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German judges may hold Europe's fate in their hands

The supreme court panel is expected to deliver its ruling on whether German participation in a permanent bailout fund is constitutional.

September 11, 2012|By Henry Chu, Los Angeles Times
  • Judges of the Federal Constitutional Court adjust their caps before delivering a pronouncement about the euro crisis response in February in Karlsruhe, southern Germany. On Wednesday, eight judges are expected to deliver a landmark ruling on Germany’s participation in a European bailout fund.
Judges of the Federal Constitutional Court adjust their caps before delivering… (Uli Deck, AFP/Getty Images )

KARLSRUHE, Germany — In their eye-catching red robes and caps specifically designed to evoke Renaissance Italy, Germany's supreme court justices have long demonstrated a flair for the theatrical.

But even they would probably never have cast themselves as leading actors in a nail-biting drama whose highly anticipated denouement could seal the fate of Europe's — and possibly the world's — economy.

In a hushed courtroom Wednesday, the judges are expected to deliver a landmark ruling on whether Germany's participation in a permanent European bailout fund is in line with the country's constitution.

Thumbs up, and Europe's game plan for keeping countries like Spain and Greece afloat amid the region's long-running debt crisis can go ahead. Say no, and the plan would be gutted of its most vital elements, sending European leaders into shock, markets into turmoil and the global economy into fearful uncertainty over the very survival of the euro.

As Russell Miller, an expert on the German high court, bluntly described the question facing the panel: "Are the eight of us going to plunge the world economy into doom?"

Many analysts think not, arguing that the court knows the weight on its shoulders and will swallow any misgivings to produce at least a qualified ruling affirming Berlin's decision to contribute to the $640-billion European rescue fund. The justices are examining whether handing over money, in essence, to ailing nations infringes on the German Parliament's constitutional right to control how federal funds are spent.

But no one is willing to bet on the court's ruling, which has Chancellor Angela Merkel's government on edge. Public opposition to the bailout fund is strong; hundreds of protesters turned out over the weekend for a rally here in Karlsruhe to urge the court to strike down Germany's participation in the program.

Such a judgment would rob the rescue fund of its biggest financer and knock Europe's leaders back to square one in their attempts to resolve the debt crisis. As one of the chief authors of the European Stability Mechanism, or ESM, Merkel would also find her credibility seriously undermined.

Whichever way the justices rule Wednesday, the debate over the ESM has put Germany's high court under almost unprecedented scrutiny and pressure, not just from within the country but from outside as well. Few of its decisions have had international observers holding their breath like this.

The court is here in Karlsruhe, a quiet university town along the Rhine not known for much else. After Germany's disastrous experience with strong centralized governments in the first half of the 20th century, postwar officials dispersed power among different parts of the country, with lawmakers based in Berlin (or Bonn, during the Cold War), the central bank in Frankfurt and the Federal Constitutional Court in this southern city.

The court is roughly analogous to the U.S. Supreme Court but in some ways much more powerful, in part because it is so active, issuing hundreds of judgments a year. Key rulings include its support of deployment of German troops for more than simply defensive operations and its invalidation of a law allowing the military to shoot down hijacked planes.

The court is unquestionably the most important national high court in Europe and among the most important in the world, whose jurisprudence, like that of the U.S. Supreme Court, is studied in countries as far away as Africa and South America.

There are 16 justices, eight of whom normally sit on a case. Unlike their American counterparts, who enjoy lifetime tenure, the Germans serve a maximum of 12 years and must retire at age 68.

Because they earn appointment by a two-thirds majority vote in either house of Parliament, the jurists tend to be more centrist, which might mean greater harmony on the bench but which can make their decisions harder to predict, in contrast with the sharp political divisions on the U.S. Supreme Court. The German panel's tradition of mostly unanimous rulings also makes it difficult to guess which way any one justice leans.

"You don't have the same tea leaves we have, like signed previous opinions that might be predictive of future decision patterns," said Miller, a law professor at Washington and Lee University in Virginia, who worked at the German high court in the early part of the last decade.

But the lack of a clear ideological slant also boosts the court's reputation and the level of trust it inspires among ordinary Germans.

"It is the most revered public institution above all," Miller said. "It beats the churches, it beats the universities, it beats the Bundestag for public regard."

That's particularly important for an issue as vexed and emotive as the bailout fund.

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