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01 May 2021

How not to think about Karlsruhe

The German constitutional court is a mythical beast. If you haven’t spent decades trying to extract the meaning of ultra vires, you may be be confused. When you hear about the democracy principle, you may think you know what that means, but you don’t.

That’s ok. Being confused is not the worst state of mind. The very worst is when you think you have clarity but you don’t. It is the stuff that most newspaper columns are made of.

So here is my layman’s guide on how to misread Karlsruhe, as the German constitutional court is known after the German city where it is based. The skill of misreading the court is particularly well developed in the UK. Here are the three cardinal errors you can make, in rising order.

A reliable method is simply to apply the constitutional principles of your own country - and then be amazed. Were you not shocked when you heard that Karlsruhe accused the EU of transgressing its assigned competences - which is what ultra vires means? Was it not an argument in favour of Brexit that European law always superseded national law, and that the only way to take back control was to leave the EU? How is this possible? To understand it, you have to deep-dive into the subterranean spheres of German constitutional law. You won’t find it anywhere else.

The next category up is probably the largest group. They are a fanboys. They agree with the referees when they side with their team, otherwise not. The fan boys superimpose their own political views. They applaud last week’s German constitutional court ruling calling on the German government to front-load carbon emission cuts. But they accuse the court of europhobia in its EU-related ruling. This is a hypocrisy because the court applied similar legal arguments in all of these cases.

If you really want to excel and get the court wrong on an intergalactic scale, here is what to do: be an economist and apply your model. Or even call them economically illiterate. What you will find is that Karlsruhe is not sycophantically aligned with any school of economic thought. They don’t do economics.

So after my list of don’ts, here is my list of dos. First of all, avoid the assumption that they are stupid, ignorant, europhobic, or a group of old white men from a different era. Take a look at the picture above of the eight justices of the so-called second senate, the ones responsible for EU-related rulings. And don’t assume that they are political players. Some are. Most are not.

Predicting a concrete future ruling is a mug’s game. The court often surprises. A reasonable starting point is to assume that the court will try to be consistent with previous rulings. In all EU rulings, starting with the Maastricht Treaty decision in 1993, they never sided with the plaintiffs. What they did was to define the legal space within which European integration is permitted to proceed under German constitutional law. They did not undo the past. But they set binding stop signs. Their definition of fiscal sovereignty as an absolute right is the reason EU still does not have a fiscal union despite our multiple crises.

If you apply this thinking to the ongoing case about the legality of the EU recovery fund and the way it is financed, you should expect some or all of the following: The court already rejected a request by the eurosceptic plaintiffs for an injunction. When they pass their final ruling, it would be in character for them to reject the case as well. But they may insist that the fund is only constitutional for as long as it constitutes a response to a clearly-defined emergency. I would expect some strong language about any linkage between the fund and a future fiscal union. I would expect them to block such a pathway from the outset. The eventually ruling is almost certainly going to be more complex. But this is a good starting point to think about it.

And finally, here is some general pundit advice. Getting your predictions right is much over-rated. Forecasting is for fools. You will go a surprisingly long way simply by avoiding the three logical and cognitive errors that correspond to each of the don’ts in our list: the fallacy of composition; confirmation bias; and model bias.

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