Tuesday, the German Constitutional Court in Karlsruhe, the Bundesverfassungsgericht, held its hearing to decide on a temporary injunction to the German President, to enjoin him from signing the ESM and Fiscal Pact ratifications, before the court has decided on the case as such.
Before the noon break, the Court President, Andreas Vosskuhle, told the government representatives to do a "little homework" for the afternoon session. They should answer the question, whether the ESM will not at some point turn into "a systemically relevant bank," into which ever more money has to be pumped, to save Europe.
Otherwise, Vosskuhle in his opening remarks said that even in extraordinary crisis situations, the Constitution cannot be set aside (which the Carl Schmitt ideologues won't like to hear). He described the dilemma, since the signature on the treaties means that such international treaties cannot be taken back once signed, even if the court later finds that they contravene the Grundgesetz, Germany's Constitution. However, you might also have to consider headlines such as "Euro Rescue Stopped," if the court decides to hand down an injunction. Therefore, everything has to be weighed carefully. He indicated that the court might take more time than the usual three weeks for such summary procedures.
In the extensive hearing, several plaintiffs spoke, such as Constitutional Law Prof. Dietrich Murswiek (for MdB Peter Gauweiler) and Prof. Karl Albrecht Schachtschneider for the professors group, and also the government representatives, among them German Finance Minister Wolfgang Schäuble. Schäuble again depicted dark consequences if the signature is held up any longer, with those speculating on the euro's disintegration gaining new momentum, and he warned of a systemic risk.
The Financial Times Deutschland singled out Schachtschneider as possibly delivering the quote of the day, when he said, "After all, the euro rescue is not that important!" He called upon the court to "do a good work" and "free Europe from the suppression by the euro," which the Court's President smiled at, and replied, "Our task is not to do good works, but to rule on laws." Well, that could be the same thing, after all.
(The first-hand reports by our correspondents on the ground, are in the accompanying slug.)
Also adding to the pressure, today, in FAZ, Professors Hans-Werner Sinn and Walter Krämer, the initiators of the Appeal against a Banking Union, which now has over 200 signers, addressed their critics. They strongly reject the accusation that the public was misled by their appeal, by quoting from the text of the Brussels Summit Declaration, which says clearly that the ESM could directly capitalize banks when there is functioning European control. They reiterate that the ESM secures not only debts of nations but also debts of banks. Furthermore, the fact is that the preliminary limit for the ESM's volume is also not any safeguard, because the mechanism to increase it is already there. And this will be used, as we know from the history of the euro.
The financial markets were jubilant about Germany's willingness to ante up for their losses. This should be of as much concern for German citizens as it is for the signers of the appeal, the two professors say. Political declarations about rules and conditions in Europe are worth very little: "First we are persuaded by the placebo of political limits and rules of conduct, to take out our wallet, and once it is on the table, we are pressured to give up the political barriers... This game has now been repeated so often, that we cannot understand where the German government and some of our colleagues get their confidence that this time it could be any different."