The “Rumble in Karlsruhe”: The German Federal Constitutional Court’s Historic OMT Case

—Russell A. Miller, Professor of Law, Washington & Lee University School of Law

A few years ago I was at a transatlantic policy event in Washington, DC.  It was the height of the Eurozone’s sovereign debt and banking crisis and there was palpable fear that that the Euro would crumble.  If the ten year old currency union were brought to its knees, it would be the result of a near-fatal one-two-punch.  The hard left-cross had been delivered by the profligate budgetary policies in the so-called “crisis countries.”  And the match-ending right-handed uppercut had come in the form of Germany’s almost-genetic revulsion towards monetary solutions in the face of debt difficulties.

There was very real concern that Europe’s dreadful handling of the crisis might have devastating economic effects around the world.  It was clear, however, that no proper conversation about the crisis could go forward without taking account of the role played by the German Federal Constitutional Court.  This bordered on the bizarre for many of the Americans involved in the discussion.  What does a domestic court have to do with European policy, many wondered.  And for those more sensitive to judicial activism in general, it was a question of the propriety of any role for any court in such high-stakes and highly-technical matters.

“Are you telling me it’s like having the Canadian Supreme Court judge the merits of the Federal Reserve’s policies,” one participant asked.  In a law review article forthcoming in the Virginia Journal of International Law I have done my best to recount—and dogmatically account for—the Court’s long tradition of closely supervising the German constitutional validity of Germany’s participation in the project of European integration.  But as I described the Court’s most recent European jurisprudence to the group, particularly its “yes…but” rulings in the EFSF Case and the ESM Temporary Injunction Case, the disbelief turned to disdain.  One prominent participant in the discussion groused:  “Those wimps in Karlsruhe should just get out of the way.”  It was a sentiment shared by others in Washington who were much more closely involved in managing the Eurozone’s sovereign debt and banking crisis.

Referring to the justices of Germany’s Federal Constitutional Court as “wimps” is tactless.  And it crudely misapprehends the Court’s courageous legacy, immense power, and global prestige.  But in the context of its European jurisprudence it might seem justified.  With respect to the constitutional parameters of Germany’s participation in the project of European integration, it is fair to say that the Court’s jurisprudence has been ambivalent at best.  In the early years it was characterized by the indecisive phrase “so long as.”  And lately, as I noted above, it has pursued its tentative “yes … but” approach. Some have characterized the latter as the Court’s “so … what” decisions.  Considering the enormous importance of the questions, it is not altogether redemptive to note that the Court is only trying to navigate the Basic Law’s seemingly contradictory demands regarding European integration.  On one hand, the Basic Law mandates German participation in European unity.  On the other hand, it preserves for eternity a fundamental core of constitutional values within the framework of the German state.  Despite this textual double-bind, the sentiment at the heart of that particular American’s macho jab at the Court is that the Court should stop dithering:  it should get involved decisively … or not get involved at all.

The decision of the Second Senate in the OMT Case, published last Friday, is the Constitutional Court’s resounding response to that criticism.  The Court came out swinging.

For years the Court has been saying that the German Parliament must play its democratic role in legitimating new measures that lead to deeper European integration.  Here it has said that the Parliament’s failure to do so (as well as the Federal Government’s failure to do so) likely constitutes a violation of the Basic Law.

For years the Court has been saying there are outer-limits on the extent of Germany’s participation in European integration and that those limits are demarcated by the twin boundaries of Germany’s constitutional identity and the concrete parameters of European authority established by the Member States in the Treaties.  Here it has said that the European Central Bank’s OMT program likely constitutes a violation of Germany’s constitutional identity and the Treaties.

And finally, for years the Court has been cautiously managing its relationship with the Court of Justice for the European Union (CJEU).  Always respectful, the Constitutional Court has conceded the CJEU’s supremacy in European legal matters even as the CJEU was declaring the supremacy of European law over domestic law.  Fearful of doing harm to the always-fragile European project, the proud Constitutional Court has not sought to flex its muscle in this “dialogue” between two powerful courts.  Here, however, the Constitutional Court has backed the CJEU up against the ropes with its substantive conclusions and, in a provocative referral of the case to the European Court, it has challenged the CJEU to explain why the measures proposed by the European Central Bank are not a violation of European primary law.  If the CJEU cannot do so—perhaps if it is not able to do so to the Constitutional Court’s satisfaction—then the Second Senate has made its position clear:  this is the end of its decades-long rope-a-dope; this is the end of “so long as” and “yes … but.”

Friday’s decision, affirmatively finding violations of the Treaties and the German Basic Law and daring the CJEU to disagree, reads like a knock-out punch.

Suggested Citation: Russell A. Miller, The “Rumble in Karlsruhe”:  The German Federal Constitutional Court’s Historic OMT Case (February 7, 2014), Int’l J. Const. L. Blog, February 11, 2014, available at: http://www.iconnectblog.com/2014/02/the-rumble-in-karlsruhe-the-german-federal-constitutional-courts-historic-omt-case-february-7-2014