How Germany’s Constitutional Court jump-started the Franco-German engine

By defining legal limits, the Constitutional Court has forced the German government to reconsider its European policy – to make political decisions on Europe where it has the power to do so.

Also available in

They had been waiting for decades for this to happen in France. Germany has agreed to mutualised European debt in a Franco-German proposal for a European Recovery Fund. “Given the exceptional nature of the challenge” posed by the coronavirus crisis, the proposal says, the European Union should borrow €500 billion as part of its next Multiannual Financial Framework and hand this out as grants – not loans – to member states whose economies were hit particularly hard by the crisis.

Germany’s concessions this week not only demonstrate that, while heated rhetoric about a lack of solidarity is often directed against Germany, the country is not the big obstacle to greater financial solidarity in this crisis that many thought. In strategic terms, Germany’s recent concessions are also a direct result of a ruling by its Federal Constitutional Court in early May on a bond-buying programme that the European Central Bank (ECB) launched in 2014. The court’s verdict not only created difficulties for the entire European legal system but also ran the risk of blocking the federal government’s last resort in European policy – and this became a great opportunity for Europe.

How so?

Germany was once known for tearing down walls, especially those in European politics. But, lately, Germans have found themselves completely walled in on European policy: they cannot go backwards or forwards – and even escape to one side, through the ECB, is no longer possible.

Much has been said in recent years about the lack of vision in Germany’s European policy. Even when French President Emmanuel Macron presented his vision for the future of Europe and invited Germany to participate in it (or to present its own vision for that matter), Berlin was not particularly committed. There was the Franco-German Treaty of Aachen, but it did not change much. Having run into a void and become frustrated with European politics, Macron took a different direction a few months ago – and became less close to Germany.

It is true that Berlin’s immobility can be explained by the fact that, for many years, people in Germany were particularly comfortable with the status quo in Europe. While other member states increasingly questioned the European Union’s impact on their prosperity, Germany remained exceptionally well off.

But, mostly, Germany has been subject to three structural constraints that confine its European policy to muddling through and preserving the status quo.

While Berlin was the only one in a position to decide upon Europe’s future, Berlin was not in a position to decide upon Europe’s future.

Firstly, there is public opinion. The mutualisation of debt, redistribution between European economies, and European integration are not particularly high on Germans’ agenda. Even before the coronavirus crisis, members of the Christian Democratic Union argued that, if the party’s position on issues related to the eurozone were to change, one might as well put in place a direct “support programme” for the far-right Alternative for Germany.

Secondly, there is legal jurisdiction. If Europe were to complete the monetary union with a fiscal union and common bonds – as would make sense economically (for stability) and strategically (for the international role of the euro) – these structures would quickly clash with German constitutional law. The Bundestag’s budget law is at the core of German sovereignty. Even before its ruling on the ECB bond-buying programme, the Constitutional Court had made clear that Germany’s Basic Law imposes limits on the country’s European policy. Nobody in Germany wants a discussion about a new constitution. And there are also major hurdles in European law: due to the political divisions between and within them, member states have decided not to amend EU treaties. To do otherwise would be to risk one or another member state, or its population, voting against treaty change – which would trigger an even greater crisis in the EU.

There is a third constraint, though, in Germans’ key lesson of the second world war: Germany’s “never again” to genocide and wars of aggression also means “never alone again”. The perception of Germany’s Europe policies in France, Italy, Poland, and elsewhere matters. If the status quo is beneficial for Germany but the EU is eroding and even France is turning its back a little, Germany must act – for both Europe’s good and its own.

So, Germany’s European policy had been walled in for years – neither more Europe nor less was possible. While Berlin was the only one in a position to decide upon Europe’s future, Berlin was not in a position to decide upon Europe’s future.

The chancellor had a last resort: the ECB, which allowed her to escape the structural constraints. The ECB became the saviour of the eurozone because, by buying government bonds, it compensated as much as was possible for the German political vacuum and the EU’s lack of fiscal policy. The structure of the eurozone has always been strange. Mario Draghi, the former ECB president, is said to have repeatedly reminded European leaders that, ultimately, the euro crisis will require a political solution – not just the help of the central bank. But a political solution seemed impossible for Germany, whose European policy was stuck. The more apolitical the solution, the better – for the reasons discussed above.

But the Constitutional Court has now blocked this way out to a certain degree. One of the political consequences of the recent ruling is that the ECB is being restricted in its function as the saviour of Europe, and in its capacity to resolve the trilemma Germany faces in its European policy. According to the Constitutional Court, the ECB should increasingly consider the proportionality of its monetary policy measures. The ECB’s flexibility will also be limited by the fact that no single member state’s bonds may account for more than one-third of the total volume – and that bond purchases must be based on national central banks’ share of capital in the ECB. Even if it is not fundamentally unconstitutional under German law, the bond-purchase programme will be significantly restricted in the reassuring signals it sends to financial markets. Draghi’s famous statement that the ECB would do “whatever it takes” to preserve the euro, which stabilised the eurozone, is no longer as clear as it once was.

The ECB has the opportunity to justify the programme within three months, as requested by the German court. But the bigger meaning of the ruling is that, following the Constitutional Court’s verdict, Germany will either become an immobile obstacle to Europe or find the courage to tear down some of the walls that restrict its European policy. If it remains immobile, the “never alone again” mantra and Germany’s strategic interest in maintaining the stability of the EU could increasingly come under threat. Alternately, it will have to reconsider at least part of the legal framework (the EU’s treaties) or German public opinion will have to change. And herein lies the opportunity the ruling presents: by defining some of the boundaries of European law, the Constitutional Court has forced the German government to reconsider its European policy – to make political decisions on Europe where it has the power to do so. Accordingly, Germany should be open to EU treaty changes or launch a major political debate on the future of Europe – lest its immobility becomes unbearable for itself.

Chancellor Angela Merkel seems to understand the strategic situation. In the Bundestag last week, she said that the EU governments should in the future provide relief to the ECB by taking on greater responsibility for European policy; that there should be greater integration of the eurozone; that treaty changes are not taboo; and that the euro should have more weight globally. And then came her big announcement with the French president on Monday: €500 billion in mutualised debt for European economic assistance. 

Is this the revolution in Germany’s European policy France has awaited for decades, as the French media have been suggesting? It doesn’t look that way. Rather, Merkel is creating just a little more room for manoeuvre in Berlin’s completely stuck European policy, instead of answering larger strategic questions. Soon, this may no longer be enough, given Germany’s strategic interest in maintaining stability and prosperity in Europe.

An earlier version of this article appeared in Le Monde.

The European Council on Foreign Relations does not take collective positions. ECFR publications only represent the views of their individual authors.


ECFR Alumni · Policy Fellow

Subscribe to our weekly newsletter

We will store your email address and gather analytics on how you interact with our mailings. You can unsubscribe or opt-out at any time. Find out more in our privacy notice.