Blog Post

Is Germany heading towards a referendum?

The question of the compatibility of the German constitution (officially known as the Basic Law), with further European integration is at the origin of current debates in Germany.  The Federal Constitutional Court (FCC) will decide in September on whether the European Stability Mechanism (ESM) exceeds the limits of the Basic Law. Meanwhile, a debate on holding a referendum in Germany on the future of the EU and new EU treaties emerges. This column summarizes the discussion.

By: Date: October 10, 2012 Topic: European Macroeconomics & Governance

The question of the compatibility of the German constitution (officially known as the Basic Law), with further European integration is at the origin of current debates in Germany. The Federal Constitutional Court (FCC) will decide in September on whether the European Stability Mechanism (ESM) exceeds the limits of the Basic Law. Meanwhile, a debate on holding a referendum in Germany on the future of the EU and new EU treaties emerges. This column summarizes the discussion.

First, there is a debate about the constitutionality of the ESM. The FCC will decide on 12 September 2012 on whether the ESM may exceed the limits of the Basic Law. This is notably due to the organisational structure of the ESM: its Board of Governors comprised of the euro area’s finance ministers would take all major decisions (except of changing the authorised capital stock of the ESM according to Article 10 ESM treaty). In urgent cases, according to Article 4 (4) ESM treaty, decisions can be taken using an emergency voting procedure that requires a qualified majority representing 85% of the ESM’s capital shares (instead of an unanimous vote of the members participating in the vote). The Board’s decisions would have an impact on the German budget, which could subsequently undermine sovereign rights of the Bundestag. German law professor Franz Mayer explains that “in the context of democracy, it is in particular the budgetary rights of the German parliament that they consider to be infringed upon. […]The mere size of the entire endeavour is endangering the leeway of the German parliaments and its budgetary freedom.”

German Law Professor Stefan Homburg, who advises the plaintiffs against the ESM, writes in the FAZ on constitutional doubts regarding the ESM treaty. According to his analysis, Articles 34 and 35 ESM treaty about professional secrecy and immunities of persons risk to remove democratic accountability from the governors. Thus, in conjunction with Article 32 ESM treaty that prevents control by inter alia (Article 32 (5)) declaring “the archives of the ESM and all documents belonging to the ESM or held by it” inviolable, Homburg sees very significant risks undermining basic democratic structures.

Decisions of the ESM Board could only be democratically legitimated if they would need the approval of national parliaments. The German law accompanying the ESM treaty, the “ESM-Finanzierungsgesetz”, aims at ensuring the democratic basis by obliging German members of the Board to refuse decisions with impact on the German budget and that have not been accredited by the Bundestag. However, according to Professor Dietrich Murswiek, this is legally not enforceable. 

Such a judgment of the FCC could necessitate a constitutional change, either by referendum or by Article 23 Basic Law in conjunction with Article 79 (2) and (3) Basic Law.
The possibility of holding a referendum is explicitly foreseen for the reorganisation of federal territory (e.g. the referendum to merge Berlin and Brandenburg proposed in 1995) or for a replacement of the Basic Law. The second case is regulated by Article 146 GG, which stipulates that the current Basic Law “shall cease to apply on the day on which a Basic Law freely adopted by the German people takes effect.”

A second debate goes beyond the constitutionality of the ESM and focuses on general limits of the Basic Law in the context of further European integration.  Article 110 Basic Law generally states that all revenues and expenditures must be included in the national budget. However, Article 23 Basic Law implies the possibility of transferring sovereign rights to EU level provided that the Federal government enacts a law. For such a law, Article 23 Basic Law refers to Article 79 (2) and (3) Basic Law, which require that this law must be approved with majority of 2/3 of all votes in both Bundestag and Bundesrat.

The debate did not emerge recently. In September 2011, Andreas Voßkuhle, President of the FCC, told the FAZ that there was not a lot of margin left in the Basic Law to transfer sovereign rights to the EU. Only a new Basic Law voted by referendum could render further integration possible.  
In July 2012, Federal Minister of Finance, Wolfgang Schäuble, according to the FAZ, says that given the necessary further political European integration a new Basic Law may already be voted by referendum in a few years. Minister of Labour and Social Affairs Ursula von der Leyen, on the other hand, argues against proposals for a referendum on the Basic Law and further European integration. The Basic Law would not become obsolete in the context of further integration. There “is still a lot of margin.”

The Bavarian Minister-President Horst Seehofer wants an amendment of the Basic Law to include referendums. He told the Welt that for further integration the people must be consulted in three areas: the transfer of rights to Brussels, the adhesion of further countries to the EU and the decision on German financial aid to other EU states including debt mutualisation. “We should include such forms of plebiscites in the Basic Law; we need to involve more people”. Europe cannot remain a project of the elite. “We can overcome the crisis of legitimacy and trust towards the European institutions only with more transparency and citizen participation.” 

The third debate goes beyond the ESM and limits of the Basic law by calling for new EU treaties with much more transfer of sovereign rights to the EU. Habermas et al. denounce a democratic deficit in the current EU landscape.  They are in favour of holding a referendum in Germany in the context of new EU treaties.

“As the representative of the biggest donor country in the European Council, the Federal Republic should take the initiative and table a resolution for summoning a constitutional convention. […]It is not out of the question that the Federal Constitutional Court will seize the initiative from the political parties and announce a plebiscite to amend the constitution. […] A joint initiative backed by the SPD, CDU and Greens to set up a constitutional convention, the results of which could be voted on at the same time as the plebiscite on the constitution (but not before the end of the next parliamentary term), would not then be an unrealistic prospect. This would be the first time that Germany has conducted a public debate of this kind, in which opinions are formed and decisions taken about the different political options for Europe’s future: […]”

Their paper has been published on the official SPD website. According to the Welt, the authors formulated the paper for the discussion about the SPD electoral platform programme for 2013 and SPD leader Sigmar Gabriel, according to euractiv, declared the propositions made there to be part of the official debate on the 2013 SPD programme. The two other SPD candidates for the chancellery, Peer Steinbrück and Peter Steinmeier, are welcoming the proposals made in the paper. It seems that this disappointed the clientele of Steinbrück, as pointed out  in the Handelsblatt as there are already “enough debt politicians”.

In the meantime, a more intense debate about holding a referendum in Germany on the EU emerged. According to the Spiegel, Gabriel, proposes a constitutional change with a subsequent referendum on debt mutualisation with a common budgetary control.
Federal Minister of Justice, Sabine Leutheusser-Schnarrenberger of the Liberal Party (FDP) argues for a European constitution that re-enforces the role of the European Parliament as well as that of each EU citizen. However, she is reluctant regarding referendums: economic issues such as the fiscal pact would not be suited for referendums.
Former Federal Minister of Economy, Rainer Brüderle, said in an interview to the Hamburger Abendblatt that “We might get to a point where a referendum on Europe is necessary. We Liberals have always been for a European Constitution. The further development of the debt crisis will show how much sovereignty EU countries must transfer to EU level.” , and also Guido Westerwelle, German Minister of Foreign Affairs, is in favour of a referendum on the future design of the EU. He told the Bild am Sonntag that he hopes to have one day a “real” European constitution, based on a referendum.

Many columns and points of view point out the dangers of such a referendum, for example the Tagesspiegel, the Hamburger Abendblatt or the Frankfurter Rundschau writing that a referendum can be a “wonderful thing” for democratic self-assurance in quiet times, but that, in the midst of the crisis, this would be the wrong remedy. The Spiegel writes about the possible different possibilities of implementing a referendum in Germany. However, Jens Petermann, Pasquale Pasquino and Christoph Hönnige write on the European  that a ratification of the ESM under the Basic Law is not possible and that only the consent of the constituent power, namely the people, could change it. They say that the aim of the constitutional complaint should be to bring about a constitutional change by referendum and that a decision of the Court would be the only way to lead to it. 


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.


Warning: Invalid argument supplied for foreach() in /home/bruegelo/public_html/wp-content/themes/bruegel/content.php on line 449
View comments
Read article More on this topic More by this author

Podcast

Podcast

The new EU budget and the future of the Spitzenkandidaten process

Bruegel director Guntram Wolff frames the two debates that will dominate the upcoming meeting of the European Council – the shape of the next EU budget, and the method by which a new European Commission president will be appointed.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: February 21, 2018
Read about event More on this topic

Upcoming Event

Feb
27
12:30

Bruegel - Financial Times Forum: The future of euro-area governance

The third event in the Bruegel - Financial Times Forum series will look into the future of euro-area governance.

Speakers: Maria Demertzis, Gideon Rachman, Manfred Weber and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read about event

Upcoming Event

Mar
1
12:30

(How) could European safe assets be constructed?

At this event, we are pleased to host Philip Lane, the Governor of the Central Bank of Ireland, who will present the outcome of the ESRB task force’s investigation on safe assets that he chaired.

Speakers: Levin Holle, Philip Lane, Anne A. Leclercq and Guntram B. Wolff Topic: European Macroeconomics & Governance, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

The exchange rate and inflation in the euro-area: words following facts

The reduced references in the speeches of the President and Vice-president of the ECB to exchange rate changes in assessing inflation developments correspond to a decreased pass-through from the exchange rate to inflation. So, as it should be, words have followed facts

By: Francesco Papadia Topic: European Macroeconomics & Governance Date: February 16, 2018
Read article Download PDF More on this topic

Policy Contribution

Tales from a crisis: diverging narratives of the euro area

Who gets the blame for the crisis? How did narratives of the crisis develop since 2007? The authors of this paper tried to identify the key crisis-related topics in articles from four opinion-forming newspapers in the largest euro-area countries.

By: Henrik Müller, Giuseppe Porcaro and Gerret von Nordheim Topic: European Macroeconomics & Governance Date: February 15, 2018
Read article More on this topic More by this author

Blog Post

Trust in the EU? The key obstacle to reform

The challenges that Europe faces both from within and from outside require immediate, concerted counter-efforts. While efforts to advance the European economic architecture are desirable and useful, can Europe realistically attempt to integrate further on the basis of such little trust?

By: Maria Demertzis Topic: European Macroeconomics & Governance Date: February 9, 2018
Read article More on this topic More by this author

Podcast

Podcast

What the German coalition agreement means for Europe

The final document on the German coalition agreement will have significant consequences for the European Union and the Eurozone. Bruegel director Guntram Wolff gives his assessment of the agreement's key features in this episode of 'The Sound of Economics'

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: February 7, 2018
Read article More on this topic More by this author

Blog Post

What is the financial balance of EU membership for central Europe?

EU membership led to major financial and economic advantages to central European Member States, partly by encouraging foreign investment. Widespread foreign ownership of capital brought many benefits but also resulted in large profits. Since central European governments are doing their utmost to attract even more foreign capital, foreign profit is set to increase further.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: February 6, 2018
Read article More on this topic More by this author

Podcast

Podcast

European Parliament: More representative post-Brexit?

Bruegel director Guntram Wolff features in this episode of 'The Sound of Economics', highlighting how a reallocation of seats in the European Parliament following Brexit provides the opportunity to make the institution more representative of EU citizens.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: February 5, 2018
Read article More on this topic More by this author

Blog Post

Difficulties and opportunities in reallocating European Parliament seats after Brexit

The European Parliament must carefully consider the reallocation of seats after Brexit, allowing for a potential shift in political alignment and working within parameters already agreed with Member States.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: February 5, 2018
Read about event More on this topic

Past Event

Past Event

Europe’s immigration and integration challenges: Financial and labour market dimensions

The event, organised by Bruegel in cooperation with the Institute for International Affairs will discuss these and related questions and will also feature the launch in Rome of the study authored by Zsolt Darvas on the impact and integration of migrants in the European Union.

Speakers: Roberto Ciciani, Zsolt Darvas, Marcela Escobari, Tatiana Esposito, Manjula M. Luthria, Carlo Monticelli, James Politi and Nathalie Tocci Topic: European Macroeconomics & Governance Location: Banca Monte dei Paschi di Siena, Via Mighetti 30/A, Rome, Italy Date: February 2, 2018
Read article More on this topic More by this author

Opinion

Your job description, Mr. Centeno

Here’s how you run the Eurogroup.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: January 30, 2018
Load more posts