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May 06, 2020

...and what it means for the future of the EU

The ruling raises complex and potentially troubling issues for the EU as a whole. The German constitutional court has accused the ECB and the CJEU, the court of Justice of the European Union, of abusing their power, and of acting beyond their assigned competences. That concept is known in German constitutional law as acting ultra vires. In the German legal interpretation of European integration, all sovereignty still rests with the member states. The EU is clearly not a federal state, but a deferred power. Member states have transferred certain rights to the EU. The German court said it accepts that it is bound by CJEU rulings, but only those that occur within the EU's agreed competences. All bets are off it the CJEU goes ultra vires. And, crucially, the German court decides if and when that happens. 

This is the most serious challenge to the EU's legal framework we have yet come across. In the UK, the courts operated under the assumption that conflicts between EU and UK law would always be settled on the basis that EU law is supreme. 

The ruling is unusually explicit about the breach of competences on the part of the CJEU. It criticised the CJEU's positive ruling on the asset purchases as implausible, and objectively arbitrary. It accused the EU court of an evident neglect to investigate the wider consequences of the ECB's programme. The word evident crops up many times in the ruling. It is a legally more loaded word than it appears at first sight. Moreover, the ruling accuses the CJEU of a breach of EU treaty law.

The German court's interpretation will have important consequences if other national courts follow suit, which we think is very likely. Poland's deputy justice minister already declared that member states have regained their position as the masters of the EU treaties. We expect the ruling to strengthen the determination by the Polish government to press ahead with judicial reform, and to resist interference by the EU into what they consider domestic legal affairs.

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May 06, 2020

Ciudadanos saves Sanchez' Covid-19 plan

The Spanish government's strategy for containing the Covid-19 outbreak depends on maintaining the state of emergency, because of the need to limit people's right of free movement. But not everyone agrees. In particular the People's Party is arguing it is possible to implement the government's complex, four-stage, province-by-province exit plan using ordinary legislation. Faced with the risk of losing today's parliamentary vote on extending the state of emergency for two more weeks, the government has just closed a cooperation agreement with Ciudadanos, the liberal party. This is big news. The government is still in negotiations with the Basque Nationalist Party PNV for its support.

The PP has made it known it will not support another extension, but without revealing whether they will abstain. If they vote against, they would join the far-right party Vox, the Catalan separatist parties, and a few small conservative regional parties. This is not a majority, but it would be enough to beat PSOE, Podemos and the minor left parties supporting the coalition government. The left Catalan separatist party ERC abstained in January to allow Sánchez to be appointed PM for a second term, but they have confirmed they will vote against the government today. Sánchez has preferred to inform the regional presidents about measures rather than consult or negotiate with them, and has centralised the management of the health crisis even though health care management is devolved to the regions. So, to make up for the loss of ERC, Sánchez been thrust into the arms of Ciudadanos.

The government and Ciudadanos agree that the state of emergency is a necessary constitutional measure, and will look into ways to continue to protect the population once it ends. Apart from the possibility to restrict the fundamental right of free movement, there is the issue that many of the economic and social measures have been legislated to last so long as the state of emergency is in force. This includes short-work schemes, and special aid to the unemployed and the self-employed. The government will also negotiate weekly with Ciudadanos the steps to take in the phasing-out of the Covid-19 containment measures. This opens up the prospect of C's providing outside support to the government going forward, which would be a major development. The inability of Ciudadanos and Podemos to work together with the PSOE has been a determinant factor in Spanish political developments since the 2015 election. The change has been made possible by the strategy of the new liberal party leader Inés Arrimadas.

Meanwhile, the PNV still has not announced what it will do today. It is likely that it will support the government in exchange for a commitment to include the regions in the governance of the exit strategy, possibly also through weekly negotiations as with Ciudadanos. 

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