Wolfgang Streeck - Why the Karlsruhe court is right

"Those who want the EU to be sovereign are free to ask for a formal revision of the treaties, followed by a referendum where this is constitutionally necessary to make changes to the treaties effective. Federalism, why not - but please in the sunlight and not as a side effect of the policies of the ECB, approved by the activism of a European court, "writes the great German intellectual Wolfgang Streeck on the judgment of the Karlsruhe Court. For Streeck the sentence of the German Constitutional Court will have far-reaching effects and for German politics the hour of truth is coming. An excellent Wolfgang Streeck from Makroskop

The ruling on the PSPP (Public Sector Purchasing Program) of the Federal Constitutional Court showed another rift in the structure of the European Union, namely that between legal systems with a different conception of the Constitution. There are strong parallels with the case of the United Kingdom, where the EU model, according to which a constitution is modified step by step by a court of last resort, has clashed sharply with the British tradition of strong parliamentary governance , which contributed to Brexit.

In the conflict between the German Constitutional Court and the European Court of Justice (ECJ), we are witnessing a battle between two powerful courts of last resort, a conflict which essentially concerns only one fundamental question, namely: the EU is an organization international or a federal state?

A prominent position that is part of the post-war political heritage

The strong position of the German Federal Constitutional Court is an essential part of the post-war political heritage. It is comparable to the provisions of the Basic Law according to which German troops, even if they are under international command, cannot be deployed without a strictly defined parliamentary mandate. Both provisions severely limit the discretion of the federal executive and both are not easily reconciled with another constitutional obligation of the German government, namely: to pursue international cooperation as a national goal.

In general, the far-reaching powers attributed to the Federal Constitutional Court may represent a somewhat uncomfortable restriction on the ability of German governments to act, both in foreign and domestic policy. And in fact it is just like that, even if at times considering the Constitutional Court as a potential spoilsport can improve our country's international negotiating position. On the other hand, the Court usually does its best to meet the incumbent governments.

And this is the case of the PSPP, in which the Bundesbank was not prevented from participating in the ECB's bond purchase program. What the court insists, however, is its decision-making power, regarding the fact that the acts of the German state organs, in particular the Bundesbank, may violate the basic democratic and political rights of German citizens, as they are not covered neither by German Basic Law nor by international law through treaties legally ratified by the German state.

Even under pressure from a crisis, constitutions cannot be ignored

The effects are far-reaching. While adhering to its constitutional mandate, the German Court, in fact, insists that the EU, the ECB and the European Court of Justice cannot in any way extend their jurisdiction to the rights of German citizens guaranteed by the German Constitution. Although this may seem trivial, it implies that the European Union is not (yet) a federal state, but still depends on whether its Member States have given it certain powers. (One of the judges a few days after the verdict said in an interview with a newspaper: "until we live in a European state, the accession of a country is subject to that country's constitutional law").

The ruling also implies that constitutions - including the de facto EU constitution - cannot be changed incidentally. Nor can they be ignored under the pressure of a crisis, according to Carl Schmitt's notorious saying: "the emergency is the hour of the executive", not to mention the equally notorious German saying: "necessity knows no commandments".

Anyone who wants the EU to be sovereign, the court says, is free to request a formal revision of the treaties, followed by a referendum where this is constitutionally necessary to implement the changes to the treaties. Federalism, why not - but please in the sunlight and not as a side effect of the crisis management by the ECB, sanctioned by an activist European court. (Of course, a federal revision of the treaties, in fact any revision, can be ruled out both today and in the near future - also due to the heterogeneity of the interests of the current 27 Member States, none of which, in particular the Mediterranean countries , they want to renounce their sovereignty).

Questions on the true nature and true purpose of the EU

It is interesting that commentators, both left and right, do not understand how great the embarrassment for the German government has been after the decision on the PSPP of the Federal Constitutional Court, just when Germany is preparing to take over the presidency of the EU in the second half of the year. So to cool the excitement of international rhetoric over Germany's alleged thrift, the German state, in order to confirm its European hegemony, will end up paying the EU coffers far more than its somewhat worried voters would have ever granted. Even worse, the ruling raised the question of all issues, the question that European governments have learned to avoid, namely: what is the true nature and purpose of the EU?

For the German political class, the temptation to use European protests against the Federal Constitutional Court to downgrade its rank within the German constitution must be enormous. This would greatly expand the political reach of the executive and would certainly be consistent with a general trend present in capitalist democracies, with notable parallels similar to developments in Poland and Hungary, for example. A reduction in the powers of the Federal Constitutional Court, however, would not be easy as its reputation in German public opinion remains high.

Constitutional reform as a gift for the European Council?

A constitutional change that turns the Federal Constitutional Court into a second instance court subordinated to the Court of Justice, however, could have possibilities. Especially if you manage to give the impression that this could somehow help against Coronavirus and the subsequent economic catastrophe. The two-thirds majority required in parliament could also be found, with the SPD and the Greens replacing the CDU / CSU MPs who would refuse to make this change. Wouldn't that be a nice gift from Merkel to the European Council when Germany takes over the Presidency of the Council of the EU on 1 July 2010?

A downgrade by the German Constitutional Court should also be welcome for those who - like the German philosopher Jürgen Habermas - are calling for the establishment of a European army as a vehicle for creating a European state. The need to receive a mandate from the Bundestag often turned out to be a problem, especially when Germany was asked to provide troops for "missions" in places like Iraq, Libya, Syria, Mali or Afghanistan. Without the Constitutional Court, at least as regards foreign policy and international cooperation, it would have been much easier for the German government to ignore the concerns of parliamentarians.

Ursula von der Leyen, currently in the presidency of the European Commission, in her previous position as German Defense Minister on more than one occasion will have found herself unable to do a favor to the Americans or the French because of the foreseeable objections of the Bundestag. As President of the European Commission, without the German Constitutional Court, he would finally be able to build European military "cooperation", for example to control the former French colonies in West Africa.

Violation of "European sovereignty"?

In any case, immediately after the announcement of the Court's decision, Green Members of the European Parliament asked the Commission to open a formal infringement procedure against Germany - presumably in the name of German constitutional patriotism - although the German government has not did nothing to implement the sentence, and it is not even clear if he will ever do so. Von der Leyen, a longtime Merkel loyalist, followed suit by expressing concern that other Eastern European countries such as Poland might feel encouraged otherwise not to comply with ECJ decisions. On that occasion, he described the PSPP ruling as a violation of "European sovereignty".

Infringement procedures take time and, in any case, some Member States will wonder what this would mean for their sovereignty if the EU were to manage to claim sovereignty for itself. Perhaps they will wait until the last minute, hoping that the Germans will take charge of the consequences of the conflict. In all likelihood, the process will end or not even begin if, in return, Germany agreed to pay more money into the next European budget, perhaps after slaughtering its Constitutional Court as a sacrificial lamb on the altar of Europeanism.

Whatever happens, you can bet on two things. First, the German government will find a way to give the ECB the possibility of continuing to "do everything possible" to keep the euro alive. (Whether this will eventually succeed is another question.) The euro is the German gold mine par excellence, while it is not at all clear why Italy, Spain and France have such a strong desire to keep it, for Germany in this long phase of capitalist stagnation it is a lifeline.

Secondly, even if the ECB, the EU budget, the European Investment Bank and all the others, thanks to the injections of European money and the skilful staging of an alleged German capitulation, still continued for several years to find the means necessary to maintain and forage the political classes of the southern periphery of the eurozone which is now in decline, this would not in any way stop the economic devastation of the Mediterranean countries. Because this is structural in nature, and is rooted in the renunciation of monetary sovereignty of the Mediterranean countries and is so profound that it cannot be resolved through those transfers that German governments could afford both economically and politically.

The result will be growing inequality between monetary union countries and within countries, and will be accompanied by steadily growing international hostility. The hour of truth is approaching for the empty promises made by the Germans in the past, made with the irresponsible hope that they should never be kept. Disappointment will deeply poison European politics.

What do German statistics say about coronavirus deaths?

In Germany there were more deaths from the 2018 flu wave than from the 2020 coronavirus pandemic. We are not on a conspiracy or denial blog, but data in hand is what emerges from the preliminary surveys released a few days ago by the Federal Statistical Office.

The German Statistical Office published data on deaths in Germany until the end of April on 22 May. According to what was declared by the institute of statistics, these are not definitive and therefore not necessarily complete data.

Data (preliminary) shows that the wave of coronaviruses caused different fluctuations compared to the mortality recorded in previous years.

In 2020, up to the 17th calendar week, 328,209 people died, i.e. 1,250 more people than in the same period of 2019 (326,963). In the same period of 2018, 354,924 died in total, 339,910 in 2017 and 312,246 in 2016.

The German statistics office writes about:

"When considering the trend of mortality in the statistics, it is necessary to take into account the typical fluctuations related to the period of influenza from mid-December to mid-April. This becomes clear when looking at the data from previous years: in March 2019 for example, around 86,400 people died. In March 2018, i.e. in a year in which the flu was particularly severe, deaths were 107,100. Even without the pandemic caused by the coronavirus, in the typical period of the flu, the number of deaths can vary considerably The number of deaths in the age group over 65 is particularly affected by these fluctuations.

According to preliminary mortality data, the effects of the flu wave in 2020 were very mild compared to previous years. According to the preliminary count, in fact, in January 2020 about 85,150 people died. In February 2020 there were 79,600 deaths. Even in March 2020 with a total of at least 86,600 deaths, the monthly increase shows that there has been no significant growth in the number of deaths compared to previous years.

However, since the last week of March, death numbers have been higher than the average for the years from 2016 to 2019. This upward deviation peaked in the 15th calendar week (from 6 to April 12). In the sixteenth and seventeenth calendar week, however, the number of deaths decreased significantly compared to previous weeks, however deaths remained higher than the average of previous years.

Kalenderwoche	Media 2016 - 2019	2018	2020	Differenza 2020/Media 2016-19
KW1	19339	19342	18845	-494
KW2	19593	18770	19394	-199
KW3	19524	19187	19119	-405
KW4	19855	19171	18896	-959
KW5	20366	19558	19716	-650
KW6	20319	20086	18944	-1375
KW7	20636	21254	19541	-1095
KW8	20988	22888	18850	-2138
KW9	21532	25535	19345	-2187
KW10	21288	26777	19501	-1787
KW11	20440	24385	19695	-745
KW12	19555	22777	19527	-28
KW13	18939	20906	19494	555
KW14	18480	20038	20368	1888
KW15	17893	19165	20144	2251
KW16	17357	17992	18856	1499
KW17	17407	17093	17974	567
Totale	333511	354924	328209	-5302

Why are Germans so afraid of the transfer union?

After the agreement between France and Germany on the recovery fund, the conservative press targets the German Chancellor accusing her of having paved the way for the dreaded transfer union with southern Europe and of not having taken into account the real German interests. If Merkel on the Recovery Fund is serious then it is also likely that she has no intention of applying again, because very hard attacks come from the popular and conservative press. For once, perhaps, the German government has preferred history books to polls on the latest election trends. Four reflections on the Franco-German agreement from FAZ, Tichys Einblick, WirtschaftsWoche, and Focus.

 

Also the Frankfurter Allgemeine Zeitung, newspaper with an almost always pro-Merkelian line, in a comment published in recent days, the co-director Berthold Kohler expressed strong doubts about the political sustainability of the transfer union:

(...) Because even those who would like to empty the nation states overnight by depriving their organs of all power even to the supreme courts, in reality are only damaging the European ideal. You can also go into raptures over the fact that the Merkel-Macron plan has laid the "foundation stone of a new Europe" - but European peoples still live very happily in their splendid and ancient constructions, the nation states. Which are also the home of democracy. There, the sovereign people still have a greater and more direct influence on political decisions than in Brussels. Even the feeling of belonging to a common destiny, for which sacrifice when circumstances make it necessary, remains much stronger in the nation states.

The biggest flaw in the unification process

There is still no such feeling of unity at European level. And this is the biggest lack of the integration process. The Germans are certainly not happy to have to pay the "Soli" (solidarity tax with the east) since the time of reunification, but they still pay it diligently. If a German politician asked for a similar contribution of solidarity for Spain or Italy he would experience a perfect "shitstorm", even if in truth many Germans would prefer to live in Tuscany rather than in Sachsen-Anhalt.

However, European identity cannot in any way compete with the sense of community that exists in national states, which did not emerge only in the times of nationalism, but was born as a form of clear demarcation from other peoples. In a world of limited resources, therefore, every act of financial aid that involves a donor waiver must have an even greater justification, for example, of the financial equalization between the German regions.

The biggest flaw in the unification process

Because even in a country well disposed towards integration, such as Germany, if the citizens had the feeling of being relegated forever to the role of the paying officer, the mood could change quickly. It would be foolish to think that in the name of the economic and political advantages offered by European integration, the Germans can only declare "solidarity" to the tune of billions of euros. Even if the value of peace and prosperity guaranteed by a Europe without borders could be transformed into numbers, solidarity is not the result of an account of profits and losses, but a matter of attitude and feelings. And in Italy, France, Spain and other European countries they should not forget that the Germans also have feelings, especially when indignation against the alleged non-solidarity Teutons ignites.

On WirtschaftsWoche instead Malte Fischer hopes, like many millions of Germans, that the Frugalist countries, led by Austria and Holland, will eventually succeed in establishing themselves on the Franco-German duo:

(...) With the reconstruction fund, Macron has further approached its goal of transforming the EU, thanks to a very effective propaganda on solidarity in terms of taking on the public opinion, pushing it in the direction always wanted and sought from France: from a community of self-responsible states to a transfer union that develops state power determined by the French's ambitions for power and financed by Germany as the main source of the transfers. The issue of own bonds, through which the EU can borrow money for the first time as if it were a state, is also a step towards the supranational state that European elites have always dreamed of.

German taxpayers will have to pay dearly for the fact that Merkel has decided to give the green light to an EU transformation into a transfer union. The argument that transfers from Germany to "Italy and Co." they would serve to guarantee the important export markets from an economic point of view and would therefore be in Germany's interest should not deceive us. If the argument were true, then Germany would also have to transfer resources to the United States and China. Definitely insane. In any case, the argument from the economic point of view is similar to the attempt of a sandwich kiosk owner to increase sales by giving his customers banknotes so that they can then buy his sausages.

Such a voodoo economy in Berlin's political circles could also dazzle someone. German taxpayers, however, must not be fooled. All that remains is the hope of the opposition from Vienna or The Hague. There they are certainly not enthusiastic about Macron and Merkel's initiative. The Austrian Prime Minister Sebastian Kurz, in fact, after consulting his Dutch colleague, immediately announced opposition to Macron's plan. Together with Denmark and Sweden, both countries insist that money from the reconstruction fund should only be granted in the form of loans. Therefore both countries will shortly present an alternative proposal.

Machiavelli's followers of southern Europe have not yet reached their goal. Especially since the establishment of a reconstruction fund has to be decided unanimously by all 27 EU countries. For German taxpayers, therefore, we cross our fingers hoping that Austria and the Netherlands remain to represent the interests of net contributors, for whom there are apparently no supporters in Berlin.

Also on Tichys Einblick, the great German intellectual and publicist Klaus-Rüdiger Mai goes down there and attacks Merkel accusing her of having ignored the real German interests:

(...) Put simply, this means that the northern countries, in particular Germany, will finance Spain, Italy and France, and this is because a situation of serious financial difficulty would be a disaster for the French banks, heavily invested in Italy . At this point it should be remembered that the average wealth of the citizens of "rich" Germany, according to an analysis by WELT, is lower than the average wealth of the citizens of Italy and France, but it will be the citizens of "rich" Germany who have to pay for the want to spend Merkel's money.

But if you know that Macron is from the French financial sector, then you also know what interests he is representing. However, the German taxpayer will have to shell out money to cover the crisis in the French financial sector in the decades to come. The German Chancellor accepted this plan - and nothing else - in a summit with the French president.

Never before in the history of the Federal Republic had a Chancellor ignored German interests in this way, had shown so little empathy for the lives of citizens, for the prosperity of the nation and for the happiness and future of our children, as it is doing now Angela Merkel. Never before in German history has a Chancellor renounced the sovereignty of Germany by borrowing enough to weigh heavily on the country and its citizens for generations, leading us only to economic ruin and impoverishment. Macron's dream of the European champions, who will be the French champions, will break the backbone of German small and medium-sized enterprises. However, they will be called upon to finance this dream

At the moment, German citizens can only hope for indefinite resistance from the heads of government of Finland, the Netherlands and Austria. But perhaps even this hope is only an illusion, because it could also be that these states would renounce their reservations if the Chancellor declared that Germany would take responsibility and share the reimbursement for the three states. Sure, it's an absurd idea, but hasn't absurdity become reality in recent years and reality hasn't become absurd?

Obviously, Focus could not miss, which with a comment by Hugo Müller-Vogg stands decisively against any form of transfer union to the detriment of the industrious and diligent German taxpayers:

(...) Italy, on the other hand, has allowed the last few very positive years to pass without doing anything to restore its disastrous public finances. At the same time, private wealth in Italy has reached new highs. According to Credit Suisse calculations, Italian private wealth is 5.5 times the GDP. In Germany, however, private wealth is only 3.8 times the GDP. This also has to do with the fact that no Italian government tries seriously to collect taxes with the same meticulousness with which the German tax authorities do.

And the result is grotesque: the Germans are poorer than the Italians - based on their per capita wealth - while the German state financially is much stronger than the Italian one. Consequently, the "poor" German taxpayers should support the "poor" Italian state. While the wealthy Italians prefer to invest their financial assets outside their borders.

Merkel and Macron lay the "cornerstone for a new Europe"

Emanuel Macron and Angela Merkel believe that the reconstruction fund represents "the cornerstone for a new Europe". Their new Europe will be like the previous one, and will have to rely on intergovernmental solidarity. Solidarity, however, should not be seen as a one-sided affair, that is, as the commitment of the economically stronger countries to the weaker ones. Solidarity, if correctly interpreted, also concerns the efforts of those who expect to receive help. Otherwise, dissatisfaction grows among those who have to help, which could also quickly turn into resentment.

The EU will support countries in difficulty, regardless of the name the funding instrument bears. If nothing changes in the other countries, it will happen that the German taxpayer will indirectly co-finance the social benefits that Germany itself cannot afford. Spain, for example, wants to introduce an unconditional basic income which we do not have. Italy misses billions of euros in tax revenues and leaves the retirement age at 65 (women: 60), while the German tax authorities intervene mercilessly and the Germans are moving towards retirement at 67.

France, in turn, guarantees employees the second highest minimum wage in the EU with € 10.14 per hour, which many companies can only pay thanks to state subsidies. German low-income workers, on the other hand, have to settle for 9.35 euros gross per hour. Macron would also like to get approval for his urgently needed pension reform, guaranteeing a minimum pension of 1,000 euros per month. Our minimum basic pension cannot keep up.

Citizens of donor countries have the right to have the solidarity of aid recipients

There is no doubt about one thing: the common market does not detract from Germany. In return, however, the Federal Republic has hitherto been the paying officer of Europe. German taxpayers have widely accepted this "exchange". In light of the economic upheavals caused by the coronavirus, the imminent bankruptcies and the business models in danger, however, the desire to show solidarity with other countries could be lost, especially if the beneficiaries were to lack the "attitude of those who receive solidarity".

Europe cannot function without solidarity. But citizens of donor countries also have the right to have the solidarity of recipients.

 

Why minijobs are a failure and why they should be abolished

They had explained to us that German minijobs were a good solution and that they also had to be imported into Italy. But with the arrival of the crisis, minijobs showed themselves for what they are: a form of wage dumping, not too different from the legalization of illegal work. David Gutensohn writes about it on Zeit.de

Before the crisis, more than seven million people in Germany had a minijob, a so-called "marginal job". Marginal (Geringfügig) for Duden is synonymous with insignificant, irrelevant or small. And just the irrelevant jobs, apparently were among the first to be affected by the Coronavirus crisis. In fact, only in March 224,000 minijobs were fired. The six-week notice period, which also applies to minijobs, has in many cases been ignored. The minijob-Zentrale speaks of a "significant decline" and in a few weeks it also foresees a second wave of layoffs. Minijobs are not crisis proof. The time has come to get rid of it.

Who has a monijob earns up to 450 euros per month without having to pay the above taxes. There are no costs for health insurance, for invalidity or unemployment insurance. And the payment of pension contributions is only on a voluntary basis. There is a decisive advantage for employees: gross wages often correspond to net earnings. Originally the minijobs - substantially reformed by the Schröder government in 2003 - were designed to contain undeclared work in families and private homes, for example for cleaning or private lessons.

4.4 million people depend on minijobs

Today, however, most minijobs in Germany do not work in private homes, but in hotels, factories and healthcare. For many of them, the 450 euro a month job is by no means a small extra income that they can easily do without. 4.4 million Germans, in fact, depend exclusively on the revenues of minijobs, and have no other job besides this. These include many students, single parents and retirees.

During the crisis, however, the great advantage of minijobs turned into a disadvantage: because minijobs do not pay any social contributions, they are not entitled to social benefits, neither to unemployment benefits, nor to unemployment benefits. If they lose their jobs, as is happening to hundreds of thousands of people, they have only basic security (Hartz IV). And the current crisis also shows that for employers in the end the minijob is not profitable: it is no coincidence that these workers were the first to be dumped. Contrary to popular belief, the minijob for employers is by no means cheaper than normal employment relationships. For a normal employee, in fact, the employer has to pay about 20% in terms of taxes and duties, for minijobs more than 30% in the form of a flat-rate tax. And this even if the minijobber is not entitled to the benefits provided by social insurance.

Full-time positions have been replaced with minijobs

At the same time, a number of employers have been able to exploit this construct. Companies seeking flexibility replaced their full-time positions with more minijobs, says social science researcher Stefan Sell of Hochschule Koblenz. The Institut für Arbeitsmarkt- und Berufsforschung also states that many minijobs eventually only served to replace full-time employees. For this reason, minijobs have long since become the target of much criticism. Instead of creating safer jobs, there are more and more underpaid minijobs. Instead of a full-time cashier, they put three mini-jobsber in many workplaces. Instead of hiring waiters correctly, restaurants prefer to hire three non-union students, who don't found a Betriebsrat and don't ask for wage increases.

In times of crisis, employers use this flexibility to reduce staff more quickly. And this is an existential threat, especially for those people for whom the mini-job isn't just a small extra income.

There are no wage increases

And minijobs also have another disadvantage: if wages rise in some sector, minijobs must still remain below 450 euros per month. This can only be done by reducing working hours. For this reason, for example, a number of cleaning companies earlier this year asked for minijobs to be abolished. Since January 1, wages for cleaning staff have risen. But since no one can earn more than 450 euros with a minijob, over 100,000 cleaners have had to cut working hours. If it had only been their salary that would have increased, they would have exceeded 450 euros and would have been subject to social security contributions. But due to taxes and duties there would be almost nothing left of that wage increase. Also for this reason, many employees in the catering sector, after increasing the minimum wage, had to reduce working hours.

The bottom line is that minjobs can be used to avoid wage increases. They replace regular jobs and in times of crisis represent a burden on employers. The time has come to give up on this working model. Experts such as Enzo Weber of the Institut für Arbeitsmarkt- und Berufsforschung and the Greens, for example, suggest replacing minijobs with jobs subject to social security contributions. And this is also the only right way.

Work should prevent poverty in old age

In order for people to have greater risk protection in the future, workers need to pay funds into social security funds so that they are entitled to future benefits. Jobs are needed to prevent poverty in old age, because with these jobs it will be possible to fill the social security funds. And there is also a need for another way of earning a second additional income, which is also tax-free and therefore attractive to retirees, students and single parents.

To make this possible, every hour worked must be covered by social insurance. At the same time, the state will have to subsidize those who make little money by giving up taxing these people, as it does for example for so-called midijobs. From 2019, in fact, it is possible to earn between 450 and 1,300 euros gross per month, with a low taxation and with few social contributions, which, however, grow as salaries increase. Contrary to mini-jobs, these jobs are crisis-proof: companies can apply for layoffs instead of laying off workers. In the end, everyone benefits.

H. W. Sinn: why the judgment of the Karlsruhe Court is right

According to Hans Werner Sinn, the judgment of the Karlsruhe Court on the purchase of government bonds is correct and above all reaffirms a very important principle: European integration must not be pursued neither by the ECB nor by the European Court of Justice, but by parliaments and national governments. Then he gives a suggestion to the Berlin government: be careful, because the French want to save their banks and make the transfer union with the money of the Germans, but they are not willing to share their atomic bomb and their army. First part of the confrontation between the two great German economists H. W. Sinn and Marcel Fratzscher on Handelsblatt

The protests of many commentators against the sentence of the German Constitutional Court, which accuses the European Court of Justice of having gone beyond its mandate, show us that in this case the wishes and the reality of the law are confused with each other with great ease . The hierarchy between the courts does not apply in general, but only in some areas.

It clearly exists for monetary policy issues, but not in other policy areas, in particular not for the overflowing fiscal bailout policy that the ECB has pursued in recent years through the printing of money. Indeed, pursuant to Article 5 of the Union Treaty, the ECB should have received specific authorization to do so. But it didn't happen.

There is no way to argue that the EU with its institutions is sovereign, as the President of the Commission believes, for example. From the point of view of the Treaties, in fact, Europe is still very far from the perhaps desirable statehood that would give the ECB and the European Court of Justice a level of power comparable to that of other countries or other confederations of the world.

The nation states in Europe are still the masters of the treaties and on the basis of these treaties, the highest courts of Denmark and the Czech Republic on other occasions have managed to declare ultra-vires some judgments of the European Court of Justice.

And when it comes to the dispute over the purchase of government bonds, it must be considered that the Fed has never purchased the government bonds of individual American states, which in Europe are instead the object of discord. When California, Minnesota and Illinois were on the verge of bankruptcy, the Fed didn't go to their rescue. By contrast, in the eurozone, the ECB allowed national central banks to acquire one third of the outstanding national government bonds.

This saved the holders of these government bonds from a capital loss and, despite the high level of debt, ensured the states of low interest rates which then led to much higher debt. In doing so, however, the ECB did not support economic policy as it would have been allowed to do, but it countered it by undermining the various tax and debt agreements that had been concluded to counter the growing public debt.

Even if the Bundestag wanted it, it would not even be able to approve with a two-thirds majority of the votes a treaty allowing the ECB to practice a state bailout policy that implies foreseeable losses for the taxpayers of the eurozone. The Federal Republic of Germany should rather be re-founded first and then a new constitution should also be adopted through a referendum. The EU and the Court of Justice have absolutely no means of being able to legally impose it.

It would also not be of much help to start an infringement procedure against Germany by the EU, because the German government would in no way be required to pay an EU penalty for ignoring a judgment of the Court of Justice. which instead the German Constitutional Court considers illegal. And of course the case could not be brought before the Court of Justice because it would be the subject of the procedure itself (nemo judex in sua causa). The consequences for the survival of the EU would be devastating.

The decision of the Federal Constitutional Court was necessary to clarify to all those involved that Europe is a legal community that cannot continue to develop through the broad jurisprudence of the European Court of Justice and not even through the decisions of a technocratic body such as the Governing Council of the ECB, but only through the nation states.

These sovereign states should therefore help each other and help countries that have been particularly affected by the crisis. First of all Italy, which had the highest number of deaths and was the first to be affected by the epidemic. In addition to the unilateral aid measures, which each state can decide independently and freely, states should increase the EU budget in order to guarantee special assistance to the citizens of this country and its hospitals.

And if this were not enough, according to the rules of the Club of Paris, a moratorium on the debt in favor of Italy could be decided, as in the case of Greece, connected to the control of the capitals, above all to contain the huge capital flight from the Italy to Germany and the United States observable since March.

Beyond that, European states should nevertheless endeavor to find an agreement to form a political union that effectively achieves the desired sovereignty. And this should not have in the first place the sharing of portfolios, but the sharing of European armies with everything that follows. A simple fiscal union would block the road to political union, because while some would give the money, others would instead keep the trump card of the military force for themselves.

Marcel Fratzscher - Why the Karlsruhe Court ruling is wrong

The great German economist Marcel Fratzscher, director of the prestigious Deutsches Institut für Wirtschaftsforschung in Berlin, on Handelsblatt replies to HW Sinn and explains why there is a need for a deep and definitive clarification between the Court of Karlsruhe and the ECB and why at this point the only way out of the institutional confrontation is through a modification of the European treaties. Wishes! Marcel Fratzscher replies to Sinn on Handelsblatt

Following the ruling by the German Constitutional Court on the work of the ECB, the European Commission is examining the possibility of opening an infringement procedure against Germany. This shows once again how explosive this ruling was. In addition to three serious economic errors, the ruling also contains legitimate critical points that must be addressed as soon as possible in order to defuse this creeping conflict which risks exploding at any moment, without however further weakening the euro.

The basic critical point raised by the Federal Constitutional Court is that the ECB's PSPP bond purchase program does not meet the proportionality requirement. The Court complains that the ECB's program would entail disproportionate costs for savers, for some companies and for other groups and would excessively assist governments in refinancing their public debt.

This accusation shows a decidedly insufficient understanding of the economy. A central bank can only fulfill its mandate to pursue price stability in a sustainable way if employment is high, growth is solid and the financial system is stable. In other words, a central bank will never be able to fulfill its mandate if zombie companies thrive, savers are expropriated and the banking system collapses.

The accusation is therefore a contradiction in terms. In short: it will be easy for the Bundesbank or the ECB to demonstrate the proportionality of monetary policy, as indeed they already do in their quarterly forecasts.

The second weak point in the verdict of the Court of Karlsruhe is the request made to the ECB not to pursue at all costs the objective of price stability provided for by the EU treaties, but to consider whether in any single case it is really worth trying to achieve this. target. It is ultimately an invitation to violate the central bank's mandate. After all, according to European treaties, price stability is the ECB's only primary mandate.

There are also other central banks, such as the American central bank, which aim to pursue full employment in addition to price stability. The revision of its strategy, scheduled for this year, will certainly offer the ECB the opportunity to address some of the criticisms made by Karlsruhe. But a fundamental change in his mandate would require an adaptation of the European treaties.

The third weak point is the demand that the ECB judge the redistributive effects of its monetary policy, not only within individual countries, but also among the eurozone countries. This ruling is not the first ruling by which the Federal Constitutional Court complains that the ECB is taking on quasi-fiscal risks and that it is implicitly bearing Germany's risks related to other countries. Such risk sharing is a necessary element in any economic and monetary union, from which all participants benefit in the end, as this reduces the risks for all members.

The Federal Constitutional Court is right when it says that through its monetary policy, the ECB is taking on many of these risks, buying government bonds and offering a lot of liquidity to banks, especially from weaker countries. Indeed, if the euro area had an adequate fiscal union and a single capital market, the ECB would have to take less risks.

The biggest contradiction of the many German ECB critics is that they would like to reduce the ECB's ability to act, but at the same time they reject the necessary measures to create a fiscal union and a capital market. Many of the ECB's critics are also among those who are now attacking the European reconstruction program proposed by Chancellor Merkel and French President Macron to ease the burden on the ECB.

The EU and the federal government must urgently address this conflict with the Federal Constitutional Court. This creeping conflict has caused enormous damage to the ECB. Because in Germany the criticism of the Constitutional Court is shared by a large part of public opinion, the media and also by some economists.

The result is that in Germany it is the confidence of the ECB that suffers greatly, and ultimately also its ability to successfully pursue a long-term monetary policy suffers. Much of the criticism of the ECB can be considered fundamentally wrong - and I think so too - but the conflict will eventually have to be clarified in order not to cause further damage to the ECB and the euro.

The right conclusion after the Karlsruhe ruling should not be the abandonment by the ECB of its monetary policy stance. Instead, it will be necessary to modify the European treaties which explicitly define the mandate, the permitted political instruments and the framework for the actions of the ECB.

Equally important is a reform of the economic and monetary union, through common tax instruments at European level and the completion of the internal market. Both steps are extremely difficult to implement. Failure would be catastrophic and could endanger the euro itself.

"Exploitation in German slaughterhouses is systematic and tolerated"

"On the one hand there are the powerful associations of the pork industrialists with excellent contacts in regional and federal politics. On the other hand there are the Romanians and Bulgarians, who here in Germany have a decidedly less influential lobby than that of the pigs that slaughter "writes Manfred Götzke on DLF commenting on the wave of infections from Covid-19 which in the German slaughterhouses has affected thousands of migrant workers from Eastern Europe. From Deutschlandfkunk.de

What has been going on in German slaughterhouses has never really been a secret: and the real scandal in the meat scandal is that for years almost nobody has ever cared about it.

I repeat it again with the utmost clarity: for years, tens of thousands of Eastern Europeans have been exploited in ways that resemble a form of modern slavery. They go into debt to come to Germany, they pay brokerage costs to some rather dubious German companies and then work to exhaustion in the German slaughterhouses.

Ten or twelve hours a day, six days a week, and then having to sleep in moldy hovels, for which they must also deduct several hundred euros of "rent" from the salary to be paid to the subcontractor.

Exploitation is systematic and tolerated

Workers often get the statutory minimum wage only on paper, overtime is not paid, there are deductions for work clothes and shoes and other things that are actually not even provided. The minimum wage set by law of 9.35 euros per hour for very hard physical work? A little too much. In the end they are only Romanians, at home they would take even less.

Here we are not talking about a couple of black sheep in the sector: because this exploitation is systematic and is tolerated by politics - if not actually wanted. Because it is extremely easy for the meat industry to outsource the exploitation to a group of somewhat dubious subcontractors.

Romanians and Bulgarians don't have a lobby

Organized and politically tolerated exploitation has a precise name: work contracts. Instead of directly employing workers, paying them adequately and employing them according to German labor law, almost all large slaughterhouses assign work contracts to subcontractors who cheat on wages, and when they can cheat their employees.

All this could be easily prevented by law simply by prohibiting the application of work contracts for the company's core activities. Why has it never happened up to now? Lobbying.

On the one hand there are the associations of the meat industry which are very powerful and with excellent contacts in regional and federal politics. On the other hand, there are Romanians and Bulgarians, who here in Germany have a decidedly less powerful lobby than that of pigs who slaughter.

Once again nothing will change

The fact that indignation is so great now has little to do with any form of empathy for workers. Due to Coronavirus infections registered in workers' barracks, some districts will simply have to wait a little longer before witnessing the long-awaited reopenings. It's mostly about personal interest.

Although NRW Laumann (CDU) labor minister once again claims to have lost patience with the meat industry. Although the Bundestag has once again discussed the serious social problem. I fear that in the end nothing will change: the Germans simply don't give a damn about Romanians