Euro bailout fund: Federal Constitutional Court declares EFSF special panel to be largely unconstitutional

According to a judgment handed down by the Federal Constitutional Court on 28 February 2012 decisions about financial aid for eurozone member states may not in principle be made by a special panel of the German Bundestag. In their decision, the Karlsruhe judges found the complaint filed by two MPs against the transfer of decision-making powers relating to the euro bailout fund EFSF from the Bundestag to the special panel – which currently consists of only nine MPs – to be well-founded on balance. The Federal Constitutional Court had already issued a temporary injunction banning the panel from taking any decisions on 27 October 2011, and has now in essence confirmed this on the merits. Gleiss Lutz represented both MPs throughout the proceedings.  

The Constitutional Court emphasised that the Bundestag essentially fulfils its representative function through all of its members and not through individual members or a group of members. The EFSF special panel would exclude the MPs not represented on the panel from key decisions affecting the German Bundestag’s overall responsibility for budgetary policy. The Court found that it was only when it came to the EFSF buying government bonds on the secondary market that the special panel would – as an exception – rightfully have the power to make decisions, given the particular degree of confidentiality required.  

The following team of Gleiss Lutz lawyers was involved in the proceedings: Prof. Dr. Christoph Moench (partner, Berlin), Prof. Dr. Michael Uechtritz (partner), Dr. Thomas Krappel (both Stuttgart) and Dr. Marc Ruttloff (Berlin, all administrative).