Merkel poised for catastrophic blow as Bundestag could block Covid recovery fund

Germany: Expert looks at Merkel’s response to pandemic

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The EU’s recovery fund could suffer long delays as the Commission claimed most national spending plans submitted so far still need work to get approved. Germany’s submission is among those deemed to fall short of expectations, while southern European nations such as Greece and Spain have the strongest plans. Officials close to the discussions noted some countries have not even made proposals at all yet.

The German government is said to be in talks with the Commission to reduce some of the hurdles to investment in its plan.

A Commission spokeswoman said that staff are in “intensive dialogue” with member states as they seek to make disbursements starting from mid-2021.

The slow progress with the €750billion (£668billion) fund threatens to slow the region’s recovery, and it highlights how the EU is lagging behind other advanced economies.

The bloc is already struggling to step up coronavirus vaccinations and extended lockdowns mean it is running at only about 95 percent of its pre-pandemic output.

To make things worse, Bernd Lucke, a German economics professor and founder of the right-wing Alternative for Germany (AfD) party, is bringing a potentially disruptive complaint to the German constitutional court that could essentially stop ratification of the fund.

The recovery fund cannot be mobilised unless all parliaments in EU member states have approved the own-resources package, and if the German parliament fails to pass it, the bloc’s strategy for rebuilding after the pandemic could be torpedoed.

Head of Oxford-based think-tank Euro Intelligence Wolfgang Munchau explained in a recent report: “The Bundestag is in the final stage of debate of the law.

“President Frank-Walter Steinmeier is expected to sign it shortly after it is finally agreed.

“Lucke and his supporters are asking the court to accept their case before Steinmeier signs.

“It is practice that the German president withholds his signature while a court case is pending.”

It is not clear whether the court will accept the case, or if it does, whether it will accept it in time to stop the law from becoming effective.

Nevertheless, according to Mr Munchau, the recovery fund raises issues under German constitutional law with potentially serious implications for the EU as a whole.

He added: “We don’t see the worst-case scenario – of Karlsruhe [the Federal Constitutional Court] actually blocking the recovery fund.

“What we do see is Karlsruhe imposing restrictions on the German government going forward – as it did in previous EU-related cases.

“Our reading from previous EU and euro-related court rulings is that Karlsruhe believes an EU fiscal union to be unconstitutional.

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“Its view on the matter will depend on whether Karlsruhe will see the way the fund is financed – through joined debt – as constituting a fiscal union in a legal sense. We have argued before that it does not constitute a fiscal union in an economic sense because it is far too small.”

Unlike Mr Lucke, Mr Munchau noted, his think tank supports an EU fiscal union, but they agree with him on the legal issues.

He concluded: “We think the notion of a perpetual recovery fund is ultimately doomed, for legal and political reasons, and will never produce a fiscal union of sufficient size.

“What we fear is the hologram version of a fiscal union – the one that allows European politicians to congratulate each other and pretend they have done the job.”

In its report on the case, Frankfurt-based newspaper FAZ made the point that the German Constitutional Court has acquired a fair degree of legal knowledge on EU monetary and fiscal affairs, including during the long case involving asset purchases.

It is possible therefore that they could act quickly.

German lawyer and politician Dr Peter Gauweiler echoed Mr Munchau’s claims in an exclusive interview with, in which he described the recovery fund as “absolutely illegal”.

The lawyer harshly criticised the package and explained: “In the end, it is contrary to the structures of the European treaties.

“Fiscal law should not be Europeanised because of the bigger legitimisation basis of the national parliaments.

“It’s absolutely illegal.”

When asked if a member state could then halt the plan, Dr Gauweiler added: “Every country has its own legal protection mechanisms.

“Here in Germany, it is the constitutional complaint, which every German can bring to the German Constitutional Court if his right to vote is impaired.

“And our line of reasoning is that the right to vote is undermined by these measures.

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“Especially in the area of fiscal law for example.

“And these are the levers with which you can attack these decisions – the agreement of your own government about these decisions.”

A similar situation occurred in 2009, when the bloc agreed to the Lisbon Treaty, sparking a widespread debate in many European countries, including Germany.

Dr Gauweiler and a number of left-wing deputies from Die Linke challenged the ratification of the Treaty before the Constitutional Court, saying the proposed reforms would undermine the independence of the German parliament and clashed with the German Constitution.

On June 30, 2009, the German Constitutional Court delivered its verdict stating that the Lisbon Treaty complied with German Basic Law.

However, the court also produced an unyielding defence of national sovereignty, which arguably put an end to the EU’s march towards statehood.

The German judges declared the EU is “an association of sovereign national states” that derives its democratic legitimacy from the member states and not from the European Parliament.

They also stated that Germany’s Basic Law, or constitution, promotes peaceful co-operation within the EU and the United Nations, but this is not “tantamount to submission to alien powers”.

On the contrary: the Basic Law denies the German government the power “to abandon the right to self-determination of the German people”, which they exercise by voting for their own parliament, which in turn must not be denuded of powers because otherwise German democracy would become meaningless.

The judges added that measures of European integration “must, in principle, be revocable”, and declare that they themselves have the right to safeguard “the inviolable core content” of the German constitution: a process that “can result in Community law or Union law being declared inapplicable in Germany”.

In a 2009 Telegraph report, British journalist Andrew Gimson emphasised that the judgement did not actually prevent the German government from endorsing Lisbon, but the court insisted, as a condition of ratification, that certain measures had to be taken to strengthen the position of the German parliament.

He wrote: “Jan Techau, a brilliant young analyst at the German Council on Foreign Relations, questions whether the court will ever follow words with deeds: ‘The court has always barked but it has never bitten’.

“Mr Techau points out that ‘Germany has traditionally been very integrationist’ and believes that ‘the German people are not generally eurosceptic.’”

However, Mr Gimson noted the court’s verdict still induced apoplexy in the surviving members of the West German political class that committed itself to European integration.

Prof Michael Stürmer, who from 1981 was an adviser to Helmut Kohl on European policy, told the publication: “[The judgement] is an absolutely irresponsible decision.

“There will be a new generation without a sense of history, without that great project of Europe – it’s bizarre and it’s sad.”

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