In a recent publication Cornelia Koch discusses the future of the European integration process in light of a landmark case handed down by the German Constitutional Court in 2009. This case has the potential to influence the future of EU integration for decades. It concerned the compatibility of the EU’s Treaty of Lisbon with the German Constitution. The Court determined that the Constitution sets definitive boundaries to the integration process. After setting the scene, Cornelia’s chapter examines the Court’s Lisbon Treaty Case and the Mangold Case of 2010, which applied the principles developed in the Lisbon Treaty Case. It then reflects on the future of the European project and considers what insights the EU integration process can offer to other, more traditional federal systems like Australia.
Cornelia’s chapter appears in the new book The Future of Australian Federalism: Comparative and Interdisciplinary Perspectives, edited by Gabrielle Appleby, Nicholas Aroney and Thomas John and published by Cambridge University Press (available for purchase online here). The book will be launched by Roger Wilkins AO, the Secretary of the Commonwealth’s Attorney-General’s Department, at the ‘Recent Developments in Constitutional Law’ Conference, 19 – 21 July 2012, Centre for Comparative Constitutional Studies, The University of Melbourne. What follows is a summary version of Cornelia’s chapter.
Introduction – European Integration as an Open-Ended Process
The European integration process which commenced in the 1950s has been regarded as open-ended because there is no political consensus between participants on its ultimate goal. Some see the aim of integration as the establishment of a fully federated ‘United States of Europe’, while others support a more limited form of integration, restricted to the policy areas where it is more beneficial for the European Union (EU)’s Member States to co-operate closely than to act individually. From a political perspective it may be unnecessary to specify a final goal. Instead, integration proceeds step by step, with closer co-operation agreed on in a piecemeal fashion if and when it is regarded as advantageous.
However, from a legal perspective things changed in 2009 when the German Federal Constitutional Court (FCC) determined that the German Constitution (the Basic Law) sets definitive boundaries to EU integration. In its landmark ruling on the compatibility of the most recent EU reform treaty with the Basic Law the Court delivered its manifesto on the future of the EU. While declaring that the Constitution permitted Germany’s ratification of the Treaty of Lisbon, the FCC’s core message seemed to be: ‘Bis hierher sollst du kommen und nicht weiter’ (Hitherto shalt thou come, but no further. Job 38:11). The judgment triggered strong reactions, with Alfred Grosser calling the day of the judgment ‘a black day in the history of Europe’ and the President of the EU Commission, José Manuel Barroso, expressing concern that the judgment could undermine the European project. The importance of the judgment for the EU is reflected in Christian Tomuschat’s prediction that ‘[g]enerations of politicians and lawyers will have to read and re‐read the … ruling of the German Constitutional Court … regarding the Treaty of Lisbon … on almost a daily basis for many years to come.’
The chapter examines the consequences of the FCC’s judgment for the future of the EU integration process. The discussion is divided into five parts. Following the introduction is a brief reflection on the nature of the EU and why a discussion on its integration is relevant to the future of federalism. After that, I explain the path to the Treaty of Lisbon and describe some of its key features. This is followed by an examination of the FCC’s judgment in the Lisbon Treaty Case and the further elaboration of the principles developed in the latter in the subsequent Mangold Case. Finally, the conclusion reflects on the future of the EU integration process and whether the Lisbon Treaty Case really marks the ‘end of open-endedness’ for the European project. It also considers what insights the EU integration process can offer to other, more traditional federal systems.
The Ruling in the Lisbon Treaty Case
The Lisbon Treaty Case was a challenge to the constitutional validity of the legislation by which the German Parliament had approved the Treaty of Lisbon. The applicants claimed that the law ratifying the Treaty violated constitutional guarantees. This provided a platform for the FCC to examine whether the Treaty itself was compatible with the Basic Law. The outstanding significance of the Lisbon Treaty Case lies in the fact that the FCC identified the boundaries to the European integration process contained in the Basic Law for the first time. In addition, the Court confirmed its earlier jurisprudence that it reserved for itself the power to review EU acts.
Three aspects of the ruling in the Lisbon Treaty Case are most significant for the future of EU integration:
The first and most fundamental issue is the finding that the Basic Law does not allow Germany to accede to a European federal state because the Constitution demands that Germany retains state sovereignty. If the German people wanted their country to become part of a ‘United States of Europe’, they would first have to adopt a new Constitution. A mere amendment of the Basic Law cannot achieve this outcome.
Following from this is the second significant aspect of the judgment, that for Germany to retain state sovereignty as prescribed by the Basic Law, it must have legislative power over the following specific policy areas: the use of interior and exterior force, i.e. police and military power; fundamental fiscal decisions, for example on income tax and expenditures; substantial and procedural criminal law; social and welfare policy; and fundamental decisions in culturally relevant areas, for example family, education and religion. The core of these areas cannot be transferred to the EU.
The third relevant issue concerns the question of how the continued existence of the Federal Republic of Germany as a sovereign state can be safeguarded. The FCC holds that it retains the power to review acts of the EU institutions and will conduct review on two bases: to determine whether the institutions transgress the competences granted to them by the Member States in the EU Treaties (‘ultra vires review’) and whether acts of the institutions violate the core content of the constitutional identity of the Basic Law (‘identity review’). The FCC therefore considers itself to be the guardian of German state sovereignty.
By reasserting this right of review and invalidation, the FCC poses an ongoing threat to the principle of supremacy of EU law over Member State law. However, it is important to note that while the FCC has asserted its powers of review on a number of occasions since the 1970s, it has so far never declared EU law inapplicable due to a breach of German constitutional principles. It is therefore known as ‘the dog that barks but does not bite.’
In summary, the Lisbon Treaty Case is significant because the FCC may have determined the boundaries of the EU integration process for a significant period of time. Furthermore, an unusually eurosceptic tone characterises the judgment. Therefore, some commentators saw the case as a turning point in the FCC’s attitude to the European Union. However, the subsequent Mangold Case did not confirm this view.
The Mangold Case – Raising the Bar for Ultra Vires Review
Just over a year after handing down the decision on the Treaty of Lisbon, the FCC delivered judgment in the Mangold Case. This ruling had been highly anticipated because the Court had been asked to determine whether a German law, which the European Court of Justice (ECJ) had previously held to be in breach of European law and thus inapplicable, should be applied in Germany. In other words, the FCC was called upon to make a ruling diametrically opposed to the ECJ and effectively to declare German law supreme over EU law for the first time. The Mangold Case was regarded as the first opportunity to apply the principles on ultra vires review which had been developed in the Lisbon Treaty Case.
However, the majority of the FCC’s ruling disappointed those who had expected the Court to finally ‘bite’ and not only ‘bark’. While the FCC reaffirmed that it had the power to conduct ultra vires and identity review, it did not scrutinise the ECJ’s judgment for transgression of competence. Instead, the Court determined that it would only conduct ultra vires review if the following two conditions were fulfilled: first, the EU institution’s act had to be manifestly in breach of competence, meaning that not every type of breach is sufficient to trigger review. Secondly, the impugned act had to be ‘highly significant in the structure of competences between the Member States and the Union’ ([61]). Particularly the second condition raises the bar very high for situations in which the FCC will engage in ultra vires review.
The majority of the FCC justified the development of this high threshold with the need to balance its own power of review with the duty of the ECJ to interpret and apply the Union Treaties and to preserve the supremacy, unity and coherence of EU law. Their Honours recognised that the uniform application of Union law in all the Member States would be put at risk if every national court would rule on the validity of EU acts individually. Therefore, the FCC as a national court should only engage in ultra vires review in serious cases of competence violation. The case before the Court in the Mangold Case did not satisfy this high threshold and therefore the majority did not review the ECJ’s judgment for transgression of competence. Compared to the Lisbon Treaty Case, the tone chosen by the FCC in the Mangold Case is much more conciliatory towards the EU. The setting of the high threshold for review demonstrates that the Court is still interested in protecting the integrity of the EU legal system by respecting the principle of supremacy of Union law.
Conclusion – The End of Open-Endedness for the European Integration Process?
Does the FCC’s Lisbon Treaty Case mark the end of closer EU integration? I doubt that. First, the Treaty of Lisbon itself provides many opportunities for closer co-operation between Member States and the Union can thus grow further together within the confines of the current reformed Treaties. Secondly, at some point in the future, if there is sufficient political will, the democratic forces will find a way to reform the Treaties yet again, paying attention to the views of the FCC. Thirdly, the FCC has ‘barked’ occasionally, but never ‘bitten’ and this trend continues in both the Lisbon Treaty Case and the Mangold Case. Therefore, it is to be expected that only a truly grave overstepping of competences by the EU institutions or violation of the Basic Law’s core identity could trigger the FCC to make good on its threats and regard a piece of Union law as incompatible with the German Constitution and thus inapplicable in Germany. Aware of this risk, the institutions of the EU will attempt to ensure that they do not overstep the mark in such an extreme fashion.
I regard the comparatively strong legal position of the Member States and their courts within the Union as an advantageous feature of this unusual ‘federal’ entity. In the history of more traditional federations like, for example, Australia or Germany, a strong trend towards centralisation can be observed. It is true that the EU has also had significant centralising tendencies, but its unique architecture provides some safeguards against a blatant usurpation of powers by the Union’s institutions that cannot be found in federal nation states. In Europe there is always the possibility that a Member State may secede from the Union, though this appears unlikely to happen in the near future because the economies of the Member States are so closely connected in the EU’s internal market. (Even the current debate about Greece’s possible ‘exit’ relates not to the European Union as such but only to the monetary union. Greece may have to abandon the common currency but not membership in the EU.) However, more realistic is the threat that a State will not adhere to the principle of supremacy of EU law over national law, at least in one or some areas of law.
While both are abstract dangers insofar as no country has ever left the Union and EU law supremacy is usually respected, they ensure a relationship of mutual respect between the institutions of the Union and those of the Member States. A result of this relationship is an informal dialogue between the national and supranational levels of government.
It can be expected that the Lisbon Treaty Case continues this type of dialogue. The FCC warns the EU that it may disregard the doctrine of supremacy and the EU institutions try to ensure that they do not commit blatant breaches of the relevant principles of EU law. In return, the FCC will probably continue to uphold EU laws over German legislation, while reserving the authority not to do so. The EU’s architecture thus ensures that no side is in a position to dictate terms to the other too strongly. In comparison, in traditional federal systems one level of government is usually stronger than the other, in most cases the central entity. Therefore, federal countries are being centralised over time in a way which their founders may never have imagined.
Following the FCC’s judgment on the Treaty of Lisbon, EU integration will very likely continue at a slower pace than it has in the last two decades. However, in my view that must be welcomed because the pace has been very fast at least since 1993 when the Maastricht Treaty entered into force. It is probably timely for both the EU institutions and the Member States to utilise the current Treaties to their full potential before instigating further reforms. Over time, the European project may yet again gain increased support from citizens and that is when the next major step in closer integration should be contemplated. For the moment, the people of the Member States need the chance to catch up with their political elites and learn to appreciate the benefits but also recognise the problems of the enlarged EU of twenty-seven following the reforms effected by the Treaty of Lisbon. The big picture shows that integration has been beneficial for Europe, delivering an unprecedented era of peace, stability and prosperity to EU Member States and their people. Despite the financial difficulties that have undermined the European project in recent times, I believe that the integration process will continue – although there are certainly reasons to be uncertain whether the dream of some of the EU’s founding fathers of a new federation, a ‘United States of Europe’ will ever be realised.
Cornelia Koch is a Senior Lecturer at the Adelaide Law School.
