Seite - 157 - in Austrian Law Journal, Band 2/2018

ALJ 2018 European Monetary Fund 157 […] (4) Where the Council acts in accordance with paragraphs 1 or 2, [...] the votes of members of the Council representing Member States whose currency is not the euro shall be suspended. A qualified majority shall be defined in accordance with Article 238(3) TFEU.98 Under these provisions even big states such as Germany or France would lose their veto, as the Council decides on the basis of the qualified majority rules of Article 238(3) TFEU (55%/65%)99 and not the voting rules laid down in Article 4(4) of the draft Regulation (85%).100 This loss of veto power will raise complex constitutional issues in a number of Member States, such as Germany, where the Constitutional Court had recently decided that the loss of a veto right would not be compatible with the budgetary sovereignty of the German Parliament.101 The principle of democracy - as enshrined in Article 20 of the German Basic law - requires that the German Parliament remains the place in which autonomous decisions on revenue and expenditure are made, including those with regard to international liabilities.102 However, this will no longer be the case once the veto right is lost. This would interrupt the democratic legitimation nexus between the budgetary overall responsibility of the national parliament and the ESM/EMF. It would shift the democratic decision making process to the supranational level, where the European Parliament still plays a marginal role only (see above).103 In sum, under the old system unanimity used to be the rule, whereas the 85% threshold was the exception (‘emergency procedure’). In contrast, under the new system the 85% threshold becomes the rule and the new exception lowers requirements even further (55%/65%). While that may accelerate the procedure and thereby enhance efficiency, it raises other serious problems: Most importantly, the new decision making procedure will lead to the loss of a veto right. This, in turn, has serious democratic implications and hence raises complex constitutional issues in states such as Germany. In light of these implications, it is highly questionable whether individual Member States and in particularly Germany will - and indeed can - support the proposal. 3. More Democratic? Withdrawal from an International Treaty v. Repealing an EU Regulation The integration of the ESM into the EU legal framework will bring about another important legal change. As the ESMT constitutes an international treaty, a Member State can unilaterally withdraw from it according to Article 56 et seq. VCLT. Such unilateral withdrawal is no longer possible, once 98 Article 3(2) and 3(4) COM (2017) 827 final, supra note 6, at 27. 99 Note that the votes of the members of the council representing Member States whose currency is not the euro shall be suspended, see Article 3(4) COM (2017) 827 final, supra note 6, at 5. 100 See Article 3(4) COM (2017) 827 final, supra note 6, at 27. 101 See 2 BvR 1390/12, Leitsatz: No. 4: ‘Die haushaltspolitische Gesamtverantwortung des Deutschen Bundestages setzt voraus, dass der Legitimationszusammenhang zwischen dem Europäischen Stabilitätsmechanismus und dem Parlament unter keinen Umständen unterbrochen wird. [...] sicherzustellen, dass die gegenwärtig gegebene und verfassungsrechtlich geforderte Vetoposition der Bundesrepublik Deutschland auch unter veränderten Umständen erhalten bleibt‘ [‘In accordance with the general competence of the Parliament of German Federal Parliament to determine budgetary policy, the democratic legitimation of the European Stability Mechanism through the Parliament may not be impeded […] in order to guarantee that the currently existing and constitutionally required veto right of the Federal Republic of Germany remains intact also under changed circumstances.’]. 102 See 2 BvR 1390/12. 103 The role of national parliaments in the EMF is marginal, too, see Article 6 of the Draft COM (2017) 827 final.