August 08
2020
Dolores Utrilla
Dolores Utrilla
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15th July 2020
Institutional law

Editorial Comment: “Europe and its multiple Constitutions”

These days, in the aftermath of the Weiss judgment of 5 May 2020 of the German Constitutional Court (‘BVerfG’) (available in English here), not many would subscribe to Alexander Hamilton’s view that ‘whoever attentively considers the different departments of power must perceive that in a government in which they are separated from each other, the judiciary (…) will always be the least dangerous to the political rights of the Constitution’ (Federalist No. 78 1788). 

The current EU context suggests the opposite. 

Frictions between the Court of Justice (CJEU) and constitutional courts of the Member States are on the rise (fn 1). The preliminary reference procedure is the ‘ordinary’ mechanism of dialogue and collaboration between those courts. However, dialogue can sometimes become strained and national constitutional courts have become bolder in claiming ultimate control of their constitutional counter-limits and of their very core constitutional values. This boldness is sometimes preceded by preliminary references, but sometimes it is not (fn 2). The most visible forerunners before Weiss have been: (a) the Czech Constitutional Court and the Danish Supreme Court in, respectively, Landtovà and Ajos, when declaring that the Court of Justice had acted ultra vires in finding that national statutory provisions and international treaties breached EU law; (b) the BVerfG, in particular in Gauweiler, and (c) the Italian Constitutional Court in Taricco, openly challenging the Court of Justice’s case law, but with a happy ending that led to a non-explicit overruling by the CJEU. 

However, in the case of Weiss the BVerfG has gone beyond all the precedents. In its ruling, the BVerfG first declares that a judgment of the CJEU that confirmed the validity of an ECB act was ‘objectively arbitrary’ and not compliant with the mandate to interpret the law provided in Article 19 TEU and, as a result, ultra vires. Consequently, the judgment enters into a review of the ECB’s contested act that the CJEU had already reviewed, and concludes that the ECB breached the principle of proportionality for not providing convincing factual arguments. Two declarations of two ultra vires EU acts, stepping into the role of the CJEU and the ECB, which are independent EU Institutions, both acting in respect of an exclusive EU competence. 

With the benefit of hindsight, the ruling, despite its severity, is not entirely surprising. The line of reasoning in Weiss (albeit with a different outcome) had been tested by the BVerfG shortly before, in 2019, in the SSM/SRM case. In that judgment the BVerfG did not formally overrule the CJEU, but it significantly downplayed the CJEU’s core findings in the Landeskreditbank case, which it disagreed with and reinterpreted. Prior rulings reacting to other judgments of the CJEU, like Akerberg Fransson or Melloni, were also anticipating the seeds of what later flourished dramatically in Weiss

The consequences of the ruling in Weiss are serious and drastic. The ultra vires control of the BVerfG implies that this court has assumed for itself the power to carry out a final legality control of a monetary policy decision enacted by the ECB. It asserted these powers: (a) with regard to a decision adopted by an EU institution enjoying full independence under Article 130 TFEU (and thus outside the scope of national instructions), (b) in respect of the ECB’s monetary policy mandate, for which there is no longer any competence of the Member States, and (c) based on an ex ante factual assessment which, for a court of the BVerfG’s stature, proved to be formalistic and inaccurate.

The Weiss ruling prompted many vivid reactions, including those of the Court of Justice and the Commission. The Court of Justice issued an unprecedented and harsh rebuke of the judgment through a press release. The Commission has yet to decide on the matter but, shortly after the judgment, President von der Leyen did not exclude the possibility of initiating an infringement procedure against Germany. The ECB proved more conciliatory when it decided to publish the minutes of its 4-5 June Governing Council meeting, followed by a communications campaign providing additional arguments to justify the proportionality of the PSPP. For the time being, it seems as if the BVerfG could be satisfied with very modest gestures on the part of the EU Institutions, but that might be the price to pay by Karlsruhe for such an overt challenge to the authority of EU law. 

As in Socrates’ reply to Xanthippe’s angry gesture, “after thunder comes rain”, but – this time at least – we can still hope that after the rain the sunshine may come again.  However, the impact of this constitutional crisis on the dialogue between the CJEU and national courts, particularly with constitutional and supreme courts, might be more difficult to repair.

Three challenges ahead

The Weiss judgment shows that the building blocks for the interaction between 27 national legal orders and the EU’s legal order might not be as stable as imagined or that, at least, it requires some strengthening. An osmotic legal system will inevitably leave blind spots that need fixing. However, the CJEU’s efforts in keeping all these legal systems together might not be enough.

We see three challenges resulting from the current constitutional crisis.

The first dimension relates to the powers of constitutional review of EU action at the national level. Some Member States deem such powers necessary in order to ensure respect of the transfers of sovereignty to which they agreed in the Treaties. There are also concerns about the importance of constitutional identity and the values of a national democracy and fundamental rights protected in national constitutions. As long as the European Union is not a State, it is reasonable to assume that sovereign Member States are committed to preserving exceptional mechanisms to protect their constitutional identities and competences. 

This means that, in exceptional circumstances, there may be Dworkinian ‘hard cases’ where Member States, through their constitutional judges, may be called to act as a final backstop in their legal order. This may occur to prevent the usurpation of competences by EU institutions acting beyond the powers, to prevent the constitutional identity as expressed by a national democracy to be hollowed out, or to prevent clashes with core fundamental rights with a stronger protection in a Member State’s constitution than that given by the Charter. 

The point, here, is a matter of quantity and quality. The resurgence of a national constitutional control over EU actions, if it is to be accepted, could only operate in rare and highly exceptional circumstances. Thus, if there is to be an ultimate constitutionality check by the Member States, this must be subject to a highly demanding filter of access and must be done in a way that ensures maximum dialogue with the CJEU. 

However, the challenges facing the interaction between the EU legal order and the legal orders of the Member States are not unique. 

American federal history offers a sobering reminder of how a complex architecture of competences can be used both as open lines to communicate and as sharp edges to inflict damage. Article VI, section 2 of the US Constitution, which introduces the Supremacy Clause, established the primacy of federal law over States’ law. At the same time, the US Constitution requires federal institutions to act within constitutional limits. When in 1828 Congress decided to substantially increase tariffs, in a way which protected northern manufacturers but damaged southern states, John Calhoun’s South Carolina Exposition and Protest argued that the tariff was unconstitutional. He argued that the Federal Government had abused its competences in the pursuit of political objectives. The Exposition and Protest claimed that ‘if it be conceded (…) that the sovereign powers delegated are divided between the General and State Governments, and that the latter bold their portion by the same tenure as the former, it would seem impossible to deny to the States the right of deciding on the infractions of their powers, and the proper remedy to be applied for their correction’. 

The ensuing ‘nullification crisis’ (with the South Carolina’s Nullification Ordinance of 1832) was resolved through a political compromise, but the Federal-State tension did not fade away and led to the Civil War and several highly controversial Supreme Court rulings. History confirms that these types of conflicts, if left unresolved, will pose an existential challenge.

The second challenge concerns the opposite situation, when an EU institution is called on to apply national laws that raise constitutional concerns. This is the situation in which the ECB currently finds itself as a result of Article 4(3) of the Single Supervisory Mechanism Regulation (fn 3). In this context, it is possible for the ECB to adopt a decision based on a national law which is claimed to be unconstitutional, challenging its validity before EU courts. 

This poses the (still open) question of whether EU courts – as part of their review and interpretation of the applicable national laws forming the basis for the ECB’s decision (fn 4) – may also assess the constitutionality of those national rules, whilst respecting the prerogative of Member States’ courts to interpret national law. This second challenge signals that the constitutional conundrum in Europe needs tight coordination and fluid dialogue between the European and national constitutional courts, which is the essential premise of the preliminary ruling procedure. As the President of the Italian Constitutional Court highlighted after the Weiss ruling in an interview with EU Law Live, constitutional dialogue in Europe must operate in both directions and all the necessary efforts must be invested by both parties to reach a consensus, no matter how difficult the problems raised may be. 

Again, this question is not unique to the European Union and its relationship with the Member States. For example, the US Supreme Court has no jurisdiction under the US Constitution to interpret State law authoritatively. Only exceptionally has it done so, inviting considerable criticism (fn 5). Thus the need to build ‘bridges’ with the highest state courts.

The third challenge concerns the coexistence of a Monetary Union and a deficient economic and fiscal Union. The Fiscal Compact relies on the EU’s legal framework for its implementation, enforcement and judicial remedies. At the same time, despite some executive powers granted to the ECB, the Commission and newly created EU agencies, an important role remains reserved for the Member States for its specific implementation. In parallel, Member States have established a non-EU institution (the European Stability Mechanism), called on to adopt programmes overseen by two EU institutions (the European Commission and the ECB) and based on Memoranda of Understanding which, despite their ambiguous nature, impose conditions upon recipient Member States that may limit parliamentary sovereignty and encroach upon fundamental rights. 

Increasingly, the CJEU is asked to resolve how this complex mechanism is to operate in practice. So far, it has held that non-EU acts, if adopted by an EU institution, can give rise to Treaty-based responsibility, as in Ledra Advertising and that even MoUs can have legal effects and therefore be subject to judicial review, as in Florescu. However, some national Constitutional Courts, like the Portuguese Constitution Court, have reasserted their jurisdiction in ensuring the proper enforcement of this convoluted legal framework. It is obvious that the resulting legal construct is not a pretty sight, and it will demand considerable efforts in putting all these scattered pieces under a proper framework, in accordance with basic principles that ensure that the Economic and Monetary Union is effectively governed by the rule of law. 

Solutions on the Horizon? 

Is there anything that can be institutionally engineered to manage those tensions or at least to limit the potential for clashes? We do not intend to endorse or to express preferences for one or another option. However, it seems to us that, in a simplified taxonomy, three main courses of action may be identified.

A first option would be to act pragmatically, let the crisis diffuse and leave the Court of Justice with the task of setting the record straight in the course of time. The reaction to the Weiss judgment has been very negative, including in Germany, where the BVerfG has traditionally enjoyed high levels of popular respect. If such a judgment is so harshly rebuked by the learned legal community and finally enforced through the mere publication of minutes of the Governing Council (much ado about nothing!), it could be said that the worst scenario was averted and that it was all an unfortunate incident, of which all players should take note to avoid similar developments in the future. This appears to be the approach taken by the EU Institutions and the German federal authorities so far. It is a non-conflicting and pragmatic position, but it sends a very worrying message: from now on any constitutional jurisdiction will feel empowered to experiment with the ultra vires tool, but in ways that could not be solved so pragmatically in the future. 

A second option would be to undertake serious institutional reform and, for example, develop Joseph Weiler’s idea, already suggested back in 1997, of establishing a new appeal jurisdiction within the Court of Justice for resolving conflicts like Weiss. This proposal envisages the creation of a Mixed Grand Chamber composed of seven judges from the Court of Justice and six judges from the Constitutional or Highest Courts of the Member States in a predetermined order reflecting the rich legal diversity of European legal systems. The review would be limited to cases of ‘serious breach of competence’. This option would blend hierarchy and dialogue: it identifies a last resort forum for resolving cases regarding allegations of a ‘serious breach’, but at the same time makes it a venue where European and Member States’ constitutional voices can be equally heard. These measures would require a Treaty reform, the outcome of which is highly uncertain. Furthermore, it is unclear whether such a solution would stop constitutional courts from using the ultra vires tool anyway. 

A third and intermediate option would be to make better use of the current channels by enabling more dialogue between the CJEU and national constitutional courts, particularly in the disputes pending before the CJEU. Such enforced dialogue could take the form, for example, of recognising that national supreme and constitutional courts enjoy the right to intervene by submitting written observations to the CJEU or participating in oral hearings in Luxembourg. Another type of involvement of supreme and constitutional courts could imply granting them a right to receive a preliminary report of the CJEU on which they may comment within a reasonable deadline, without requiring the CJEU to take those comments into account. Both roles would not change or undermine the prerogatives of the CJEU as described in the Treaties. Symmetrically, similar options could be articulated in national constitutional proceedings. The European Commission could be granted a right to intervene in constitutional review procedures, either by participating in the written or the oral procedure, or both. Alternatively, a mechanism could be introduced to allow the CJEU to submit observations on a draft judgment of a constitutional court ruling on points of EU principle. 

Irrespective of one’s preferences, it is clear that today’s dialogue between the CJEU and national constitutional courts is still designed in a Delphic fashion. If, one way or the other, it could evolve into a Socratic agora, future dialogues would not only help the stronger arguments prevail but, even more importantly, they would strengthen the sentiments of collegial intimacy, of sharing constitutional values and of mutual trust and respect.

 

By the Editorial Board of EU Law Live.

 

(fn 1) Dialogue between the CJEU and national constitutional courts is a characterising factor of current enforcement of EU law: Juan A. Mayoral, Marlene Wind, ‘Introduction. National courts vis-à-vis EU law: new issues, theories and methods’, in National Courts and EU Law. New Issues, Theories and Methods, eds. Bruno de Witte, Juan A. Mayoral, Urzula Jaremba, Marlene Wind, Karolina Podstawa, Edward Elgar, Cheltenham, Nothampton, MA, 2016, p. 3, footnote 11; Darinka Piqani, ‘The Simmenthal revolution revisited: what role for constitutional courts?’, ivi, p. 26-48. Compare, in the Italian Constitutional Court’s recent case law (in addition to Taricco: see fn 2), judgment of 17 December 2017 No 267 (with the further qualifications of judgment of 21 February 2019, no. 20) and ordonnance of preliminary reference 10 May 2019, no. 117.

(fn 2) Compare e.g. Italian Constitutional Court, judgment of 15 April 2008 No 103; Italian Constitutional Court, judgment of 18 July 2013 No 207; French Conseil Constitutionnel, 2013-314, judgment of 4 April 2013; BVerfG, judgment of 14 January 2014.

(fn 3) Florin Coman-Kund, Fabian Amtenbrink, ‘On the Scope and Limits of the Application of National Law by the European Central Bank within the Single Supervisory Mechanism’, (2018) 33 Banking & Finance Law Review p. 133-172; Andreas Witte, ‘The Application of National banking Supervision Law by the ECB: Three Parallel Modes of Executing EU Law?’, (2014) 21 MJ p.89-109.

(fn 4) Milo Prek, Silvère Lefèvre, ‘The EU Courts as “National” courts: National Law in the EU Judicial Process’, (2017) 54 Common Market Law Review p. 369-402.

(fn 5) Bush v Gore, 531 U.S. 98 (2000).

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