Germany is allowed to participate in the European Union’s Corona Aid Fund. The Federal Constitutional Court in Karlsruhe rejected two constitutional complaints on Tuesday. Although it formulated “weighty concerns”, it did not see any violation of fundamental rights as a result.
The European Union’s competences have not obviously been exceeded, nor has the Bundestag’s budgetary responsibility been impaired, it said. The complainants were not violated in their right to democratic self-determination.
The complaints were directed against the “Next Generation EU” reconstruction fund, which the European heads of state and government want to use to cushion the consequences of the pandemic. In the so-called own funds resolution, they exceptionally authorized the EU Commission to raise 750 billion euros on the capital markets – at 2018 prices – and to pass them on to the member states as grants or loans for a specific purpose. The EU countries are jointly liable for the repayment. The Bundestag and Bundesrat agreed in March 2021.
German participation was lamented
On the other hand, both the “Bündnis Bürgerwille” (Bündnis Bürgerwille) around the former AfD boss Bernd Lucke and the entrepreneur and former President of Industry Heinrich Weiss moved to Karlsruhe. They argued that the EU should not incur any debt of its own. Above all, they feared that the corona fund could be the start of a “debt union” with permanent joint liability – that Germany might at some point have to pay for the debts of all other EU countries.
The court does not see this danger: There is no permanent mechanism here by which Germany is liable for the decisions of other states, it explained. In addition, the Bundestag has the opportunity to influence the federal government. It is ensured that Parliament has sufficient influence on the handling of the funds made available.
The judges emphasized that the Bundestag should monitor the use of the funds and the development of the liability risk and take countermeasures if necessary. The EU treaties prohibit one state from being liable for the debts of another. Karlsruhe does not consider it obvious, but also not impossible, that this ban can be temporarily circumvented.
The court explained that many EU countries had excessively high debt ratios. Should the EU budget not be sufficient to pay off the debt, the Commission could, as a last resort, require member states to make money available on an interim basis. But that would only be temporary and would not mean that Germany would have to take on the debts of other member states.
Italy and Spain receive the largest sum
Despite some concerns, the court sees the reconstruction program as covered by the EU contracts, since the money raised may only be used to deal with the Corona crisis. It is therefore strictly earmarked, and the program is also limited and limited in time.
EU law could be violated in individual budget years if the credit authorization was larger than the EU budget, the court explained. That was the case this year and last year. When looking at the EU’s multi-year budget, however, things look different: between 2023 and 2026 significantly fewer loans will be taken out. The financial framework for the years 2021 to 2027 comprises a total of 1.074 trillion euros.
The verdict was not unanimous. Judge Peter Müller felt “unable to support this decision” and formulated a dissenting dissenting opinion. Large loans would become an almost equivalent second pillar alongside the actual EU budget, he argued. This could indicate that a “fundamental change in the financial architecture” of the EU is at stake. Müller criticized that his colleagues had left crucial questions unanswered.
The first funds from the corona fund were paid out in the summer of 2021. At least 37 percent of the money must be invested in climate protection measures and 20 percent in digitization. Most of it goes to Italy and Spain, two countries particularly hard hit by the pandemic. (by Sarah Maria Brech, AFP)
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Source: Tagesspiegel
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