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Brunner [1994], BVerfG
FACTS
Reviewed the compatibility of the ratification of the Maastricht Treaty with the constitutional rights provided by the German Constitution, including the right to participate in the exercise of state power (Article 20(2) Basic Law, given that there is an insufficient degree of democracy at Community level and that basic state powers are transferred to the EU).
OUTCOME
The ratification of the Maastricht Treaty was held compatible with the Constitution.
The Maastricht Treaty was compatible with constitutional rights: The applicant’s rights would only be infringed if the exercise of the Bundestag’s competence were transferred to EU institutions that did not provide for the democratic legitimation of sovereign power.
Applied: Joining the EU “does not entail a decrease in constitutional standards to a substantial degree”, given that the FCC will ensure that an effective protection of basic human rights will be maintained.
This is because of the principle of conferral (the fact that a Treaty objective is not enough to confer powers), the fact that EU powers are dependent on Treaty amendment, the fact that the EP will provide sufficient representation of the people and since sufficient functions and powers of substantial political weight are left to the Bundestag.
On the possibility of ultra vires review:
There is a clear dividing line between a “legal development within the terms of the Treaties and the making of legal rules which breaks through its boundaries and is not covered by valid Treaty law” [is this true?]
Article 23(1) of the German Constitution requires an assenting Act for amendments to EU Treaties.
On Article 235 and ultra vires acts: Whereas a “dynamic extension” of the Treaties has been achieved through an “open-handed treatment of Article 235” as a “competence to round-off the Treaty”, Article 235 “may not have effects that are equivalent to an extension of the Treaty”.
“Such an interpretation of enabling rules would not produce any binding effects for Germany”.
Re the Lisbon Treaty [2009], BVerfG
FACTS:
Reviewed the compatibility of the ratification of the Lisbon Treaty, which led to an Act Amending the Basic Law being passed.
Complainants’ argument #1: Their right under Article 38 of the Basic Law is violated (the entitlement to vote and legitimate the state authority) because the Act Approving the Treaty of Lisbon withdraws the exercise of state authority from the Bundestag, places it in institutions which suffer from a democratic deficit.
Complainants’ argument #2: Their basic rights under the Basic Law are violated because the CFR leads to human rights being subject to weighing against other interests.
OUTCOME:The ratification of the Lisbon Treaty was held compatible with the Constitution.
Why was ratification compatible with the Constitution?:
i) The right to vote under Article 38(1) is not violated because the German people still decide essential political issues and can vote in MEPs.
ii) The Treaty does not lead to the transfer of powers to a “federal state” (especially since the Constitution was rejected) but an “extension of the constitutional federal model by a supranational cooperative dimension”.
iii) The Treaty strengthens elements of participative democracy to make up for its existing degree of federalisation and the principle of subsidiarity is procedurally strengthened through the early warning system.
iv) The EU does not have the “competence to decide on its own competence” (Kompetenz-Kompetenz).
v) On supremacy: With respect to Declaration No. 17 Concerning Primacy annexed to the Treaty of Lisbon, Germany “does not recognise an absolute primacy of application of Union law, which would meet with constitutional objections”, but merely confirms the FCC’s past case law.
This Declaration does not affect the FCC’s competence.
On the supremacy of EU law:
Effect of an EU law being found supreme: This does not “have such a derogating effect to the extent that it annuls law” – it “does not affect the claim to validity” of conflicting law but only “inhibits its application to the extent required by the Treaties”.
Even though the primary interpretation of the Treaties lies with EU bodies, it must be possible for the German court to “assert the responsibility for integration if obvious transgressions of the boundaries occur”.
Limits: EU law may not claim primacy over the constitutional identity of Member States.
On identity review:
Identity review: Allows the FCC to examine whether EU actions have violated the principles under Articles 1 and 20 of the Basic Law (declared inviolable by Article 79.3).
Although the Basic Law grants the legislature powers to engage in a “far-reaching transfer” of sovereign powers to the EU, these are “granted on the condition that the sovereign statehood of a constitutional state” is maintained, while respecting the “Member States’ constitutional identity”.
“Sufficient space” must be left to MS for the “political formation of the economic, cultural and social living conditions”: This applies particularly to “areas which shape the citizens’ living conditions”:
i) The civil and military monopoly on the use of force, revenue and expenditure.
ii) Elements that are decisive for the realisation or encroachment on fundamental rights (i.e. deprivation of liberty through criminal law).
iii) Cultural issues such as language, family and education, freedom of opinion, press and association and faith and ideology.
Applied: Even though democratic self-determination is affected in an especially sensitive manner by criminal law, the corresponding basic powers in the Treaty must be interpreted strictly – but the Treaty provides “sufficient indications for an interpretation in conformity with the constitution”.
Honeywell [2011], BVerfG
FACTS
Claimant was employed by D, where the contract allowed fixed-term contracts without limitations for employees over 52 (exception to the general rule that such contracts cannot exist in Germany). In Mangold, this German exception was held to constitute age-based discrimination. Claimant asked the employment court to declare he is employed on an indefinite contract (because his fixed-term clause is invalid for breach of EU law – the Directives as said in Mangold). So, C argued it is the national court’s responsibility to set aside any provision of national law which might conflict with EU law, even where the transposition period has not passed.
Before the BVerfG: The complainant (D above, the employer) argued that Mangold was methodologically so flawed that it constitutes an ultra vires act; also argued that the employer’s right to the lawfully assigned judge (under the GG) was infringed by not making a preliminary reference to the CJEU.
OUTCOME
Suggests there is a general presumption that EU institutions will not act ultra vires. On clear and exceptional violation of this principle, national courts can challenge the primacy of EU law and thus disapply EU law and use ultra vires review.
Mangold does not qualify for ultra vires review because it does not satisfy Condition #3.
The BVerfG may exercise ultra vires review:
Argument #1: EU law “can only develop effectively if it supplants contrary MS law”, making MS law inapplicable in the field of application of EU law (but this does not make it void).
Rebuttal – however, the “primacy of application of Union law cannot be comprehensive”: The Union remains dependent on MS accepting the Treaties and amending them.
So, the BVerfG is “hence empowered and obliged to review acts” of the EU.
Argument #2: If each MS claimed the ability to decide on the validity of EU acts, “the primacy of application would be circumvented in practice, and the uniform application of Union law would be placed at risk”.
Rebuttal: However, if MS were to completely forgo ultra vires review, “disposal of the Treaty basis would be transferred to the Union bodies alone”.
“In the borderline cases of possible transgression of competences” of the EU, which are “infrequent”, “the constitutional and the Union law perspective do not completely harmonise”.
Why?: Because the MS “remain the masters of the Treaties”.
“The tensions, which are basically unavoidable according to this construction, are to be harmonised cooperatively in accordance with the European integration idea and relaxed through mutual consideration”.
Ultra vires review must be exercised in a manner “which is open towards European law”.
When can ultra vires review be exercised by the BVerfG?:
Ultra vires review must be exercised in a manner “which is open towards European law”.
“If the supranational integration principle is not to be endangered, ultra vires review must be exercised reservedly”.
Condition #1: The CJEU must be afforded the opportunity to interpret the Treaties and rule on the validity of the acts through a preliminary reference.
Condition #2: The act of the EU must be “manifestly in breach of competence”.
Condition #3: The EU institutions must have “transgressed the boundaries of their competences in a manner specifically violating the principle of conferral” (i.e. the breach of competence is sufficiently qualified).
The impugned act must lead to a “structurally significant shift to the detriment of the Member States in the structure of competences”.
Applied: The conditions were not fulfilled.
It is not for the BVerfG to supplant the CJEU’s interpretation with one of its own where a methodological interpretation of the statute can lead to different outcomes.
What Mangold did:
i) Applied a Directive before the end of its transposition period.
ii) Derived a general principle of the prohibition of discrimination based on age.
But neither of these led to a structurally significant shift to the detriment of MS competences.
DISSENT: JUSTICE LANDUAU
Preferred outcome: Ultra vires review should have applied because Mangold manifestly transgressed the competences given to the EU because i) it extends direct effect despite the implementation period not expiring and ii) the justification for assuming a general principle is methodologically misguided.
Starts with a particular view of the CJEU-BVerfG relationship: As per the Lisbon judgment, it must be recalled that acts of the EU are only democratically legitimised as long as they remain within the competences given to them by the MS.
On breaches of these boundaries, the BVerfG has an obligation to effect ultra vires review: “The majority one-sidely dissolves the tension occurring here between the principle of safeguarding democratic legitimation and the functioning of the Union in favour of functionality [i.e. in favour of uniformity of EU law]”.
Ultra vires review only applies to manifest breaches (as per Lisbon): i.e. unambiguous and evident.
There should be no further requirements: i.e. as the majority do, by requiring not only a manifest breach but a sufficiently qualified breach.
This ignores the “major prerequisite of binding democratic legitimation on exercising sovereign power that is emphasised in the Lisbon judgment which is breached on any transgression of competences”.
Outright Monetary Transactions [2014], BVerfG
FACTS
Made its first preliminary reference to the CJEU. During the state debt crisis, the ECB established a Securities Market Programme. The applicants challenge this programme as having exceeded the ECB’s competences (since its competences were limited to monetary policy and had no competence for economic policy) and violating Article 123 TFEU (which prohibits monetary financing of Member State budgets). Additionally, they suggest that the Programme violates the principle of democracy and thus the applicants’ fundamental right under Article 38(1) of the Basic Law.
The case below is a response to the CJEU’s answer to this preference!
OUTCOME
The FCC made a preliminary reference asking whether the decision was compatible with Articles 119 and 127 TFEU (on the ECB’s mandate) and Article 123 TFEU.
The BVerfG was highly critical of the programme, expressing its willingness to declare it ultra vires and voicing its doubts about its compatibility with EU law.
The ECB’s competences were exceeded: It was not an instrument of monetary policy but of economic policy, transgressing the ECB’s competences.
Article 123 was violated: The intended purchase of sovereign bonds violate the prohibition of monetary financing.
2 BvR 2728/13, Decision of 21 June 2016 of the BVerfG (OMT) – on Gauweiler
FACTS
During the state debt crisis, the ECB established a Securities Market Programme. The applicants challenge this programme as having exceeded the ECB’s competences, violating the principle of democracy and thus the applicants’ fundamental right under Article 38(1) of the Basic Law. Thus, the applicants argue that the German Bundesbank is not allowed to implement the programme.
On the applicants’ rights: Argued that the principles of democracy and of the sovereignty of the people (Article 20 Basic Law), which belong to the constitutional identity of the Basic law, were affected.
The exercise of public authority by EU institutions violates the principle of sovereignty of the people if it does not possess significant democratic legitimation from the European integration agenda laid down in the Act of Approval.
CJEU’s preliminary ruling in Gauweiler (the first preliminary reference!): Responded to the questions submitted by the BVerfG in the Outright Monetary Transactions case – the scheme neither overstepped the ECB’s competences nor violated Article 123 (prohibition on monetary financing). Additionally, the measures were proportionate.
This case on Gauweiler:Accepted the CJEU’s ruling that the impugned EU programme was lawful, even though it had expressed strong reservations to the contrary in the Outright Monetary Transactions case
OUTCOME
So long as the conditions that the CJEU set out for the programme are followed, the CJEU’s judgement does not manifestly exceed the competence attached to the ECB under the BVerfG’s ultra vires review. If the conditions were not followed, such competence would have been manifestly exceeded.
Admissibility of claims:
What was inadmissible: The applicants challenged the ECB’s scheme directly and thus found this claim to be inadmissible, seeing that constitutional complaints can only be lodged against acts of German public authorities (not EU authorities).
However, the acts of an EU organ can be scrutinised indirectly as preliminary questions.
What was admissible: The complaint against the German Federal Government for omitting to challenge the ECB’s decision on the scheme.
On the importance of EU supremacy:
On supremacy: The uniform application of Union law is crucial for the EU to be successful and to achieve the aims set by the Treaties” – the EU could not otherwise exist.
Basis of EU law’s supremacy: The Basic Law empowers Germany to “transfer sovereign powers” to the EU (Article 23).
Supremacy does not apply to national constitutional law: A “large majority” of constitutional and supreme courts share the view of the FCC that the “precedence (of application) of Union law does not apply without limits, but that it is restricted by national (constitutional) law”.
As “masters of the Treaties”, the Member States, by ordering the applicability of EU law at national level, “decide whether and to what extent Union law may claim applicability and precedence”.
But, the EU must respect the principle of sovereignty of the people: Only acts which have democratic legitimacy can be allowed – otherwise, the “power to dispose of the fundamental aspects of the Treaties” would be given to the EU, which would “result in a Treaty amendment or an expansion of competences”.
This is to stop them from “de facto possess[ing] a Kompetenz-Kompetenz that was not allowed to be transferred to them”.
Review of EU action:
Ultra vires review: Examines the EU act to see whether the acts “exceed the European integration agenda in a sufficiently qualified way and therefore lack democratic legitimation in Germany”, serving to ensure the RoL.
On the basis by which EU law is accepted: The “precedence of application of EU law only extends as far as the Basic Law and the relevant Act of Approval permit or envisage the transfer of sovereign powers”.
Effect of this review: EU acts that are ultra vires violate the European integration agenda in the Act of Approval, so this review serves to counter such violations.
Identity review: Examines the EU act in a substantive sense as to whether the “ultimate limit” of the principles of Articles 1 (on the legally binding force of basic rights) and 2 (on personal freedoms) of the Basic Law has been exceeded”.
Differs to ultra vires review: It does not examine whether the transferred competences were exceeded or not.
Effect of this review: Ensures the EU is not given sovereign powers outside the areas of their competence (the EP is precluded from touching on matters of constitutional identity by Article 79 of the Basic Law).
Prevents the implementation of acts by EU institutions that “de facto amount to a transfer of power in violation of the basic law”.
On the standard of review in both:
The intensity of review is low: If EU institutions exceed their competences in a “manifest and structurally significant manner or violate the constitutional identity in other ways, the constitutional organs must actively take steps to ensure that the European integration agenda is respected”.
Restraint: The ultra vires and identity review “must be exercised with restraint and in a manner open to European integration”, exercised by the FCC only, consider that the CJEU has a right to tolerance of error and appreciate that EU institutions possess “large margins of appreciation and assessment as well as much leeway to design”.
As long as the CJEU applies recognised methodological principles and does not act objectively arbitrarily, the FCC must respect CJEU case law, even where the CJEU “adopts a view against which weighty arguments could be made”.
However, finding that competences have been exceeded in a manifest way does not require there to be no differing views on the issue.
It is not the FCC’s role to replace the CJEU’s interpretation just because there are different reasonable results.
They are two “independent instruments of review”: Exceeding competence in a sufficiently qualified manner, however, also affects the constitutional identity.
Thus, the ultra vires review is a “particular case” of the “application of the general protection of the constitutional identity”.
Weiss [2020], BVerfG
FACTS
C alleged that the decision of the ECB to participate in quantitative easing was an ultra vires act because it transgressed the competence of the ECB in a structurally significant manner (Honeywill requirement) because it only has competence in monetary policy. C also alleged these decisions infringe the principle of democracy under the GG (because the Bundesrag should take all essential decisions on revenues and expenditure) and thus undermine the German constitutional identity.
C challenged the inaction of the Bundestag and Government to take steps to avoid this structurally significant exceedance of competence by challenging it.
OUTCOME
Outcome: The ECB was acting within its competences and its action was proportionate.
1) Was the action within competence?: Yes.
Look at the objectives of the measure to determine whether it is monetary or fiscal policy.
The primary objective of EU monetary policy in Article 127(1) and 282(2) TFEU: To maintain price stability.
This objective is defined in a general and abstract manner.
Applied: Admittedly, QE is capable of having an impact on the balance sheets of commercial banks such that its effects might be sought through economic policy measures. However, per the CJEU in Gauweiler, these effects are indirect effects – so this does not stop it being monetary policy.
In monetary policy, there will always be a foreseeable impact on the real economy – these must be considered as indirect effects or otherwise the ECB could not fulfil its goals.
It is in line with the prohibition on monetary financing: It does not have an effect equivalent to the direct purchase of bonds.
2) Was the action proportionate?: Yes – it does not manifestly go beyond what is necessary to achieve its objective.
The programme of QE may be validly adopted only if the measures it entails are proportionate to the objectives of that policy.
The ECB must be given a broad discretion in making complex and technical decisions.
There was no manifest error of assessment in creating the QE programme – it was adopted in the light of a risk of deflation.
Other central banks had acted similarly and there were strict eligibility criteria.
It does not appear that the objective could have been achieved by any other more limited monetary policy action
Outcome: Reluctantly accepted that the ECB was acting within its competences, but disagreed that its action was proportionate – the CJEU in Heinrich Weiss acted ultra vires by upholding the scheme. If the ECB issued a new decision within three months that “demonstrates in a comprehensible and substantiated manner” that the “monetary policy objectives [...] are not disproportionate to the economic and fiscal policy effects”.
Largely repeats Honeywell on the basis of ultra vires review:
If any MS could invoke the authority to decide on the validity of EU acts, this could jeopardise the uniform application of EU law.
Rebuttal: But if MS were to completely refrain from ultra vires review, “they would grant EU organs exclusive authority over the Treaty even in cases where the EU adopts a legal interpretation that would essentially amount to a treaty amendment or an expansion of its competences”.
Cases of such exceedance are expected to “remain rare due to the institutional and procedural safeguards enshrined in EU law”.
“Nevertheless, where they do occur, the constitutional perspective might not perfectly match the perspective of EU law” since MS “remain the ‘Masters of the Treaties’ and the EU has not evolved into a federal state”.
“In principle, certain tensions are thus inherent in the design of the EU; they must be resolved in a cooperative manner, in keeping with the spirit of European integration, and mitigated through mutual respect and understanding”.
Ultra vires review must be exercised with restraint.
Applied: There was a qualified (i.e. manifest and structurally significant) exceeding of the ECB’s competences insofar as the actions were not proportionate. Thus, the judgment of the CJEU “constitutes an ultra vires act that is not binding on the FCC”.
1) Was the ECB acting within competence?: Yes.
Despite concerns, the CJEU’s view that the decision did not violate the prohibition on monetary financing in Article 123 is tenable.
So there was no issue here of constitutional identity review.
2) Were the ECB’s actions proportionate?: No. The CJEU’s proportionality assessment was “not comprehensible from a methodological perspective” and is thus ultra vires.
The CJEU disregarded the actual (i.e. economic policy) effects of the decision, despite acknowledging them:
This renders the proportionality assessment meaningless:
Its key element – balancing conflicting interests – could not occur because the CJEU did not look at whether the economic policy effects were proportionate to the intended advantages in monetary policy.
It merely asserted that less intrusive means were not available.
Is the threshold for ultra vires review passed?: Yes.
Structurally significant exceeding of competences: The low manifest disproportion standard of review and discretion given to the ECB allows it to expand its own competences, which results in a “structurally significant shift in the order of competences to the detriment of the MS”, by risking eroding their economic policy competences.
This risks further weakening the democratic legitimation exercised by the ECB, which is not compatible with the GG.
Thus, the CJEU essentially allows QE even where the “purported monetary policy objective is possibly only invoked to disguise” an economic policy agenda.
HS2 [2014], UKSC
FACTS
C brought JR against the government’s command papers laying out the strategy and plans in regards to building HS2 because: i) the hybrid bill procedure was incompatible with the EU EIA Directive, which require the public to express their opinion and ii) a SEA assessment under the EU SEA Directive should have been conducted.
C’s argument: The court should rule on the matter now by ruling on the compatibility of the hybrid bill procedure with the EIA Directive.
D’s argument: The court should not even consider the compatibility of the hybrid bill procedure with the EU Directive, because this would be contrary to Article 9 Bill of Rights (proceedings in Parliament cannot be questioned in a court of law).
The court concluded Article 9 was not engaged.
OUTCOME
Establishes a hierarchy of constitutional statutes within the UK constitution – Lord Neuberger and Lord Mance’s analysis infers that the Bill of Rights is more fundamental than the ECA 1972.
Seems to accept constitutional identity review?!
C’s appeal was dismissed because i) the hybrid bill was not incompatible with EU law and ii) the command paper fell outside of the scope of the EU SEA Directive.
Article 9 point: Ultimately, Article 9 was not engaged, but the court considered what would happen if it were engaged:
Lord Carnwath: C’s argument on the EIA Directive, if accepted, would impinge on long-established constitutional principles (Article 9, Bill of Rights).
Has Article 9 and other constitutional principles been implicitly qualified or abrogated by the ECA 1972?: Contrary to C’s argument, the question cannot be resolved by simply applying the supremacy of EU law.
“The application of that doctrine [i.e. supremacy] in our law itself depends on the 1972 Act”.
“If there is a conflict between a constitutional principle, such as that embodied in Article 9 of the Bill of Rights, and EU law, that conflict has to be resolved by our courts as an issue arising under the constitutional law of the UK”.
This is the case even though the interpretation of the EIA Directive is a matter of EU law.
“A further difficulty” with C’s argument that EU law requires the bill procedure to be subject to judicial oversight: C’s arguments would pose difficulty in any MS in which it would be considered inappropriate to supervise internal proceedings of the legislature.
Thus, it seems unlikely the CJEU “intended to require national courts to exercise a supervisory jurisdiction over the internal proceedings of national legislatures of the nature for which the appellants contend”.
There is much to be said for the BVerfG’s view that “as part of a co-operative relationship, a decision of the ECJ should not be read by a national court in a way that places into question the identity of the national constitutional order”.
Lord Neuberger and Lord Mance: It is not conceivable, and not consistent with the principle of mutual trust underpinning the EU that the Council, in legislating for the EIA Directive, envisaged the close scrutiny of legislatures.
The CJEU will have been well aware of the principle of SoP and “cannot have overlooked or intended to destabilise these”.
The BVerfG has noted similarly: Decisions of the CJEU must be understood in the context of the cooperative relationship between the CJEU and the supreme court.
C’s argument would effectively impeach Parliament’s internal proceedings.
ham v Home Secretary [2015], UKSC
FACTS
VA suspected terrorist with no convictions had his UK citizenship stripped under s40(2) British Nationality Act 1981. Was this decision a proportionate one under EU law (because it would render C stateless)? Was EU law engaged by the removal of EU citizenship?
More constitutional identity review.
OUT COME
LORD MANCE —> EU law as dependent on the ECA: “Unless and until the rule of recognition [...] is altered, we must view the United Kingdom as independent, Parliament as sovereign and European law as part of domestic law because Parliament has so willed”.
“The question how far Parliament has willed is thus determined by construing the 1972 Act”.
“A domestic court faces a particular dilemma, if, in the face of the clear language of a treaty [...] the Court of Justice reaches a decision which oversteps jurisdictional limits which member states have clearly set” in the Treaties and in their constitutional arrangements implementing EU law.
Constitutional identity review??: “Unless the ECJ has had conferred on it under domestic law unlimited as well as unappealable power to determine and expand the scope of European law, irrespective of what the MS clearly agreed [it has not], a domestic court must ultimately decide for itself what is consistent with its own domestic constitutional arrangements, including in the case of the 1972 Act what jurisdictional limits exist under the European Treaties and on the competence conferred on European institutions including the ECJ”.
“It will be a very rare case where any problem arises in this connection, and the recipe for avoiding any problem is that all concerned should act with mutual respect and with caution in areas where MS’ constitutional identity is or may be engaged”.
“This reflects the spirit of cooperation” as noted by the BVerfG and this court previously.EU law as dependent on the ECA: “Unless and until the rule of recognition [...] is altered, we must view the United Kingdom as independent, Parliament as sovereign and European law as part of domestic law because Parliament has so willed”.
“The question how far Parliament has willed is thus determined by construing the 1972 Act”.
“A domestic court faces a particular dilemma, if, in the face of the clear language of a treaty [...] the Court of Justice reaches a decision which oversteps jurisdictional limits which member states have clearly set” in the Treaties and in their constitutional arrangements implementing EU law.
Constitutional identity review??: “Unless the ECJ has had conferred on it under domestic law unlimited as well as unappealable power to determine and expand the scope of European law, irrespective of what the MS clearly agreed [it has not], a domestic court must ultimately decide for itself what is consistent with its own domestic constitutional arrangements, including in the case of the 1972 Act what jurisdictional limits exist under the European Treaties and on the competence conferred on European institutions including the ECJ”.
“It will be a very rare case where any problem arises in this connection, and the recipe for avoiding any problem is that all concerned should act with mutual respect and with caution in areas where MS’ constitutional identity is or may be engaged”.
“This reflects the spirit of cooperation” as noted by the BVerfG and this court previously.