Democratic controls

As Luxembourg's prime minister and the head of the eurogroup, Jean-Claude Juncker cannot avoid taking a position on the current state of the eurozone crisis.

At times his commentary has been diplomatic, at times he's philosophical and sometimes he's downright sharp. In the run-up to the marathon EU summit at the end of October, Juncker was critical, commenting that apparently only France and Germany seemed to matter when it came to the euro crisis.

He pointed out that the eurozone is much more than the Berlin-Paris axis. The currency union is a highly complex constellation of different national and supranational institutions.

"We are dealing with 17 governments, 17 states and 17 parliaments," said Juncker. "It's not just Germany that has a parliament. They also exist elsewhere."

Role of parliament

Juncker's comment was a clear jab at Germany, where the Constitutional Court is reviewing the appropriate role of the parliament in two different hearings this week. In the first proceeding, the court is weighing to what extent the parliament has to participate in questions regarding the temporary European bailout fund, the European Financial Stability Facility (EFSF).

The Constitutional Court will determine whether the entire parliament has to vote on the EFSF, or whether a committee of nine parliamentarians can speak for the entire legislature. The court issued a preliminary injunction in late October saying a select committee could not make any decisions until the judicial system had made its final ruling on the role of parliament in the matter.

In the second proceeding, the Green party has charged that the parliament has not been well enough informed about the plans for the permanent European Stability Mechanism (ESM), which will replace the EFSF in 2013.

At the beginning of September, Germany's highest court ruled that the European bailout fund was not unconstitutional. But at the same time, the judges demanded more parliamentary participation in future decisions. The federal government is fundamentally obligated to seek the approval of the budget committee before taking on guarantees, according to the chief judge of the Constitutional Court, Andreas Vosskuhle.

European Financial Stability Facility

In most of the 17 eurozone member states, the parliaments have voted on the rules and regulations related to the EFSF. That was the case in Finland, Malta, the Netherlands and Slovakia. In Bratislava, the vote failed in its first attempt and drove a wedge within Slovakia's governing coalition before a majority of representatives finally voted "yes" to the EFSF.

But national parliaments did not have the chance to vote in all the eurozone member states, according to the European Commission. The EFSF is a private entity and therefore parliamentary approval is not necessary, according to some experts.

The EFSF neither impacts the decision-making mechanisms of the EU nor does it transfer national competencies to Brussels. The bailout fund is essentially a joint-stock company that can draw credit in order to give money to indebted nations. The EFSF issues bonds and the eurozone states carry the liability.

European Stability Mechanism

But when it comes to the ESM, the eurozone states will not just be liable for credit; they will have to actually contribute their own capital to the fund. Since the ESM is meant to be a permanent institution, it needs a sound legal basis which requires a change in the EU's treaties. In this case, the approval of national parliaments is necessary.

There are no other suits against the European bailout fund outside of Germany, according to the office of EU Commission President Jose Manuel Barroso. That may have to do with the fact that Germany has to make the largest contribution to the fund.

Christian Calliess, an expert in European law, agrees that parliament's role needs to be strengthened. The Constitutional Court's ruling is important in light of the permanent ESM.

"With the permanent bailout fund, it is unforeseeable which states may receive aid money," Calliess told Deutsche Welle. "You cannot act completely independent of the national parliaments on this one."

Author: Daphne Grathwohl / slk
Editor: Martin Kuebler