Avbelj, Matej

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The Right Question about the FCCUltra Vires DecisionMatej Avbelj 2020-05-06T15:35:16The language of EU law is often dull and incomprehensible, especially in the eyesof its students. The practice of EU law and policy is too often dressed up in theeurospeak of eurocrats, who are more than elevated above the daily problemsand concerns of EU citizens. But sometimes, the EU language and its practice arecolorful and exciting too. Sometimes they draw from the military arsenal. Such wasthe metaphor employed by Barroso, according to whom the application of the nownotorious Art. 7 TEU was a nuclear option. The launch of the procedure containedin it had been thus likened to dropping an atomic bomb on a country. As we know,the bomb has already been thrown twice, and not only is the EU still standing, thenuclear option has so far, unfortunately, also had little effect. If any at all. However,yesterday, in the eyes of many, another nuclear bomb exploded in the EU. It waslaunched from Karlsruhe. The German Federal Constitutional Court (FCC) declaredthe decision of the CJEU in the case C-493/17 (Weiss and others) ultra vires, findingit insufficiently justified and hence objectively arbitrary (nicht nachvollziehbar unddaher objektiv willkürlich).  Let us, encouraged by ‘our friend’ Vladimir, ask: What isto be done?First, we should look at the reactions. These are, at least, twofold. First, there is adomestic, internal German debate about the EU (un)friendliness of the FCC 2ndSenate. As always, the closer you are to the actual decision-makers, the juicier isthe debate. No matter how much me and other outsiders would like to indulge in it,for the lack of socialization in the German legal environment we are, unfortunately,prevented from it. So, on the one hand we can follow the really interesting exchangeon this blog about the German constitutional particularities, while on the otherhand we can also actively seek refuge in our common legal-political space of thesupranational realm. There, in the community of EU lawyers, I hypothesize that theFCC decision will have spurred a typical reaction. It is an affront to the core of EU constitutionalism. In pure legal terms, the FCCdecision violates the grand principle of supremacy. It derogates from the principleof uniform application of EU law. It thus presents an assault on the virtuous law ofintegration, which might be the last fiber that holds the Union together. Furthermore,in broader democratic-political terms, the FCC will be, again, seen as imposingGerman constitutional (and other) values on the Union as a whole. By underminingthe authority of the CJEU and the uniform EU law, FCC provides good reasons,indeed ammunition for its captured counterparts in the constitutionally-backslidingproto-autocratic states. If the FCC can do it, why not also the Polish and theHungarian constitutional courts? Beware of double-standards, right? Finally, theFCC decision comes at a completely inappropriate time, in the midst of a ravagingpandemic, in which the ECB should more than ever do whatever it takes to save- 1 -the Euro and hence the Union. In short, from a particular, maybe mainstreamsupranational perspective, the FCC decision could be seen as an affront to theheart of EU law, carrying profoundly negative rule of law, democratic, political andeconomic implications for the fate of the Union.I have never been convinced by this mainstream supranational, supremacist,monist conception of the European Union. In the protracted debate on the, so farbasically just theoretical, constitutional conflicts in the EU, I have instead beenwon over by Neil MacCormick’s argument, made at the occasion of the Maastricht-Urteil, that the constitutional practice of the ‘defiant’ national constitutional courtsindeed has “a sound basis in legal theory.” This theory has since been known asconstitutional pluralism. Accordingly, the European Union is a pluralist legal andpolitical community. In legal terms, it consists of a plurality of 28 autonomous legalorders: 27 national territorial legal orders and a supranational functional one. Thisplurality builds pluralism through a dense network of structural principles, whichmake possible and facilitate the functioning of the pluralist EU legal order as awhole. Among those principles, the main role is played by the relational principleof primacy, which should not be equated with supremacy, that dictates how theconflicts between EU law and national law should be resolved, shall they arise. Inprinciple, in such conflicts the EU law should be applied, while the contraveningnational law should be disapplied. This principle has exceptions, both national,as the FCC decision now demonstrates (but recall also Ajos, Landtova), but alsosupranational (recall Taricco II). As a matter of constitutional pluralism, which Iregard as the most accurate descriptive account of the present EU legal and politicalstructure, the ‘nuclear’ decision of the FCC is thus nothing peculiar, rather it is aninbuilt systemic feature. Something to be reckoned with and scrutinized closely,whether it passes the normative requirements of the very theoretical premise onwhich it is based. However, this is not what this post will eventually finish with. Its argument is thatinstead of re-opening the old debate on the merits and demerits of constitutionalpluralism, using the example of the FCC decision, this decision should be actuallytaken up as an opportunity to concentrate on another systemic feature of the EUconstitutional governance. The decision of the FCC is not a sign that we have aproblem with constitutional pluralism in Europe – the decision is a confirmation of theEU’s pluralist character – but the ruling warns us that we have a major constitutionalproblem with the constitutional role of the ECB. In a nutshell, in a context dependingmanner, in an ad-hoc improvised fight against the financial and economic crisis,in which the hybrid national-supranational political process has been unable todeliver in fiscal terms to save the European economy, to ensure its viability, this rolehas been taken up by the ECB. In other words, fiscal means and objectives havebeen monetarized. In doing whatever is necessary to save the Euro, the Draghiagenda was successful and we are now reaping its benefits, luckily so, even duringthe Covid19 natural disaster. However, in a constitutional democracy, which is, toparaphrase Habermas, a paradoxical union of contradictory principles: rule of lawand democracy, both of these principles need to be respected, including by theECB. The ECB can do whatever is necessary only within the confines of the rule oflaw. Hence the requirement of proportionality that the FCC built its present decision- 2 -on. But, on the other hand, the fiscal policy, which has always been at the heart ofevery democratic contestation (no taxation without representation), cannot be simplymonetarized, taken over by stealth (even out of necessity) by the independent andentirely democratically unaccountable ECB. In so doing, by way of monetarizingfiscal policy on the EU level, the supranational and national democratic processesare further emptied out, and can be essentially stripped of their essence, to beeventually conducted in Frankfurt.So, what is to be done? Rather than defending the (anyhow inexistent) supremacyof EU law against the assaults of an unruly 2nd Senate, we should concentrate onestablishing the veritable fiscal union on the supranational level and ensuring itsdemocratic underpinning. If the EU fiscal union existed and if it was based on ameaningful EU budget, legitimated by a vibrant EU democracy, there would be no,or much less, need of ECB venturing with its monetary mechanisms into fiscal andhence democratic domains, for which it is neither competent nor accountable. Also,the EU institutions would be relieved of a pressure of stretching the relevant Treatyprovisions beyond recognition, just because that is ‘necessary’. The Covid19 stress-test could be used as a trigger for the incremental establishment of the EU fiscalunion. The FCC decision, too, could be another impetus for it.At the same time,  the FCC ‘rebellion’ should be taken seriously by the Court inLuxembourg, which should – particularly in the context sketched above –reconsiderits lax and deferential scrutiny of the ECB. The latter has in recent years acquiredgreat powers, which have not been matched with a great (judicially) enforcedresponsibility. To the contrary, to defend the independence of the ECB, the CJEU inthe Rimsevics case even went as far as invalidating national laws, breaching its owndogma of mutually recognized autonomy of national and supranational legal orders.And the Court will soon face another case, in which it will deliver a judgment onwhether the ECB, despite its massive constitutional powers in the EU economic legalorder, can indeed avail itself of the broad privileges and immunities typically grantedto the fragile international organizations and their institutions. In short, beyond theobvious question of judicial constitutional conflicts in the EU, much more importantquestions lurk. It is them that should really merit our attention.- 3 -

The Right Question about the FCC Ultra Vires Decision

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The Right Question about the FCC Ultra Vires Decision

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