All eyes are on the Constitutional Court in Karlsruhe because its preliminary decision could indicate how the court will decide on the broader issue of the laws' constitutionality. The tension was tremendous before and during the hearing; in the run-up, warnings came from Brussels and Berlin, should the judges declare the tools to rescue the euro to be unconstitutional.
In this preliminary hearing, judges assessed which of two offences would be greater. If the measures were stopped temporarily, only to be determined compatible with the demands of the constitution, it could send financial markets into chaos in the meantime. But if the ESM and fiscal pact were to be initially ratified, but then be found to contradict the German constitution, they would already be counted as unbreakable international treaties.
Such decisions based on prognoses are difficult, said Andreas Vosskuhle, the head of the Constitutional Court, in his introduction at the hearings. He noted that the Constitutional Court is obligated to respect the assessments of legislators. And, Vosskuhle continued, that respect is particularly important in cases concerning the constitutionality of laws on international treaties bearing great political significance.
In addition to practical considerations involving the markets, Karlsruhe will have to uphold basic democratic principles. Opponents of the ESM say it undermines the EU's bailout principles, which specify that no State must answer for the debt of another. In addition, States could have to offer bailout funds indefinitely because the ESM contract stipulates that the ESM's central committee can independently increase the present funding capacity of €700 billion.
Critics point out that the wording of the ESM agreement suggests it cannot be terminated. They have also expressed concern about provisions in the fiscal pact giving the EU far-reaching influence over national budgets. Taken together, opponents say these measures would decrease the autonomy of individual nations and parliaments when it comes to establishing their budgets.
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