Would anchoring in the union law imply that the EU Commission takes the
decisions on granting loans to member states and secure conditionality? Or
would it rather mean that the director of the ESM/EMF will be accountable to the
EP – comparable to the arrangements for the ECB president – and the
Bundestag keeps its control rights? But a transfer into union law technically only
makes sense if the decision making procedures in the ESM/EMF will be
changed significantly. And how could this be in compliance with the ruling of the
German Constitutional Court?
After all, the highest German court ruled on the
ESM in 2014 that the Bundestag cannot approve a guarantee or transfer
automatism on which it has no control anymore. Merkel faced critical questions
by her party fellows in this regard and stated that a future EMF will not become
“an agency“ of the EU Commission and that control rights of the Bundestag “will
not be touched” (FAZ 02.02.2018).
This debate was not least triggered by Otmar
Issing, the former chief economist of the ECB, who published a very critical
assessment of the coalition’s plans on euro area reforms (FAZ 26 January
2018). The concerns did not go down unheard: In contrast to the sounding
paper, the coalition agreement clarifies that the rights of the parliament remain
unaffected by the envisaged transformation of the ESM.
In any case, while it might make economical sense to have a broader constructed EMF for the euro
area, its design remains crucial to avoid moral hazard and procrastination of