The own resources mechanism, which enables the European Commission to borrow to cover the recovery fund and which requires ratification in the national parliaments of the 27 Member States, has just overcome the German stumbling block. The constitutional of this country, which had stopped the decisive signing of that legal authorization after ratification in the Bundestag, has ruled this Wednesday that it files the appeal presented by a group of Eurosceptics against that legislation and, consequently, unblocks the procedure allowing that Germany authorizes Brussels to issue debt worth up to € 800 billion in current prices, something that seventeen EU countries have formally endorsed to date.
The Federal Court rejected the urgent demand against the execution of the ratification law. The judges do not consider that the claim in the main proceedings is “evidently unfounded”, although “with a summary examination”, however, it could not be determined that there may be a high probability of a constitutional violation. “The objections of the plaintiffs do not mean that the authorization of the European Commission to raise 750,000 million euros in the capital market goes beyond” what is reflected in the Treaties and “it cannot be ruled out that Germany should be responsible for this in certain circumstances and that this would give rise to the budgetary responsibility it generates ”, it is indicated in one of the paragraphs of the communication.
Thus, the magistrates understand that if the provisional order of suspension of the own resources legislation were issued while the main proceedings of the complainants were being developed, there would be a delay that “would affect the economic policy objectives. The associated disadvantages could also turn out to be irreversible as well, given that the Next Generation EU development instrument is intended to deal with the consequences of the covid-19 pandemic “and measures must be implemented in a relatively short period of time.”
On March 26, the Constitutional Court based in Karlsruhe temporarily halted the ratification of Germany, prohibiting the federal president, Frank-Walter Steinmeir, from stamping his signature (the decisive one) on an authorization that had previously been validated by the Bundestag and the Bundesrat ( federal council of representation of the states). The decision was adopted after a complaint that the historical margin of indebtedness (to cover affordable loans but also direct subsidies) that was granted to the European Commission contravened the EU Treaties, according to a group supported by more than two thousand citizens.
The European Commission can only issue bonds (its forecast is that it will begin to do so around June) to defray the capital of the fund after the 27 have ratified the formula. Brussels would go to the markets in search of an average of 150,000 million euros per year until 2027.
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