In the traditional context (as outlined in Chapter III C 3), control over the budget al- lowed the parliament to control a monarch’s activities in a rather literal sense: without the power to raise the money necessary e.g. to raise an army and to pay for weapons, it was impossible for the monarch to wage war. The ultimate control over war and peace was thus – in a practical and very real sense – in the hands of the parliament. Even though things have changed since then – and with them the reasons as to why the parliament (and not the government) has ultimate control over the budget, it is still considered to be one of the most crucial powers a parliament may possess: with- out money, a government would find it impossible to implement the policies it had de- cided on. Controlling the money gave the parliament the necessary leverage to exer- cise effective control over the government’s activities. This is one of the reasons why – as the Bundesverfassungsgericht itself stresses – the annual plenary session on the budget is traditionally used as a general review of the government’s policies, especially by the opposition.504
Like many other constitutions, the Grundgesetz allocates ultimate decision-making power over public spending to the national parliament, specifically the Bundestag. As was demonstrated in Chapter III, this allows the parliament considerable influence over the government’s policy decisions in the domestic context; even more so in the hands of the opposition and in particular when it becomes the subject matter of an enquiry committee: the Bundesverfassungsgericht has repeatedly strengthened the right of the Bundestag to have extensive access to government files and with it the
level of practical control the Bundestag may exercise over the government. Overall, its budgetary responsibilities enable the legislative to provide an effective check on the executive’s powers.
The Court defined the budgetary/ fiscal control exercised by the Bundestag as a crucial element in a state’s democratic process: as the Court highlighted in the Lisbon deci- sion, it was not just a question of sovereignty or a limit to integration for its own sake:
“… Die Hoheit über den Haushalt ist der Ort konzeptioneller politischer Ent- scheidungen über den Zusammenhang von wirtschaftlichen Belastungen und staatlich gewährten Vergünstigungen. …”
“… Budget sovereignty is the place of conceptual political deci- sions on the connection of eco- nomic burdens and privileges granted by the state. …”505
In other words: budgetary autonomy and manoeuvrability were crucial to democratic self-determination and part of the constitutional core identity - without control over their ‘purse strings’, the Member States would no longer be able to shape the lives of their citizens in a truly independent fashion.
The ESM cases presented the Court with an opportunity to elaborate on scope and lim- its of this ‘budget sovereignty’ as well as the Bundestag’s role in protecting it within the European integration process. The judges recalled their by now traditional reason- ing developed in the decisions on the Maastricht and the Lisbon treaty that the notions of sovereignty and democracy as embodied in the Grundgesetz required that the Ger- man people as the sovereign needed to stay in ultimate control of what happened in the German state. This meant that their elected representatives in the Bundestag did not have the right to render themselves powerless and thus incapable of fulfilling the very role the people had elected them for – to exercise its sovereign power in its stead. In this respect, the present cases remained on familiar ground: in the Maastricht and Lisbon decisions, this line of argument had led to a review of the transfer of legislative
505
BVerfG, ‘Lissabon’ (n 38) 256. Quoted after the official English translation available
<http://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2009/06/es20090630_2
bve000208en.html;jsessionid=B37C4C4FC23468852118AC04BA8BBEF6.2_cid393> accessed 15 April
competences for its impact on the power the Bundestag could still effectively wield, i.e. the legal consequences of membership in the EU. The ESM cases saw the same log- ic applied to factual financial obligations and in light of the potential consequences, the Court considered the undertaking of financial obligations capable of limiting a coun- try’s independence just as much as legal obligations when it came to the ability of the German parliament to shape German affairs independently.506 The control of the Member States over their budget not only in a formalistic sense, but in terms of actual financial manoeuvrability, was essential to preserve the Member States’ independence and a crucial tool for controlling the government. Hence, the parliament needed to re- tain actual decision-making power throughout – as regards treaty content, ratification and subsequent implementation. The parliament as the directly elected representative of the people had to control public spending – and thus the government. If it could not do so – because the money was spent on someone else’s say-so (here the ESM council or another Member State), then democratic self-determination was impossible.
This is in stark contrast to the situation in the area of traditional Foreign Affairs. The fact that a treaty may lead to (considerable) financial obligations for Germany is not a factor that would limit the government’s exclusive power to negotiate and conclude the treaty in question. As illustrated in Chapter IV, Germany’s membership in the IMF, the World Bank or NATO did not cause concerns in terms of the incurred financial obli- gations. Taking NATO as an example: the government’s agreement in the NATO Coun- cil to support a distinctive change in NATO’s military policy could have led to Germany having to increase its defence budget considerably. If one were to apply the line of thought developed in the ESM cases to this situation, the result would have been that the Bundesregierung should not have agreed to that change without prior approval of the Bundestag due to the substantive effects on Germany’s financial resources. How- ever, as was outlined in Chapter IV, the Court did not even consider the financial impli-
cations of that decision but simply considered it to be part of the ‘normal’ Foreign Af- fairs activities conducted by the executive.507
The same held true so far for the EC and the EU in general: the fact that Germany has been a net-contributor to the European budget for decades did not seem to worry the
Bundesverfassungsgericht. In its evaluation of the establishment of the currency union
in the Maastricht decision, the Court focused on how many competences, in other words how much legal decision-making power, would be transferred to the European level. To the Court, the crucial point was apparently not how the obligations undertak- en by the members of the currency union to maintain a stable budget and limit their national debts would impact on Germany financial manoeuvrability. Rather, the Court focused on whether a progressive transfer of competences could end up disempower- ing the German parliament to such an extent that it was no longer capable of effective- ly representing the interests of the German people.508
While the arguments in the ESM cases are employed vis-à-vis the European level, i.e. with a view as to how much ‘Europeanization’ of Germany’s budget was constitutional, the language used also hints at the use of the doctrine of separation of powers: the po-
litical responsibility for the budget is considered to be part of the ‘core’ of the legisla-
tive’s power509 – part of its very essence. The Bundesverfassungsgericht highlights how it is part of the crucial control powers the legislative has over the executive. These lines of argument strongly remind one of how the Court delineated the relationship be- tween the executive and the legislative in the domestic context (cf. Chapter III): it es- tablished for each power certain core areas, competences and activities which were protected against interference from the other powers or in turn used to allow each power to control the other two. For example, in the present context the right of the
Bundestag to decide on the national budget (Article 110) was seen not just as a simple
allocation of competences to certain institutions but as the expression of a constitu-
507 BVerfG, ‘NATO-Konzept’ (n 368). 508
BVerfG, ‘Maastricht’ (n 38).
509
Hopfauf (n 233) 68; Bernhard Brockmeyer, ‘Artikel 110’ in Bruno Schmidt-Bleibtreu, Hans Hofmann and Axel Hopfauf (eds), Kommentar zum Grundgesetz (12th edn, Carl Heymanns Verlag 2011) para 8b.
tional principle – the notion that it is in the Bundestag where financial decisions are made. This ‘locus’ of decision-making had to be maintained even within the ‘intergov-
ernmental system of governance’510 that the EU currently represents. Hence, the Court reasoned, the Bundestag had to be given the power to make the actual decision on the release of funds within the ESM/EFSF framework.
Unlike with the competence transfer where the government leads not only on the ne- gotiations about the amendment treaty, but also afterwards when it comes to the formulation and vote on European legislation in the Council, here the Court requires that the parliament is involved in the treaty negotiations prior to ratification as well as retains control over individual decisions afterwards. That latter part is indeed very ‘new’ and could potentially alter the relationship between the Bundestag and the Bun-
desregierung in a fundamental manner (cf. further Subsection 2 below).
As the Court clarifies, the Grundgesetz places this responsibility as a matter of principle on the Bundestag as a whole.511 It therefore firmly rejected the proposal from the budget committee – tabled by its majority a.k.a. the Bundesregierung – to transfer most of the actual decision-making power away from the plenum to the budget com- mittee or an even smaller group of MPs in its decision of February 2012.512 Interesting- ly, on the surface, this case dealt with complaints from individual MPs about how the
Bundestag organises its internal committee structures as expressed in the decisions by
the majority of the House. The arguments revolved around the rights of the Bundestag as an institution to organise its own work, of individual MPs to participate in that work, etc. And even though the Bundesregierung joined the proceedings on the side of the
Bundestag, its position or influence does not seem to factor into the assessment: the
political reality that the majority of the respondent institution – the Bundestag – is in fact controlled by the government is not acknowledged by the Court in an express fashion. However, reading between the lines of this case, the Court’s arguments send a clear signal to the government that the Bundestag’s budgetary responsibility cannot be
510
BVerfG, ‘ESM/ Fiscal Treaty (Injunction)’ (n 468) 211; BVerfG, ‘ESM/ Fiscal Treaty (Main Action)’ (n 496) 122, 161.
511
BVerfG, ‘Participation of the Bundestag (EFSF)’ (n 445).
circumvented by making use of the institution’s internal organisational structures. For example, the Court rejected the argument made by the government that all of the de- cisions concerning the ESM related to Foreign Affairs and were highly political in na- ture and therefore should be decided by a committee and not the plenum. Instead, the Court recalled the reasons that the budget is deliberated and voted on in the plenum and had no compunction to apply the same line of thought to decisions relating not to domestic, but European affairs, specifically the ESM/EFSF framework. The underlying reasoning seems to be that decisions on financial matters affect all citizens and need to be debated in the public forum ‘Bundestag’. Whether it concerns the national defence budget, social benefits or indeed ESM funding, the Parliament as a whole has a right to share in the decision.
Related to the political tension outlined above is another issue: like in its previous EU cases, the ESM cases see the Court refer to the ‘parliament’ as an institution or to the ‘Gesetzgeber’/ the ‘legislator’ as a power to be the one that bears the political respon- sibility for the decision on competence transfers (cf. especially the Lisbon decision) or – as in this case – the decision whether Germany should undertake the financial obliga- tions in question. The decisions of September 2011 and March 2014 make it very clear: the Court expressly points to the political prerogative of the Parliament to assess whether the national budget could retain its autonomy in light of the amounts in- volved. However, as the decision of June 2012 makes abundantly clear, it was precisely
not the ‘parliament’ who negotiated the details of the EFSF, the ESM or the Fiscal Trea-
ty. Not only did the government keep the parliament out of the loop, it withheld vital information from the parliament until all decisions had been finalised at European lev- el. All the Parliament actually got to decide was whether to ratify the treaties put be- fore it. Considering that the Bundestag is dominated by a government who currently513 holds an 80% majority in that house and that the situation was so politically charged that a NO vote was only a theoretical option, it turned the parliament’s power to con- trol the actions of the government as intended by the Grundgesetz on its head and the
vote into little more than a ‘tick-box’ exercise. This gives the impression that the Court seems to ignore the political reality that the majority in the Bundestag is controlled by the Bundesregierung. An argument in favour of Court’s approach could be that from its perspective the government is after all deemed in charge of Foreign Affairs, so it should be able to realise its political agenda effectively – using the fact that it controls the majority in the Bundestag is therefore a means to ensure that the legislative can- not undermine the executive in one of its core activities. However, the retreat behind a rather formalistic view of checking that the correct ‘institution’ took the required deci- sion – without expressly acknowledging the political composition of that institution or the implications of the fact that in Germany’s parliamentary democracy that institution is controlled by another power – considerably diminishes the nature and amount of democratic legitimacy a vote in the Bundestag is able to provide.
The overall result of this reasoning is that it burdens the Bundestag with the political responsibility vis-a-vis the people for decisions that it had no factual control over. This is in rather jarring contrast to the Court’s stance in one of its earliest cases on the doc- trine of separation of powers where it established that the executive could not be de- prived of certain powers without this leading to a situation where it was responsible for decisions it had no control over.514 At that time, the Court considered this to be a violation of the principle of separation of powers as enshrined in the Grundgesetz.515 This begs the question why arguments made in favour of the executive do not seem to apply to the legislative when it finds itself in a similar situation. The pattern identified in Chapter III can again be seen here: the Court uses the principle of democracy to de- fine the Bundestag’s role within the institutional setup and then sets the principle of separation of powers against it to protect the executive. The decision of June 2012 is a case in point: the further rights of the Bundestag under Article 23 (2) are justified by reference to the principle of democracy and then limited by the government’s right to protect the confidentiality of its internal decision-making processes with reference to the principle of separation of powers.
514
BVerfG, ‘Bremer Personalvertretung’ (n 235).