Corona reconstruction fund of the EU: Constitutional complaints fail in Karlsruhe

Germany is allowed to participate in the multi-billion euro Corona reconstruction fund of the EU. The Second Senate of the Federal Constitutional Court in Karlsruhe rejected two constitutional complaints. But he expressed concerns.

According to the Federal Constitutional Court, the fact that the EU has taken on debt in order to cope with the economic consequences of the coronavirus pandemic in the member states is permissible. The federal government and Bundestag were therefore allowed to approve the EU decision, with which a total of 750 million euros in loans were taken out. The constitutional court rejected an urgent application in April 2021.

“The 2020 own resources resolution does not obviously go beyond the current integration program of the European Union and does not affect the overall budgetary responsibility of the German Bundestag,” the Second Senate of the Constitutional Court stated in its ruling.

Use should be earmarked

In the event of a crisis, the EU may exceptionally raise money on the capital market itself. However, the court did mention one restriction: the funds should only be used to deal with the pandemic. According to EU specifications, however, the member states should use a large part of the aid money for digitization and climate protection projects.

In 2020, the heads of government of the EU decided on a reconstruction fund called “Next Generation EU” and authorized the EU Commission with the so-called own resources decision to take on debt on the capital markets itself. In March 2021, the CDU/CSU, SPD, Greens and FDP approved the decision.

Germany is the largest net contributor

The money is distributed to the member states according to quotas – countries such as Italy and Spain that are particularly hard hit by the corona pandemic receive the largest sums. A total of 360 billion euros will be issued in loans to be paid off by 2058. 390 billion euros are grants that the member states do not have to pay back.

Germany expected grants of almost 26 billion euros net – but according to calculations by the Federal Court of Auditors, it is the largest net contributor with 65 billion euros. The authority had spoken of a “watershed in the European financial architecture” and warned of risks for the federal budget.

Constitutional complaint by Lucke

An alliance around the economics professor and former AfD politician Bernd Lucke and the entrepreneur Heinrich Weiß had each filed a constitutional complaint. They argued that the approval of the Bundestag and the federal government was unconstitutional.

In her opinion, the reconstruction fund is outside the EU treaties, according to which the EU would have to finance itself from its own budget. They also saw the danger that Germany would have to take responsibility for other member states if they became over-indebted – but that too was ruled out in EU treaties.

With information from Klaus Hempel, ARD Studio Karlsruhe

File numbers: 2 BvR 547/21 and 2 BvR 798/21