German court backs lawmakers' input on euro crisis

AP News
Posted: Jun 19, 2012 7:25 AM
German court backs lawmakers' input on euro crisis

Germany's highest court reaffirmed the German Parliament's right to be heard on the European financial crisis, ruling Tuesday that Chancellor Angela Merkel's government failed to tell lawmakers early enough about plans for the eurozone's permanent rescue fund.

The Federal Constitutional Court upheld a complaint by the opposition Green party, which has said it had to get details about the European governments' decisions on the European Stability Mechanism from its sister party in Austria.

The decision has no bearing on the future of the (EURO)500 billion ($632 billion) ESM itself, which Parliament is expected to approve next week in time for it to start work in July.

But the court made clear that in future, Parliament must have "early and effective influence" on the decision-making process before binding decisions are made by the government.

The ruling is the latest of several that have strengthened parliamentary rights, illustrating Germany's struggle to balance quick decision-making in a fast-moving crisis with cross-party demands for democratic accountability. Bailing out debt-laden fellow members of the 17-nation eurozone isn't popular in Germany, Europe's biggest economy.

Chief Justice Andreas Vosskuhle acknowledged some argue that parliamentary participation can be counterproductive, and "one must certainly take this argument seriously."

"Democracy has its price," he said. "But to skimp on it could be very expensive."

The Greens' chief whip in Parliament, Volker Beck, called it "a good day for democracy in Germany and Europe."

Tuesday's ruling hinged on an article in the German constitution stipulating that Parliament "shall participate in matters concerning the European Union" and that the government must keep it informed "comprehensively and at the earliest possible time."

At a court hearing in November, the government disputed whether the ESM was in fact an EU matter, an argument the judges rejected.

The court already has moved to safeguard Parliament's oversight of the German budget, ruling last year that it must endorse all decisions on using the eurozone's existing temporary rescue fund, the (EURO)440 billion ($590 billion) European Financial Stability Facility.

It then limited the powers of a special nine-member parliamentary panel set up to make quick decisions on using the fund, ruling that it can decide only on particularly sensitive bond purchases.

The court's likely objections to watering down Germany's control of its own finances are frequently mentioned by officials as a major problem with proposals for jointly issued government debt, or eurobonds _ which the government in any case opposes fiercely.

There's been a rising clamor from outside Germany for Berlin to give up its resistance to the idea, which would lower struggling countries' borrowing costs and likely raise Germany's _ but experts believe the supreme court would likely block the move.