The decision on Wednesday by Germany’s Federal Constitutional Court that clears the way for the European Stability Mechanism (ESM) to extend its power over the national sovereignty of the eurozone’s member states was celebrated as a victory to save the euro.
It was nothing of the sort. It was instead a political victory for dictatorship in the name of the euro.
By putting some temporary limits on just how much the German government can contribute to the ESM, the decision made it appear to be prudent and careful and protective of Germany’s national sovereignty. The court said that Germany’s contribution cannot exceed the currently agreed to amount of $250 billion without approval by the Bundestag, the lower house of the German parliament (roughly equivalent to the House of Representatives in the United States). And the court also required that funds given to the ESM must be carefully accounted for.
No permanent mechanisms may be created under international treaties which are tantamount to accepting liability for decisions by the will of other states, above all if they entail consequences which are hard to calculate.
In other words, it sounded as if the court was protecting Germany from outside decisions, especially if the cost of those decisions were to be “hard to calculate.” The court also gave a hat tip to national sovereignty by noting that “the relevant factor for adherence to the principles of democracy is whether the Bundestag remains the place in which autonomous decisions on revenue and expenditures are made.”
This incoherent pronouncement from the nine red-robed justices was just enough to dampen latent resistance to the ESM by the more than 30,000 German citizens who had filed briefs before the court contesting approval of the ESM while delighting the statists who saw the decision as a green light and another step forward to the long-dreamed-of nationalization of Europe by unelected bureaucrats. German Chancellor Angela Merkel told the German parliament that the ruling sends “yet another strong signal to Europe and beyond: Germany is accepting its responsibility as the largest economy and reliable partner in Europe.” German Economy Minister Philipp Roesler told reporters that “we are an important step closer to our goal of stabilizing the euro.”
Investment advisors were giddy that the court’s decision now paved the way for the ESM, in coordination with the European Central Bank (ECB), to start bailing out spendthrift governments such as Spain and Italy with abandon, providing them with investment opportunities. Bonds issued by those states had been hammered prior to the announcement, but are now reviving in price because of the clear backing of the stronger German economy and its taxpayers. Dan Greenhaus, chief global strategist at BTIG, an international investment and bond trading outfit, put it well:
The ruling simply removed a near-term item that was more speed bump than hurdle. More legislative and political challenges [lie] ahead. Today’s ruling simply does nothing to change that larger story. There’s just a larger piggy bank to now play with.
And, as Marketwatch pointed out, “it further clears the way for the European Central Bank to employ the program of unlimited bond purchases it detailed last week.”
So, everyone wins, except those concerned about national sovereignty and its subversion to the extra-legal, ultra-national entity created out of whole cloth and accountable to no one but itself.
This was made clear in a letter by two Austrian citizens, a scholar and a tax accountant, to Austria’s president last year:
As responsible citizens the undersigned have read the draft of the ESM with the necessary diligence and accuracy. We have come to the conclusion that this draft shall not be accepted. Those who sign it, have to be judged as having acted with dolus eventualis [knowing in advance that it was likely to impugn national sovereignty but signing it anyway], if the foreseeable consequences eventuate…
Not only the agreement contradicts the basic EU-conventions, which constitute the basis of entering and holding EU-membership, it also violates the Austrian Federal Constitution, since it transfers the prerogative right of all democracies — i. e. the financial sovereignty — to an institution beyond its control.
If this agreement would be signed, all EU-member states would be directed by an anonymous financial oligarchy without democratic legitimacy. To say it bluntly: It is an enabling act to install anonymous financial enslavement under the pretext of “solidarity”.
Those two citizens whose resistance to the gradual implementation of a European dictatorship which was echoed by those 30,000 German citizens protesting the same had discovered what was really involved:
The demanded privileges and immunities would secure, that the actors, who soak the citizens of Europe with unlimited “solidarity-bills”, would form a super-state, which de facto cannot be legally controlled, sued or prosecuted. The legal personality of the ESM, endowed with full judicial immunity (“immunity from every form of judicial process” etc.) according to Article 27 and the same judicial immunity of its organs according to Article 30 are a judicial carte blanche. [Emphasis added.]
The German high court’s ruling was a victory for everyone concerned about, or looking to profit from, the future of the euro. It was also a victory for those who have been working for decades to enforce an unelected and unaccountable regional government onto the unsuspecting citizens of the sovereign nations of Europe. This is how it’s done: one step at a time.
Photo: The Bundesverfassungsgericht — the Federal Constitutional Court of Germany