Hurdle for Stability Mechanism: Euro Proposal Could Face Constitutional Concerns in Germany

The planned permanent euro rescue fund may soon run into unexpected problems in Germany. Due to fundamental questions as to whether the fund is consistent with Germany's constitution, Chancellor Angela Merkel's government may need a two-thirds parliamentary majority in order to sign on to the plan.

A report by the legal research department of Germany's federal parliament has concluded that the so-called European Stability Mechanism (ESM) incurs significantly on the parliament's sovereignty in domestic legislative decision-making. German law requires a two-thirds majority for adjustments to its constitution. As such, Merkel's coalition -- comprised of her conservatives paired with the business-friendly Free Democrats (FDP) -- would be reliant on significant support from the opposition.

In their report, the Bundestag legal experts identified a number of concerns about the constitutionality of the ESM, which is intended to go into effect in 2013. News of the developments emerged in a letter, which has been seen by SPIEGEL, from FDP finance expert Frank Schäffler to his party's parliamentary group.

'A Core Area of Democratic Life'

Schäffler stated that the permanent euro rescue package would be an incursion into the right of the German parliament to determine Germany's budget, a "core area of democratic life." Through the rescue package, the study concluded, the "decision-making freedom of future legislators could be limited."

In mid-December, leaders of the European Union member states agreed to make changes to the treaties that govern the bloc in order to establish a permanent euro rescue fund. At the time, Merkel's government pushed for a simple amendment to the Lisbon Treaty that would make ratification easier and not require the kind of referenda that led to the rejection of a European constitution. That rejection protracted the negotiations that ultimately resulted in the Lisbon Treaty in 2009.

Now, however, it looks as though Germany could become the stumbling block for the stability mechanism. A two-thirds parliamentary majority, after all, is far from certain.

Germany's Constitutional Court is also currently reviewing several constitutional complaints against the billions in aid for Greece and the establishment of the European stabilization fund. And the number of complaints could soon rise. Critics claim that by paying into a fund to bail out other European countries transforms Europe into a "transfer union" in violation of the Maastricht Treaty, which provided the basis for a secure common currency.