CHANCELLOR ANGELA Merkel’s plans for centralised economic governance in the euro zone are “tricky” under the current European treaties and should be put to a referendum in Germany, a constitutional court judge has said.
The claim, by Judge Peter Michael Huber, could create a new political hurdle to the swift implementation of Franco-German proposals for greater EU oversight of fiscal and budgetary affairs.
It follows a Bundesbank claim that, by buying up €145 billion in national sovereign bonds, the European Central Bank has already opened the door to pooled debt or “eurobonds”.
Mr Huber, one of eight judges in the second chamber of Karlsruhe's constitutional court, has told Süddeutsche Zeitungthat euro zone economic governance cannot be permitted if it relieves a member state of "the majority of tasks and competences". On the other hand, European integration has reached a level in which the EU "does not differ greatly from a state".
“If the right to vote is to continue to make sense, then there must be a political object over which the citizen, with his vote, can decide,” said Mr Huber.
Plans for euro zone economic governance touch on competences mentioned explicitly as national competences in the court’s 2009 Lisbon Treaty ruling, he said, such as social welfare and tax affairs.
To transfer these competences beyond the control of the German Bundestag and the oversight of Karlsruhe would, he said, require a constitutional change. Whether this would be done by way of referendum, as he suggested, is an open question: German experiences with such votes in the past – particularly in the Hitler era – have made them an unpopular decision-making tool. Constitutional change in Germany is possible with a two-thirds parliamentary majority.
Meanwhile, Bundesbank president Jens Weidmann has attacked the ECB’s policy of buying sovereign bonds, saying it “blurs the distinction between monetary and financial policy”.
The idea of pooling debt – and the associated risk – is highly controversial and hugely unpopular in Germany. Dr Merkel has ruled out the plan until closer euro zone economic governance has been agreed. But the Bundesbank president, her former economic adviser, has suggested it is already reality.
"If we accept risk onto the books of the eurosystem that means, simultaneously, a redistribution of risk among the taxpayers of individual states," he said. "Of course it is wrong in exceptional circumstances to stick stubbornly to principles, but it is just as wrong to throw a proven principle of monetary policy overboard by declaring a general emergency." ECB interventions on secondary bond markets could be a "bridge to nowhere" and must be scaled back, he tells Der Spiegelthis morning.
Meanwhile, German finance minister Wolfgang Schäuble has stepped up his rhetoric on Greece, saying that Athens “must produce the numbers that show things are according to plan” before they can expect fresh EU/IMF funds.