundestag (Jan. 14, 2015), http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d2dc30dd72f89a6f42cd4794a189fb6b352be eb2.e34KaxiLc3qMb40Rch0SaxuRaxb0?text=&docid=161370&pageIndex=0&doclang=EN&mode=lst&dir=&occ=fir st&part=1&cid=129342. 30

Id. at para. 75.

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Conceding the inevitability therefore of “some influence” on the primary and secondary 31 sovereign debt markets’ (paragraph 108), the ECJ is adamant that a program such as OMT must not and will not discourage fiscal discipline on the part of Member States; it will not jeopardize the objective or decrease the impetus to follow “sound budgetary policy” (e.g. paragraph 111). Member States, in determining budgetary policy, cannot actually rely on OMT; there is no immediacy or even guarantee that the ECB will intervene, and if it does 32 intervene, the ECB retains the option of selling the bonds “at any time” (paragraph 117). There is no obligation to hold them to maturity. It is not equivalent to the direct purchase of government bonds by the ECB, which would violate Article 123 TFEU. This, however, is surely to miss the point. Budgetary policy at the moment a Member State asks for OMT assistance is no longer determined by that Member State. If fiscal discipline is retained at that stage it is because fiscal autonomy has already been lost; not selfdiscipline any longer, but outside enforcement by the Troika of the adjustment programs connected to EFSF or ESM. By the time OMT would actually be activated, governments would already have surrendered their fiscal sovereignty. The question rather is whether the mere initial promise of OMT has an effect on fiscal discipline. It is at this point that the alleged effect of Draghi’s announcement on Spain and 33 Italy, “shoring up” southern bond markets, becomes a crucial fact. As stated at the outset, neither Spain nor Italy has been placed under a structural adjustment program, although Spain did benefit from indirect bank recapitalization. Neither government, in other words, had to ask for official help under EFSF or ESM for the ECB’s bond-buying promise to work its magic. OMT, it has been said, put any fear of a 34 “doom loop” or “death spiral” in Spain and Italy to rest. If the effect of OMT on them is real, the whole edifice of a trade-off between financial support and austerity collapses. This is where law and economics depart. The promise of financial support may in reality alleviate the market pressure for austerity—irrespective of 31

Id. at para. 104 (“The ESCB’s intervention could, in practice, have an effect equivalent to that of a direct purchase of government bonds from public authorities and bodies of the Member States if the potential purchasers of government bonds on the primary market knew for certain that the ESCB was going to purchase those bonds within a certain period and under conditions allowing those market operators to act, de facto, as intermediaries for the ESCB for the direct purchase of those bonds from the public authorities and bodies of the Member State concerned.”). 32

Although the ECB has the possibility to hold the bonds to maturity, a Member State “cannot be certain” that will happen. 33

See, e.g., Jonathan Hopkin, The Troubled Souther Periphery: The Euro Experience in Italy and Spain, in THE FUTURE OF THE EURO 161 (Matthias Matthijs & Mark Blyth eds., 2015). 34

Jones, supra note 4, at 63–64.

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the legal argumentation that links them together — and assuming that is otherwise what the markets would demand. And that assumption—that conditionality mimics the pressure on states to retain fiscal discipline that would otherwise be enforced by the financial markets—suffers from a further problem: The evidence seems to refute it. To be sure, the market’s preference for austerity would be doubtful by any measure of economic reason, assuming its contractionary effects. The irrationality of austerity is by now well documented. As Mark Blyth shows, its irrationality can be substantiated by any number of historical examples: The facts just do not support the argument that austerity works in the way its advocates suggest. Specifically, the fall in yields of government debt in the Euro zone had nothing to do with any neo-liberal structural reforms, reductions in public expenditure, privatizations, regressive tax rises and so on. The fall in yields certainly did not correlate to any reduction of sovereign debt—always touted as the ultimate reason for austerity—because debt continued to rise as austerity was pursued. Blyth demonstrates that post-OMT yields or in 35 his words, “Draghi-put yields” are negatively correlated with sovereign debt loads. But what then does a central bank liquidity-put “designed to back-stop financial markets that are running out of funding (the purpose of OMT) have to do with cutting the state’s budget?” In other words, what does financial stability have to do with enforcing “strict 36 conditionality”? The answer, according to Blyth, is “nothing at all”: “Central bank policy, not public sector cuts, brought down yields and stabilized European sovereign debt markets. And so long as the markets believe that Draghi’s promise to use Outright Monetary Transactions (OMT) — direct bond buying by the ECB if yields spike again — is 37 credible, then those yields will stay down.” This non-relation between austerity and financial stability should not be too surprising. “Austerity”, after all, is an ideology, not an economic theory; often is it more effective in 38 rhetoric than effected in practice. This also makes it a very difficult target.

35

Blyth, supra note 1, at 251.

36

Id. at 247.

37

Id. at 249.

38

This has proved to be the case outside the Eurozone too, e.g. in the UK. See Simon Wren-Lewis, The Austerity Con, LONDON REVIEW OF BOOKS (Feb. 19, 2015), http://www.lrb.co.uk/v37/n04/simon-wren-lewis/the-austerity-con.

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C. The Euro Is Irreversible! No matter how coherent the economic theory, how sound the constitutional basis, the consequences of OMT seemed clear enough. On the plus side—at least from the perspective of government borrowing—yields dipped. The economic justification for “Draghi’s put” was that the yields on peripheral bonds were “irrational” because the market, incorrectly, had begun to assume the possibility of break up of the currency and was factoring in the possibility of contagion following orderly or disorderly exit from the Euro, a “convertibility” or “redenomination” risk in the jargon. As the Euro was deemed “irreversible”—meaning that everything would be done to save it—it was irrational for the market to be pricing interest for government borrowing at such high 39 levels. The risk premia were “excessive”, in the concurring words of the European Court of Justice. The ECB was therefore justified in stepping in to correct them. To quote the crucial passage of the ECJ in full, [t]he purchase, on secondary markets, of government bonds of the Member States affected by interest rates considered by the ECB to be excessive is likely to contribute to reducing those rates by dispelling unjustified fears about the break-up of the euro area and thus to play a part in bringing about a fall in—or even the elimination of—excessive risk 40 premia. There is a wonderful circularity to this. According to the ECB, OMT was appropriate to avoid excessive premia for certain MS on the basis of a non-existent risk of break-up of the Euro area perceived on the part of investors. OMT dispelled “unjustified fears” about the break-up of the Euro area. This is of course self-fulfilling—by promising OMT, such risk is indeed reduced, such fears less justified. This is the whole point of the “Draghi put”: A credible promise by a powerful institution that the Euro would not break-up would make it less likely that the Euro would in fact break up. Markets work on the basis not only of imperfect and unequal knowledge, but also of beliefs. But is rationality based on knowledge or on belief? And if belief matters, how is it to be quantified? This is not merely academic—the idea that a financial market could respond irrationally would be a key disagreement between the ‘expert opinion’ of the Bundesbank and the ECB

39

Cf. on the irrationality of the sovereign bond market as a whole, see Gerner-Beuerle & Schuster, supra note 3.

40

Gauweiler, Case C-62/14 at para. 76.

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41

in the hearings before the German Court. The Bundesbank, with the Bundesverfassungsgericht concurring, rejected the notion that the market could have 42 priced sovereign debt irrationally. Markets were simply pricing in the risk of default based on peripheral profligacy and unsound finances. This debate lies at the heart of the OMT judgment: The ECJ accepted the legitimacy of the ECB’s margin of discretionary action in the case, justifying the program in its essentials, on the basis that the Euro is indeed irreversible, the fears about its break-up unjustified. To pursue this point, we need to consider the rationality of the yields in the period of convergence following the launch of the single currency. It is important to remember that there are two sides to the avoidance of moral hazard; not only the public debtor, but the private creditor is taking calculated risks. As by now is well known, interest rates on peripheral sovereign bonds dipped in the run-up to and following the introduction of the single currency, with Eurozone states borrowing at roughly similar rates, in what appears to be a spectacular convergence. This propelled a credit boom, with northern European banks in particular lending to the periphery in vast amounts, which facilitated consumption of northern surpluses, emanating, for example, 43 from Germany and the Netherlands. If this was bound to create asset bubbles in the periphery through a transnationalized form of “privatised Keynesianism”, by substituting private debt for public demand management and elsewhere to function in clientilistic states as a disincentive to pursue modernizing reforms, few seemed particularly 44 concerned. But once it became clear that Greek fiscal fundamentals were not as healthy as previously thought—a twelve percent instead of six-and-a-half percent government deficit was announced shortly after the center-left PASOK was elected in October 2009 (although it was long understood that Greece had fudged its entry in conjunction with Goldman Sachs)—the markets, still reeling from the global financial crisis that began with the collapse of Lehman Brothers in September 2008, took aim at Greece, and other weak links in the Euro chain. In a short space of time yields on Greek, Spanish and Italian bonds shot

41

The German Court had been keen to add that it found more “convincing” the expertise of the Bundesbank than the OMT Decision, BVerfG, Case No. 2 BvR 2728/13 at paras 71. 42

Id. at para 98 (describing as “meaningless” the idea that a portion of the debt was irrationally priced).

43

And, it is important to note, not through productivity gains, but through wage repression, see Abraham Newman, The Reluctant Leader: Germany’s Euro Experiment and the Long Shadow of Reunification, in THE FUTURE OF THE EURO 117–36 (Matthias Matthijs & Mark Blyth eds., 2015). 44

See Menendez, supra note 18m at 494–97.

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up back towards their pre-Euro levels, and Greek bonds were eventually graded junk in April 2010. Once the banking bubble turned into a banking crisis and then into a sovereign debt crisis as liquidity dried up and banks were demanding rescue, the situation started to become more problematic. The sequence of events should not have surprised economists: 45 “banking bubbles and busts cause sovereign debt crises. Period.” But it merits repetition. There were more general concerns at the time about the solvency of the co-called PIIGS (Portugal, Ireland, Italy, Greece, Spain) and contagion was feared. The subsequent bailouts of Greece, Ireland and Portugal “were connected by European financial markets – both to each other and to the rest of Europe . . . As this process wore on, the European financial 46 crisis evolved into a full-fledged sovereign debt crisis.” At the time of the first Greek bail-out, Greek debt was mostly privately owned, held largely 47 by French and German banks. The financial problems in Ireland and Spain were also bank-related; housing-bubbles had grown on the back of credit bubbles. A solution was required to protect these private banks from losses at such a delicate financial moment. Banks were considered too big to fail, at least outside Iceland. But the banking system as a whole was too big to bail. Although Merkel initially announced that each country would have to deal with the 48 aftershocks of the global banking crisis separately and individually, it soon became 49 evident that Greece would require a bail-out in order to prevent default on its debt. Either Greece would have to be bailed out, and the Northern European banks saved indirectly, or Greece would default and those banks would have to be bailed-out directly. It 45

See Jakoby, supra note 2, at 73 (noting that even Reinhart and Rogoff argue that in eighty percent of cases a banking crisis is followed by a sovereign debt crisis. This is supposedly why a government should never let a bank go bust, a point Bagehot emphasized more than a hundred years ago). 46

Jones, supra note 4, at 54.

47

European banks, not least those in the core in German and France “were attracted to the margin of interest that could be procured on peripheral euro-zone state bonds and concluded that the risk that the margin represented—massively underpriced as it was by the markets—would ultimately have to be borne by the European Central Bank (ECB) in the interests of the systemic stability of the currency union, not themselves.”’ Helen Thompson, Austerity as Ideology: The Bait and Switch of the Banking Crisis, 1 COMP. EUR. POLS. 729, 730 (2013). 48

See George Soros, The Tragedy of the European Union and How to Solve It, NEW YORK REVIEW OF BOOKS (Sep. 27, 2012), http://www.nybooks.com/articles/archives/2012/sep/27/tragedy-european-union-and-how-resolve-it/. 49

The story of course begins pre-Greek bailout. The “European rescue of the Washington Consensus” begins with the financial assistance granted to Hungary, Latvia and Romania in 2008. On the link between the mutation of Hungary and the Debt Crisis, see Claire Kilpatrick, Constitutions, social rights and sovereign debt states in Europe: a challenging new area of constitutional inquiry (EUI Law, Working Papers 2015/34).

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was determined that Greece would continue to borrow money to service its debt, loans which would therefore return to the places it had borrowed from, there being little appetite either in Greece or the rest of the Euro zone for any kind of default or debt 50 restructuring, a theme that should, by now, be recognizable. Even the modest, voluntary, haircut accepted by private creditors was accompanied by various sweeteners, and anyway dwarfed by the 1 trillion passed the way of the banks at nominal interest rates, beginning with the first act of Draghi as Central Bank President when he took over from Trichet in 2011 (Long Term Refinancing Operations (LTRO’s) at one percent and later three-quarters of one percent over three years). It has been calculated that total state support of the financial sector amounts to some five trillion 51 Euros. But, in the narrative of the Eurozone crisis, a private debt crisis would be turned 52 into public one, in the course of the greatest “bait and switch in history.” The economic situation—despite the bilateral, ESFS, and EFSM loans—had continued to worsen, debt loads had continued to rise and unemployment to increase. Austerity was not only reducing the prospect of a return to growth in countries such as Greece, Ireland and Portugal, it was destroying the hopes of their citizens, particularly the young—by June 2012 youth unemployment in Greece was running at over fifty percent. And yields were still continuing to rise through 2012. Despite historically low Central Banks interest rates, money was not being passed on through the general economy; banks loaded with toxic assets (non-performing loans) were holding on, despite the huge injections of liquidity 53 through Draghi’s LTRO’s. In the view of the ECB, the monetary transmission mechanism was not working. Variations in liquidity and in bond yields did not reflect the fact that the Euro was a single currency, the Euro zone a single currency area. This link between sovereign bonds and general economic performance was crucial in justifying OMT. According to the ECB (with the ECJ concurring, or at least deferring on this point), the spike in peripheral bond yields was based on unfounded fears of a break-up of the currency. With economies continuing to tank, something needed to be done. It was at this point that Draghi loaded his bazooka, and aimed. But whom was he protecting?

50

See Most Aid to Athens Circles Back to Europe, N. Y. TIMES (May 30, 2012).

51

See BLYTH, supra note 1, at 249.

52

Id.

53

Id. at para. 78 (“It is undisputed that interest rates for the government bonds of a given State play a decisive role in the setting of the interest rates applicable to the various economic actors in that State, in the value of the portfolios of financial institutions holding such bonds and in the ability of those institutions to obtain liquidity.”).

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To consider this question fully demands raising an aspect of moral hazard that is less conspicuous in the recent literature on the Eurozone crisis, as if it is already forgotten that the sovereign debt crisis begins with a banking crisis. The set-up of EMU should have deterred private creditors investing too heavily in countries with unsound finances as well as deterred states from over-borrowing; the avoidance of moral hazard should cut both ways and equally apply against bank bailouts as sovereign assistance. Behind every irresponsible borrower is an even more irresponsible lender. The financial tool of choice has since moved from OMT to Quantitative Easing (QE), incidentally scheduled to begin a week after the Advocate General’s opinion had given OMT a qualified green light in January 2015. QE may only prolong an illusion of economic 54 recovery. But, building on Wolfgang Streeck’s suggestion, it reflects the fact that the morality tale that ultimately triumphed in the narrative battle of the Euro crisis was of debtor state profligacy rather than creditor irresponsibility: “The idea that it is only right and proper for all debtors to pay off what they owe is a myth that serves to moralise global finance markets under cover of the morality of everyday life – and to make opposition to 55 their demands appear immoral.” This morality tale, however mythical, was strengthened by the European institutions led by the most economically powerful Member State in the Eurozone, and buttressed by its Constitutional Court. The frugal “Schwabian housewife” became the model for countries to emulate, however inapposite the analogy. The banking crisis was relegated to a footnote. But, with the goal of encouraging private investors to keep lending to Euro area States, a constitutional claim was launched that would take priority over the actual if not rhetorical promotion of austerity: the Euro is irreversible. D. … Or is it? On the day that the European Court of Justice delivered its OMT ruling, the 16 June 2015, eyes were on Athens rather than Luxembourg. Some sixth months earlier, the Greek people had elected the assorted Left-wing party Syriza to power, forming a coalition with the conservative and nationalist Independent Greeks. Anger in Greece at austerity measures had existed since before even the first bailout in May 2010; by the second bailout, agreed in March 2012, there were large-scale protests and rioting in Athens. This by then was part of a broader social and political dynamic, reflected by the global Occupy movements and the Indignados movement in Spain—out of 54

QE Will Lower Living Standards in Long Term: Prospect of improvement in Growth is Largely A Monetary Illusion, FINANCIAL TIMES, March 25, 2015. 55

WOLFGANG STREECK, BUYING TIME: THE DELAYED CRISIS OF DEMOCRATIC CAPITALISM 161 (2014); for the long view, see DAVID GRABER, DEBT, THE FIRST 5,000 YEARS (2012).

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which would rise with extraordinary speed the political party Podemos—protesting against what were perceived to be austerity agendas imposed by the Troika and other political and 56 economic elites and serving only the interests of these elites. The situation of increasingly open conflict in the Eurozone had even begun to startle the most staunch Europhiles, German sociologist Ulrich Beck opening his book A German Europe by expressing the incredulity he felt upon hearing, in February 2012, that “today 57 the Bundestag will decide the fate of Greece.” These bailout packages in general, and OMT in particular, were significant aspects in a strategy of “extend and pretend”: lending or promising to lend enough to extend the illusion of solvency and denying the need for any serious discussion of debt relief or restructuring, permitting the game to continue as before. In Wolfgang Streeck’s apposite expression, the ECB was merely “buying time”, papering over cracks that would continue to grow beneath the surface. What effect might OMT have had on the motivation of political elites, national and European, to reform the structure of the Euro governance regime, by agreeing, for example to Eurobonds, comprehensive banking union or other institutional changes geared towards pursuing economic growth? Not very surprisingly, “the governments’ willingness to adopt common institutional or economic measures declined once the 58 pressure receded.” OMT was by all accounts, a crucial pressure valve, but at the cost of lessening the resolve to have proper institutional reform. Moreover, the rescue packages offered, whether via EFSF, ESM, or OMT are invariably presented as aimed at rescuing ailing Member States rather than irresponsible private creditors. And preventing sovereign bankruptcy comes with a serious public cost, namely that national fiscal sovereignty is lost; a country dependent upon aid is stripped of any 59 pretense of democratic government. Syriza was elected in Greece in January 2015 with the promise to regain democratic selfgovernment, and more specifically with a dual mandate to remain in the Eurozone and end an austerity agenda that was harming the most vulnerable in society.

56

See MARY KALDOR, SABINE SELCHOW, SEAN DEEL & TAMSIN MURRAY-LEACH, THE BUBBLING UP OF SUBTERRANEAN POLITICS IN EUROPE (2012). 57

ULRICH BECK, GERMAN EUROPE (2013).

58

Jakoby, supra note 2, at 82–83.

59

On the way this played out prior to Syriza’s election in January 2015, see Kevin Featherstone, Le Choc de la Nouvelle, Maastricht, déjà vu, and EMU Reform, (LEQS, Working Paper 52/2012).

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As would soon be discovered, that was ‘mission impossible’, at least as far as the Euro 60 group leaders and the European institutions were concerned. And they were not only in a numerically and financially superior position to the Greek government but also armed with the “rules of the game,” a constitutional structure of Economic and Monetary Union built 61 on ordoliberal principles of fiscal discipline, market logic and avoidance of moral hazard. The Euro group of Finance Ministers also had the clear advantage of institutional ambiguity, enabling them to play outside the rules and having only hypothetical rather than real constituencies to represent. The Euro group itself is an institution that exists almost entirely in a legal void, as caustically noted by its own President, Jeroen Dijsselbloem, when its convention of unanimity was swept aside in order to deal with a recalcitrant Greek Finance Minister. The Euro group is formally an “informal group”, according to article 1 of protocol 14 attached to the Treaty of European Union. This combination of a strict ruled-based ordoliberal rhetoric adopted by shadowy institutions that exist above the rules is an unorthodox one from a constitutional perspective, but also, it seems, a forceful one in conditions of political and economic emergency. Although Syriza was elected expressly on a mandate to reject austerity, each representative of the Euro group could claim hypothetical resistance to any unconditional or non-austere bailout of Greece from their own constituencies — as if each had been explicitly mandated by its people to refuse the loosening of austerity not merely on itself 62 — but also on Greece. The re-emergence of right wing nationalism within the Euro zone would hinder Greece’s prospects of benefitting from any transnational solidarity, and was an unexpected boon to those arguing for Greek submission to the creditors’ strict 63 demands. Responsiveness to constituencies elsewhere was, of course, an easy and superficially powerful claim to make, but it had less weight when argued by those with no national constituency to represent, such as the Presidents of the various European institutions — Bank, Commission, Euro group, Council, and of course the head of the IMF. The sixth month long negotiations exploded the myth that inter-governmentalism proceeds through 60

The IMF has played a more ambiguous role.

61

The extent to which the constitution of EMU is (or is still) truly ordoliberal is disputed. See, e.g., Christian Joerges, Europe’s Economic Constitution in Crisis and the Emergence of a New Constitutional Constellation (Zentra, Working Paper, 06/2012), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2179595. 62

The point is not to deny that this might well be the reaction of other electorates; but it remains speculation. If the leaders thought it was the right thing to do, if only they had a free hand, they could have attempted to persuade their electorate that is was in their interests. 63

As an aside, it is telling how far the project has travelled that so much attention has been devoted to crushing a Greek government with moderate social democratic aims, and so little to a Hungarian government that recently announced the desire to return the death penalty – amongst other things.

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rational interstate bargaining, given that the effect of further austerity, particularly in the absence of debt restructuring, would almost certainly be to reduce the Greek pie from which creditors would be repaid — including one must presume, to the detriment of the Euro group’s and creditors’ own constituencies, at least in the long-term. Bargaining took place in the shadow of a “non-ideological ideology” where the Euro group plus the Troika 64 apparently held not only a trump card but a conversation stopper: ordoliberal austerity. The Greek Party Syriza had only the forlorn hope that “justice”, “history” and “European 65 values” were on its side, and that it was in possession of the “better argument”, a claim bolstered by a phalanx of Nobel prize winning economists and noteworthy political scientists from their position on the sidelines, but otherwise surely a sign of desperation in 66 times of financial crisis. Yet this faith was so strong that hardly any serious preparations had been made to put “Grexit” on the table as a credible bargaining tool in the negotiations that would follow Syriza’s election victory. A serious Grexit strategy would have had less leverage in 2015 than in 2010 when Greek default could potentially have had an enormous impact on a global economy that was still reeling from the collapse of 2008 (hence the walk along the beach in Cannes when Merkozy successfully dissuaded Papandreou from holding a referendum). But it would still have had some clout given the historical investment of the European political elites in the project of integration. Instead, Syriza believed that they could convince their European partners to ease the austerity programs and restructure a sovereign debt that hardly anyone thinks is realistically repayable. They too were hampered, but by a constituency, as well as a leadership, that was not willing or politically prepared to appear un-European by 67 putting “Grexit” on the table itself. Here, then, we come to a key point of this whole saga, which is missed if the focus remains solely on the legal text or the judicial decisions. Recall that OMT, in the view of the ECJ, legitimately dispelled “unjustified fears” about the break-up of the Euro. We now know, however, that such fears were real. But we know that from an unexpected source—the German finance minister. 64

See The Donald Tusk interview, FINANCIAL TIMES (July http://blogs.ft.com/brusselsblog/2015/07/16/donald-tusk-interview-the-annotated-transcript/ contextualizing the German lead on austerity, see Newman, supra note 43.

16, 2015), Reference. On

65

See Helena Smith, Tsipras Favour Greek Jobless over Creditors in Defiant Policy Speech, THE GUARDIAN (Feb. 8, 2015), http://www.theguardian.com/world/2015/feb/08/greece-prime-minister-alexis-tsipras-unveil-antiausterity-plan-parliament. 66

67

Including e.g. Joseph Stiglitz, Paul Krugmann, Jeffrey Sachs, Thomas Picketty, Jurgen Habermas.

As Hopkins notes, “in the southern democracies euro membership was an unquestioned national objective, with only peripheral and mostly extremist political forces offering an alternative view.” Jakoby, supra note 2, at 162–63.

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It was thought that the risk of break-up would be realized from a country defaulting on its debt. And it is worth reiterating that there is no legal option of exit from the Euro. OMT was designed to prevent the practical likelihood of a country forced to leave “voluntarily,” to deter the financial markets from pushing a country over the edge. (In practice it might precipitate a domino effect, the markets targeting the next “weakest link” in the Euro chain. There is, in other words, a flipside to the Draghi “put”: If it were actually triggered, investors might be spooked to such an extent that it would entirely backfire. The ECB’s promise, then, begins to resemble a feature of the MAD logic that was thought to apply to the Courts: Some weapons are effective only if they are not actually used.) Since the election of Syriza on a platform of renegotiating the memoranda in order to reject or at least to temper the austerity packages, the ECB has taken on a new role. It was able to use the threat of freezing emergency liquidity (ELA) to Greeks Banks as a warning tool, wrecking the entire payments system and threatening the economic stability of the country. This precipitated a flight of capital, and then a liquidity crisis, followed, as we know now, with the imposition of limited cash withdrawals from Greek bank accounts (60 Euro per day), as the ECB froze ELA when the (in)famous referendum was promised by Alexis Tsipras at the end of June this year. Sovereign debt is issued in a currency the Member States of the Eurozone have no control over. This means that some states are highly vulnerable to attacks from the financial markets and that there is only one way for them to regain “competitiveness” — internal devaluations, meaning neo-liberal structural reform and austerity. In times of crisis this lack of autonomy becomes acute. If ever proof were needed that the Euro is a currency with foreign masters for its member states, the actions of the ECB in Greece over the last six months was surely it. As French economist Michel Aglietta puts it, the Euro “is a foreign currency for each 68 country.” He continues: There is, however, one country for which the euro is less external than it is for the others: Germany. If Berlin were to agree to play the role of benevolent leader— that is, taking onboard the interests of the monetary union as a whole, while pursuing its own policies—it might have been possible to arrive at a second-best scenario; but it has done nothing of the sort. Historically, monetary unions have gone in one of two directions: either they have been dissolved—the Latin and Scandinavian unions—or they have moved 68

Michel Aglietta, A European Vortex, 75 NEW LEFT REV. 15, 15–36 (2012).

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towards constituting political sovereignty, as when the Zollverein customs union formed the basis for the 69 German Reich. Political sovereignty, however, has not moved upwards to the supranational institutions. Something else happened in the course of the recent Greek crisis. Lending programs previously dealt with technocratically, by the Troika, in a “non-political” or “non-ideological way”, the scare quotes here of course quite deliberate, became spectacularly politicized, not just in a Left/Right sense, but in a new, geo-political way. Proposals and counterproposals were brought out into the open in the Euro group, not least due to the presence of an unconventional figure on the scene, in the shape of a Greek finance minister unwilling to follow the rules of the game. What was new was not the decision of the Euro group and Troika to attempt to manage Greece as if a protectorate or an outpost of economic colonialism. That was already well understood as a consequence of the asymmetric and incomplete economic union, long 70 before Syriza obtained power. What was new was the realization that the threat of Grexit would not be one used—or even laid out on the table as a bargaining tool—by Greece, at least not yet. On the contrary, less than a month after the ECJ’s OMT ruling legally reinforced the irreversibility of the Euro, and the Greek’s offered their own political reinforcement to this claim, it became clear that at least for one country the unity of composition of the Euro may no longer be sacrosanct. Not for Greece, but for Germany: The Euro is reversible. The so-called Schaüble plan, scribbled on the back of an envelope and presented at the Euro group meeting on 11 July signaled not only the willingness, but the preparation— 71 however half-baked—for a “temporary,” managed “Grexit.” This is a truly political and constitutional event for Europe. It was previously assumed, and on good authority, that European political elites—especially German—would never let the Euro fail, epitomized in Merkel’s claim that “if the Euro fails, Europe fails.” “Defence of the Euro at any price” was a matter “not only of economic expediency but also of German 72 political and moral raison d’etat.” 69

Id.

70

See, e.g., GIANDOMENICO MAJONE, RETHINKING THE UNION OF EUROPE POST-CRISIS (2014).

71

See How Germany Prevailed in the Greek Bail-Out, N. Y. TIMES (July 29, http://www.nytimes.com/2015/07/30/world/europe/how-germany-prevailed-in-the-greek-bailout.html. According to the article, the plan originated from Slovenia. 72

STREECK, supra note 55, at 149.

2015),

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That may still hold good. But now we know a little more about what that means, or at least about what it does not mean. It does not mean that the “weakest link” will be retained at any cost, rescued on conditions that are acceptable to its people. On the contrary, it seems that the weakest link may well be used in order to demonstrate to others that the principles upon which the Euro must proceed and the masters upon whose control it rests are non-negotiable and not at all up for grabs. It was openly noted by European political elites that a “no vote” in the Greek referendum would actually be punished. As indeed it was. But politicization has gone further. The most independent central bank in the world has now become one of the most politicized. The European Court of Justice has rubberstamped this transformation in its OMT judgment. But the justification for its stamp now looks flimsy. Pandora’s box has been opened: The Euro is reversible. E. Conclusion If OMT, and now QE, threatens the first edifice on which the Eurozone was built — fiscal discipline, then ‘Grexit’ openly erodes the second — the irreversibility of the Euro as a constitutional promise of European unity. On both counts it is hard to disagree with Jürgen Habermas: The recent treatment of Greece is an “act of punishment” against a left-wing government that dared openly to oppose austerity whilst promoting values of European 73 integration. In terms of the damage this act of punishment will do to the future of the European project, only time will tell. It does not look promising. There is of course nothing new in government resorting to extraordinary measures — formal as well as informal — in times of crisis or emergency in an attempt to restore order, 74 security, or a return to economic normality; nor in a compliant judiciary. What is distinct in the wake of the raft of measures implemented since the Euro-crisis is the way 75 extraordinary measures appear to be becoming the “new normal”. Thus, they are not justified on the basis of needing to respond to an “emergency” that will be over at any identifiable future point. Rather, their justification lies in the need to assuage the markets, maintain the “singleness” of the currency, avoid moral hazard and ensure fiscal discipline. 73

See Interview with Jürgen Habermas (July 16, 2015), available at http://www.theguardian.com/commentisfree/2015/jul/16/jurgen-habermas-eu-greece-debt-deal. This aspect of Eurozone politics is not often addressed. Conditionality (austerity) is what Blyth calls a “class-specific put-option.” It protects the top seventy percent who have assets and hurts the bottom thirty percent who most depend on public services. 74

See generally Victor Ramraj, No Doctrine More Pernicious? Emergencies and the Limits of Legality, in EMERGENCIES AND THE LIMITS OF LEGALITY 3–29 (Ramraj ed., 2008). 75

See Jonathan White, Emergency Europe, POLITICAL STUDIES (2015).

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There is nothing distinctly temporary about these needs — they are the products of an ideology, not of a particular situation. In true Schmittian fashion, an enemy has even been identified; the “enemy within” this new constitutional project are those “bad Europeans” 76 who disregard the economic stability criteria. Politically, the euro has undergone a significant, if yet only vaguely perceptible mutation. From being a currency without a state and a symbol of European unity, it now looks increasingly like a currency with an ideology—austerity—and a core geopolitical constituency, a large bloc of nations led by Berlin, willing to defend it against ideological and political enemies, even if in practice permitting departures from its strictures when expedient to do so. This signals a rejection of the notion of solidarity under economic governance, pushed, to little avail it seems by the French, in favour of stability under constitutionalized rules of the game that can be bent when necessary. German ideology, including by way of the German Constitutional Court, is being imposed on the rest of the EU—although many seem to be voluntarily swallowing the medicine, and even with relish. To be sure, against this background, the disagreement between Karlsruhe and Luxembourg appears rather churlish, if not childish. On the main substantive point there is concurrence—OMT must not jeopardize strict conditionality. But this is only an appearance; dig deeper and it turns out that there is a fundamental difference between the two courts. For the ECJ, unlike the German Court, the Euro is irreversible. But if it looks juridically as if the European Court of Justice comes out stronger after OMT, it is Karlsruhe that may have the last laugh, judging by the way the constitutional politics have been played out above the heads of both Courts. OMT, although based on the irreversibility of the Euro, may, in the final analysis, and paradoxically so, also make “Grexit” easier to manage in the future: Reducing and containing the remaining threat of contagion in conjunction with other firewalls that have been built around Greece. It is perhaps with this knowledge in mind that Tsipras now declares in full harmony with neoliberal rhetoric and ordoliberal philosophy that there is, after all, “no alternative” to austerity. The irony is that the more austerity is pushed—in actuality rather than merely rhetorically—the more a country such as Greece will likely require further rescue. ‘Extend and pretend’ will continue. The difference now is that this can no longer be expected on the sole basis that the Euro must not fail for each and every member; it is only to be expected so long as the rules of the game are not openly contested. Who will be next to dare contest them?

76

See Udo di Fabio, Karlsruhe Makes a Referral, 15 GERMAN L.J. 107, 107–10 (2014). For Di Fabio, oddly, the crisis was caused not by financial problems accumulated over years of neo-liberal excesses (as even many of its architects concede) but “massive violations of the law,” without explaining the chain of causation. He also appears to query the independence of the ECJ because it has a Greek president.