Hello! This week has seen the rise of the spy, leading EU leaders to express their unease at the level of surveillance the US Prism programme has carried out. Elsewhere, Cameron has made a surprising statement that does its best to reject the hard line Eurosceptics of the Conservative Party. There’s also been an important judgment from the ECJ in regard to national security and the rights of the individual under that pesky 2004/38 Citizenship directive. But first, a look into the clash between the infamously vocal constitutional court of Germany and their hearing in regard to the legality of actions by the European Central Bank. Don’t forget to check out the next installment of our new feature: the Tiny European Country of the Week!
Bundesverfassungsgericht: The ends don’t justify the means, EU
The hearing into whether the ECB’s bond-buying programme was legal began this week and has been peppered with strong statements from each side. The main players have been the German finance minister, Wolfgang Schäuble, a member of the ECB’s executive board, Jörg Asmussen, and the head of the Bundesbank (the German state bank) Jens Weidmann. The case concerns Mario Draghi’s promise of unlimited intervention into the economies of the eurozone countries by allowing the unlimited buying of bonds of a eurozone government who is financial trouble.
Wait! Please explain!
Like most financial stuff, this is quite confusing:
- The head of the ECB, Draghi, created a controversial policy called ‘Outright Monetary Transactions’ (OMT) in his bid to help struggling eurozone countries. It had also been said that the ECB plans to buy bonds of countries rumoured to leave the eurozone.
- The OMT policy allows the ECB to buy bonds (basically an IOU from the country to the ECB) eurozone governments. The money they exchange for the bonds goes to the government and helps their finances. The troubled country must adhere to strict conditions set by the ECB.
- The ECB bought bonds to the tune of 1.1 billion euros in Spain and Italy and has said that it helped ‘keep their heads above the water‘, though this is not under the OMT scheme.
- No bonds have been bought under the OMT scheme yet and the details of the policy are yet to be published.
- The claimants consist of more than 35,000 people, ranging from left-wing and conservative politicians to pressure groups. In this case, the group is supported by the Bundesbank. This group have challenged every action Germany has taken to contribute to the finances of eurozone countries.
- The claimants argue that the OMT policy is illegal because it is tantamount to directly financing governments, which is not within the ECB’s mandate.
- They also argue that it is an undemocratic use of German taxpayer’s money, as Germany is one of the biggest shareholders in the ECB.
- They fear that if the ECB buys loads of bonds in a country and that country defaults, the ECB will be left with massive losses and it would need to seek recapitalisation, ruining its financial reputation in the process. Germany would be the first port of call for the ECB to get more money, considering its status as a shareholder
- The biggest problem is that the German constitutional court, though the self-declared arbiter of the EU under its kompetenz-kompetenz principle, does not have jurisdiction over the actions of the ECB.
- The case has called into question the openness of the ECB’s powers and whether they should be debated. If the court decides that the ECB’s mandate must be changed, this would require a change to the TFEU.
- The verdict will not be given until after the German general election in September.
ECJ grapples with immigration: C-300/1 ZZ v Secretary of State for the Home Department
Rules on the use of secret evidence in the SIAC
- ZZ was an dual Algerian and French citizen who was entitled to travel and reside in the UK under the citizenship rules. He married a UK citizen and was resident in the UK for over a decade.
- After travelling to Algeria, ZZ was refused entry into the UK and excluded from the UK in a decision made by the SIAC on the grounds of national security, which is legal under the citizenship directive as long as the proper procedure is carried out.
- The evidence used against him in the SIAC was kept secret, thus ZZ argued that the procedure under the directive had not been followed.
Held, that national security procedures are not an excuse to ignore procedures under EU law. It says very clearly that just because the case dealt with state security does not mean that European law is inapplicable (Italy tried to have the case thrown out solely on the basis that it dealt with national security). The court emphasised that restrictions of citizen’s rights must be kept to what is strictly necessary.
Cameron is nice about the EU
World is shocked
That may be an over-exaggeration, but Cameron made a speech whilst at a construction site this week emphasising the benefits the UK has as a member of the EU. He mainly stressed the economic benefits and the UK’s ‘considerable negotiation heft’ the EU gives when influencing the global economy. He also said that he wants a place at the ‘top table’ in negotiations on global topics in order to stand up for the UK’s interests. His words have been seen as a rejection of the vehemently Eurosceptic section of the Conservative Party.
Meanwhile, the wording of the proposed in/out referendum on EU membership has been changed from ‘remain’ to ‘be’ in the EU, after fears mounted that the former could lead to a unfairly favourable result.
EU demands answers from US on privacy
Vice president sends letter
In response to The Guardian‘s scoop that the US has carried out a massive surveillance programme on its citizens, with speculation that the UK’s GCHQ also had access to the techonology, EU officials have asked the US to make ‘concrete’ guarantees that the privacy of EU citizens’ has not been breached. The vice president of the European Commission, Viviane Reding, has sent a letter containing seven detailed questions for the US to answer in regard to the extent of its Prism surveillance. The questions included: ‘are Prism and other similar programmes aimed only at the data of US citizens and residents, or also – even primarily – at non-US nationals, including EU citizens?’ and ‘what avenues, judicial or administrative, are available to companies in the US or the EU to challenge access to, collection of and processing of data under Prism or other programmes?’. She hoped they will be answered before the EU and US leaders meet in Dublin on Friday.
Meanwhile, Eurativ reports that EU institutions websites have been collecting data on visitors in breach of its own rules on data protection.
Continental news round-up
The national broadcaster of Greece was shut down this week in a display of austerity by the Greek government. A large public media strike was carried out in response, bringing many services to a halt last Thursday and the Greek court has declared the signal for the broadcaster to be turned back on by the government.
The European Commission has voted to bring an end to mobile phone roaming charges within the European Union in a move pursuant to the single market. Now roaming charges will be consistent across all Member States from 2014, it is proposed.
Silvio Berlusconi has made some statements against the austerity policies imposed by the EU, declaring: ‘do you want to throw us out of the single currency? Go ahead.’
Turkey has been battling weeks of protests in its largest city, Istabul. The protests began against a planned redevelopment of a prominent park, and have snowballed into anti-government protests. The government are now considering bringing in the army to control the protestors.
Tiny European Country of the Week
Here’s some amazing facts about Luxembourg! Hurrah!
Official Name: Grand Duchy of Luxembourg
Location: Sandwiched between France to the south, Belgium to the west and Germany to the east.
Official languages: French, German and Luxembourgish.
Economy: According to the IMF, it was the second richest country in the world in 2011, with traditionally low unemployment and the financial sector dominating its output.
Political status: Member of the EU and eurozone
Fun fact: Its country motto is the stubborn-sounding ‘We want to remain what we are’ and it sells the most alcohol in the whole of Europe.
What’s the deal with… Wolfgang Schäuble?
It’s the moment you’ve been waiting for! Let’s find out about the prominent German Minister of Finance:
Name: Dr Wolfgang Schäuble MdB
Nationality: German, born in Freiburg im Breisgau in southern Germany
Occupation: Federal Minister of Finance
Education: Studied law and economics, doctorate in law.
Previous occupations: Federal Minister of the Interior, chairman of the Christian Democratic Union (predecessor of Angela Merkel)
Political leanings: Member of the CDU, Merkel’s centre-right party
- member of the German parliament, the Bundestag, since 1972
- resigned the chairman of the CDU and as an MP after a financial scandal in 2000, when the party accepted illegal party donation of 100,000 Deutschmarks and it was uncovered that they had secret bank accounts.
Interesting facts: He has many controversial political views, including the removing of the presumption of innocence when carrying out counter-terrorist measures, the view that migrants in Germany should not be allowed to have dual citizenship and he encouraged newspapers to print the contentious cartoons depicting the prophet Mohammed in 2005. He was the subject of an assassination attempt in 1990 which left him paralysed.
The ELB is written by Associate Editor of TSL, Natalie Hearn. Law Graduate from the University of Birmingham, prospective EU Law Masters student at UCL, currently teaching English in Japan. Follow her on Twitter: @ninjahearn