¹ Thiele, A., Finanzaufsicht (Mohr Siebeck 2014) p. 302-307Google Scholar; Heun, W., ‘Steuerung der Staatsverschuldung durch Verfassungsrecht im Widerstreit’, Zeitschrift für Staats- und Europawissenschaften (2009) p. 552Google Scholar at p. 553.

² Adolph Wagner called this the ‘Law of growing state-tasks’, see Wagner, A., ‘Grundlegung der politischen Ökonomie’, in A. Wagner (ed.), Lehr- und Handbuch der politischen Ökonomie (C. F. Winter’sche Verlagshandlung 1893) p. 893Google Scholar.

³ See Lewinski, K. v., ‘Nationale und internationale Staatsverschuldung’, in J. Isensee and P. Kirchhof (eds.), Handbuch des Staatsrechts Band X (C. F. Müller 2012) p. 461Google Scholar at p. 463.

⁴ See especially Keynes, J. M., The General Theory of Employment, Interest and Money (Palgrave Macmillan 1936)Google Scholar. For ‘Keynesians before Keynes’, see Höfling, W., Staatsschuldenrecht (C. F. Müller 1993) p. 125-127Google Scholar.

⁵ Höfling, , supra n. 4, p. 128Google Scholar.

⁶ Three periods in German history are characterised by an extremely high new public debt. First, the years between 1970 and 1980 in which – partly due to the oil-crisis – public debt almost quadrupled; secondly, the doubling of public debt due to the unification of West- and East-Germany between 1990 and 2000; and, thirdly, the rise of public debt due to the financial crisis in 2010/2011 – money that was spent for bailing out systemic relevant financial institutions and for economic investment programmes.

⁷ However, the (mid-term and long-term) effects of public borrowing are less clear than one might expect. See, for a detailed discussion, Heun, W., ‘Staatsverschuldung und Grundgesetz’, 18 Die Verwaltung (1985) p. 1Google Scholar.

⁸ Notably the Frankfurter Allgemeine Zeitung (FAZ).

⁹ See BVerfGE 119, 96 (141-143). For an analysis of this decision, see Neidhardt, H., Staatsverschuldung und Verfassung (Mohr Siebeck 2010) p. 174-203Google Scholar.

¹⁰ See Heun, , supra n. 1, p. 555Google Scholar: ‘noch nicht allzu besorgniserregend’. This was true also for Spain, where the financial problems of the State were a result of the halting of the construction business, see Almendral, V. Ruiz, ‘The Spanish Legal Framework for Curbing the Public Debt and the Deficit’, 9 EuConst (2013) p. 189Google Scholar at p. 191.

¹¹ See Lewinski, v., supra n. 3, p. 466Google Scholar.

¹² This German fear of inflation in some ways can also be seen as an explanation of the OMT-Programme of the ECB’s being viewed so critically in Germany and even leading to the first referral of the Constitutional Court to the ECJ; see BVerfG 14 January 2014, 2 BvR 2728/13. For a critical discussion of this decision, see Thiele, A., ‘Friendly or Unfriendly Act? The “Historic” Referral of the Constitutional Court to the ECJ Regarding the ECB’s OMT-Program’, 15 German Law Journal (2014) p. 241-264Google Scholar and Heun, W., ‘Eine verfassungswidrige Verfassungsgerichtsentscheidung – der Vorlagebeschluss des BVerfG vom 14.1.2014’, 69 Juristenzeitung (2014) p. 331CrossRefGoogle Scholar.

¹³ On the reasons for the crisis of the Euro, see Thiele, A., Das Mandat der EZB und die Krise des Euro (Mohr Siebeck 2013) p. 1-11Google Scholar.

¹⁴ See especially Blyth, M., Austerity (Oxford University Press 2013)Google Scholar. For an analysis of the conditions under which conditions austerity can work see N. Batini et al., ‘Successful Austerity in the United States, Europe and Japan’, IMF Working Paper 12/190 (July 2012). On the effects of austerity for ‘soft’ public investment, see W. Streeck and D. Mertens, ‘Fiscal Austerity and Public Investment: Is the Possible the Enemy of the Necessary?’, MPlfG Discussion Paper 11/12 (July 2011).

¹⁵ See the speech by Volker Kauder at a party meeting in November 2011: ‘Jetzt auf einmal wird in Europa Deutsch gesprochen, nicht in der Sprache, aber in der Akzeptanz der Instrumente […] Ausgangspunkt der Krise sind nicht die Spekulanten, sondern dass wir uns nicht an Haushaltsdisziplin gehalten haben in Europa.’ video on <https://youtu.be/eUeuCIe9vkQ> at 4:52 to 6:10 minutes, visited 26 March 2015. See also Reestman, J.-H., ‘The Fiscal Compact: Europe’s Not Able to Speak German – On the Dutch Implementing Act and the Hazardous Interpretation of the Implementation Duty in Article 3(2) Fiscal Compact’, 9 EuConst (2013) p. 480Google Scholar at p. 480.

¹⁶ Apart from the massive political implications this policy can have – for example, at the end of August 2014, lack of support for the austerity-based reform programme of the French President by the French Minister for the Economy led to a complete restructuring of the French Government.

¹⁷ For an overview see Heun, , supra n. 1, p. 563-566Google Scholar.

¹⁸ See Härtel, I., ‘Die Schuldenbremse im föderalen Deutschland – das neue Rechtsregime und seine Umsetzung in Bund und Ländern’ in Europäisches Zentrum für Föderalismus-Forschung (ed.), Jahrbuch Föderalismus 2013 (Nomos 2013) p. 228Google Scholar at p. 230; Bofinger, P., Ist der Markt noch zu retten? (Econ 2009) p. 196Google Scholar; Tappe, H., ‘Die neue “Schuldenbremse” im Grundgesetz’, 62 Die Öffentliche Verwaltung (2009) p. 881Google Scholar at p. 882; Kloepfer, M., Finanzverfassungsrecht (C. H. Beck 2014) p. 272Google Scholar. For the economic rationale behind the ‘golden rule’ see Heun, , supra n. 1, p. 563-564Google Scholar. See, for details of the genesis of this norm, Höfling, , supra n. 4, p. 140-142Google Scholar.

¹⁹ These are the Government (Bundesregierung) and the Parliament (Bundestag). See, for details of the budgetary cycle in Germany, Heun, W., Staatshaushalt und Staatsleitung (Nomos 1989) p. 291-583Google Scholar.

²⁰ Calliess, C., ‘Finanzkrisen als Herausforderung der internationalen, europäischen und nationalen Rechtsetzung’, 71 Veröffentlichungen der Vereinigung der Deutschen Staatsrechtslehrer (2012) p. 113Google Scholar at p. 166; Härtel, , supra n. 18, p. 230Google Scholar. See also Beck, H. and Prinz, A., Staatsverschuldung (C.H. Beck 2011) p. 94Google Scholar. The Constitutional Court tried to make this restriction more effective by inventing special duties of reasoning for the political authorities (see especially BVerfGE 79, 311 [343]), but was also unable to reverse the trend towards a constantly rising public deficit. For further problems of the former Art. 115 GG, see Tappe, , supra n. 18, p. 882-885Google Scholar.

²¹ BVerfGE 119, 96 (141-143).

²² See for an overview of the results of this reform, Koemm, M., Eine Bremse für die Staatsverschuldung (Mohr Siebeck 2011) p. 32-36Google Scholar.

²³ Calliess, , supra n. 20, p. 167Google Scholar. See Heun, , supra n. 1, p. 567-568Google Scholar for an overview of the Swiss rules. On the effectiveness of these Swiss rules, see Feld, L. P. and Kirchgässner, G., ‘On the effectiveness of Debt brakes: The Swiss Experience’, in R. Neck and J.-E. Sturm (eds.), Sustainability of Public Debt (MIT Press 2008) p. 223CrossRefGoogle Scholar at p. 227-246.

²⁴ Heun, W., ‘Art. 115’, in H. Dreier (ed.), Grundgesetz Supplementum Band III (Mohr Siebeck 2010) p. 209Google Scholar at p. 221.

²⁵ Germany is a federal state. Therefore public borrowing can appear on the federal as well as the state level. Whereas the former debt-provisions in the Basic Law applied only to the federal level, the new debt brake also restricts public borrowing for the German Länder. Such a restriction does not violate the federal state principle laid down in Art. 20(1) GG: see Thiele, A., ‘Das Ende der Länder?’, 17 Niedersächsische Verwaltungsblätter (2010) p. 89Google Scholar at p. 89-94 and Härtel, , supra n. 18, p. 232-234Google Scholar. A similar discussion came up with the new Spanish debt rules, which also restricted the financial autonomy of the autonomous communities. However, the Spanish Constitutional Court upheld the constitutionality of the laws: see Almendral, , supra n. 10, p. 193Google Scholar.

²⁶ According to Art. 143d (1) GG, this will be in 2016 for the Federation and in 2020 for the Länder. The Federal Government, however, will probably succeed in having a balanced budget by 2015 – the first balanced budget for 46 years.

²⁷ See, for instance, Hagen, J. v., ‘A Note on the Empirical Effectiveness of Formal Fiscal Restraints’, 44 Journal of Public Economics (1991) p. 199-210CrossRefGoogle Scholar; Poterba, J., ‘State Responses to Fiscal Crises, The Effects of Budgetary Institutions and Politics’, 102 Journal of Political Economy (1994) p. 799-821CrossRefGoogle Scholar.

²⁸ See Heun, W., The Constitution of Germany (Hart Publishing 2011) p. 7Google Scholar.

²⁹ Heun, , supra n. 28, p. 7Google Scholar.

³⁰ This has also led to a dominant position for the Bundesverfassungsgericht within German legal scholarship. This effect has rightly been criticised by some scholars: see, for instance, Schlink, B., ‘Die Entthronung der Staatsrechtswissenschaft durch die Verfassungsgerichtsbarkeit’, 28 Der Staat (1989) p. 161Google Scholar at p. 163. See also Heun, W., Die Verfassungsordnung der Bundesrepublik Deutschland (Mohr Siebeck 2014) p. 8Google Scholar.

³¹ Sceptical with respect to the area of public finances, however, is Wieland, J., ‘Neuordnung der Finanzverfassung nach Auslaufen des Solidarpakt II und Wirksamwerden der Schuldenbremse’, 211 Speyerer Arbeitsheft (2013) p. 12-13Google Scholar.

³² See Heun, , supra n. 28, p. 7Google Scholar: ‘Political disputes are therefore quite often discussed in constitutional terms.’

³³ For an overview, see also Kloepfer, , supra n. 18, p. 269-304Google Scholar. The rule is (unnecessarily) repeated for the Federation in Art. 115(2) GG.

³⁴ See Neidhardt, , supra n. 9, p. 270Google Scholar.

³⁵ The debt brake is therefore stricter for the Länder than for the Federation. Against Kloepfer, , supra n. 18, p. 283-285Google Scholar, this is constitutional and does not violate the federal principle laid down in Art. 20(1) GG: see Siekmann, H., ‘Art. 109’, in M. Sachs (ed.), Grundgesetz (6th edn., C. H. Beck 2011) p. 2276Google Scholar at p. 2300.

³⁶ As the provision states that, even with a certain amount of credit, the budget is supposed to be balanced, it is not an exception to the balanced budget rule in a strict sense. Factually, however, this has the same effect as if it were an exception. See Korioth, S., ‘Das neue Staatsschuldenrecht – zur zweiten Stufe der Föderalismusreform’, 64 Juristenzeitung (2009) p. 729CrossRefGoogle Scholar at p. 731.

³⁷ § 4 Gesetz zur Ausführung von Art. 115 GG (Law for the execution of Article 115 GG), BGBl. I, p. 2702.

³⁸ Heintzen, M., ‘Art. 109’, in I. v. Münch and P. Kunig (eds.), Grundgesetz Band 2 (C. H. Beck 2012) p. 1181Google Scholar at p. 1196; Kloepfer, , supra n. 18, p. 280Google Scholar; Christ, J., ‘Neue Schuldenregel für den Gesamtstaat: Instrument zur mittelfristigen Konsolidierung der Staatsfinanzen’, 28 Neue Zeitschrift für Verwaltungsrecht (2009) p. 1333Google Scholar at p. 1333; Heun, , supra n. 24, p. 231Google Scholar; Korioth, , supra n. 36, p. 731Google Scholar. Koemm, , supra n. 22, p. 206-209Google Scholar, sees the 0.35 per cent clause as a real exception and therefore argues that, in this case also, the political authorities have to give reasons if they want to revert to public borrowing . In this sense, see also Kirchhof, G., Die Allgemeinheit des Gesetzes (Mohr Siebeck 2009) p. 599Google Scholar.

³⁹ In this sense, also Koemm, , supra n. 22, p. 209-211Google Scholar.

⁴⁰ Kirchhof, , supra n. 38, p. 592Google Scholar. Similarly Härtel, supra n. 18, p. 23: ‘atmender Haushalt’ (breathing budget).

⁴¹ The norm obviously assumes that booms and busts appear ‘symmetrical’ (see Siekmann, supra, n. 29, p. 2378). That, however, is not the case and will cause difficulties when applying the norm. See also Heun, , supra n. 24, p. 233Google Scholar: ‘rather escapist view’.

⁴² See Tappe, , supra n. 18, p. 888Google Scholar.

⁴³ Wendt, R., ‘Art. 115’, in H. v. Mangoldt et al. (eds.), Grundgesetz Band 3 (6th edn., Franz Vahlen 2010) p. 1647Google Scholar at p. 1669-1670.

⁴⁴ Henneke, H.-G., Der europäische Fiskalpakt und seine Umsetzung in Deutschland (Kommunal- und Schul-Verlag 2013) p. 79Google Scholar.

⁴⁵ See supra n. 37.

⁴⁶ Heun, , supra n. 24, p. 234-235Google Scholar.

⁴⁷ However, it seems more or less certain that at least the Constitutional Court will stick with such a restrictive interpretation, as it was the Court that demanded a reform that effectively reduces public debt.

⁴⁸ For a definition, see Thiele, A., ‘Katastrophenschutzrecht im deutschen Bundesstaat’, in I. Härtel (ed.), Handbuch Föderalismus Band III (Springer 2012) p. 69Google Scholar at p. 72-74.

⁴⁹ Heun, , supra n. 24, p. 237-238Google Scholar. For a detailed analysis see Koemm, , supra n. 22, p. 236-242Google Scholar.

⁵⁰ See Heintzen, , supra n. 38, p. 1198Google Scholar.

⁵¹ See Koemm, , supra n. 22, p. 236Google Scholar; Thiele, , supra n. 25, p. 90Google Scholar; Heintzen, , supra n. 38, p. 1199Google Scholar. Not every economic down-swing, however, can be interpreted as such an ‘unusual event’, as these are already covered by the ‘economic exception’ (see supra).

⁵² See Thiele, A., supra n. 1, p. 1-7Google Scholar.

⁵³ See, for example, Seiler, C., ‘Konsolidierung der Staatsfinanzen mithilfe der neuen Schuldenregel’, 64 Juristenzeitung (2009) p. 721CrossRefGoogle Scholar at p. 721-728; Pünder, H., ‘Gerechte Lastenverteilung zwischen den Generationen’, 123 Deutsches Verwaltungsblatt (2008) p. 946Google Scholar; Feld, L. P., ‘Sinnhaftigkeit und Effektivität der deutschen Schuldenbremse’, 11 Perspektiven der Wirtschaftspolitik (2010) p. 226 at p. 241CrossRefGoogle Scholar: debt brake ‘balanced and effective’.

⁵⁴ Not all sorts of public debt are problematic in this sense, and some sorts are more problematic than others. The public debate does not usually differentiate sufficiently between these different forms – a constitutional debt brake, however, obviously should.

⁵⁵ In contrast, the Spanish rules avoid such ‘gimmicky fiscal practices’, see Almendral, , supra n. 10, p. 196Google Scholar.

⁵⁶ See § 3 Gesetz zur Ausführung von Art. 115 GG, supra n. 31.

⁵⁷ See Siekmann, supra n. 35, p. 2296; Kloepfer, , supra n. 18, p. 277Google Scholar. Similarly G. Kirchhof, ‘Art. 109’, in Mangoldt, H. v. et al. (eds.), Grundgesetz Band 3 (6th edn., Franz Vahlen 2010) p. 1433Google Scholar at p. 1468.

⁵⁸ The state taking up credit from the private markets causes interest rates to rise and thus hinders at least some private investors in taking up credit for private investments. This (theoretical) effect of public debt is called ‘crowding-out’.

⁵⁹ Kloepfer, , supra n. 18, p. 277Google Scholar; Siekmann, supra n. 35, p. 2295.

⁶⁰ Siekmann, H., ‘Art. 115’, in M. Sachs (ed.), Grundgesetz (6th edn., C. H. Beck 2011) p. 2366Google Scholar at p. 2369. This is a major difference from European debt-rules and especially the Fiscal Compact. This discrepancy, however, was no mistake: it was seen and accepted when the debt-brake was introduced, see Heun, , supra n. 24, p. 180Google Scholar – 181.

⁶¹ See Kirchhof, , supra n. 57, p. 1467Google Scholar.

⁶² See also Heun, , supra n. 28, p. 116Google Scholar: ‘The efficiency of these provisions seems extremely doubtful.’

⁶³ See Heun, , supra n. 1, p. 571Google Scholar.

⁶⁴ Heintzen, , supra n. 38, p. 1193Google Scholar; Heun, , supra n. 24, p. 180Google Scholar – 181. Kirchhof, , supra n. 57, p. 1468Google Scholar, however, wants to include municipalities in the debt brake. Yet it seems very doubtful that the Constitutional Court would change its former adjudication in this respect.

⁶⁵ This, however, is significantly less than in Spain, where the municipalities manage 13.6 per cent of public spending: see Almendral, , supra n. 10, p. 198Google Scholar.

⁶⁶ Rightly critical, therefore, Heun, , supra n. 24, p. 180-181Google Scholar and Henneke, H.-G., ‘Art. 109’, in B. Schmidt-Bleibtreu et al. (eds.), Grundgesetz (13th edn., Carl Heymanns 2014) p. 2727Google Scholar at p. 2748. The fact that the indebtedness of local government can become a major problem is visible in the United States.

⁶⁷ See especially Scherf, W., Öffentliche Finanzen (UTB 2009) p. 432-437Google Scholar; Heun, W., ‘Balanced Budget Requirements and Debt brakes Feasibility and Enforcement’, 15 German Economic Review (2013) p. 100CrossRefGoogle Scholar at p. 100-101. See also Feld, Lars P. and Kirchgässner, G., supra n. 23, p. 223 and C. B. Blankart, Öffentliche Finanzen in der Demokratie (6th edn., Vahlen 2006) p. 387Google Scholar.

⁶⁸ This again is recognised by the Spanish debt rules, see Almendral, , supra n. 10, p. 193-194Google Scholar and p. 197.

⁶⁹ For the ‘crowding-out’ effect, see Scherf, , supra n. 67, p. 410-411Google Scholar; Heun, , supra n. 8, p. 10-13Google Scholar. Crowding-out, however, can occur only where the amount of credit is limited, as, otherwise, the interest rate will remain uninfluenced through public borrowing. The problems in Europe at the moment are quite different. Private investors are simply not investing, even though the interest rate is extremely low. Without public investments there would thus be more or less no investment at all. Under such conditions public borrowing can obviously not crowd-out any private investments (as these do not occur even without public borrowing).

⁷⁰ What level is sustainable (60, 70 or 80 per cent of GDP?) in the long run is, however, highly disputed. The 90 per cent rule established by Carmen Reinhart and Kenneth Rogoff, which played an important role on the political level (see Reinhart, C. and Rogoff, K., ‘Growth in a time of debt’, 100 American Economic Review (2010) p. 573-578CrossRefGoogle Scholar) has been put into question; see especially T. Herndon et al., ‘Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff’, PERI Working Paper 322 (April 2013).

⁷¹ Again this is a significant difference from the European rules.

⁷² See again Scherf, , supra n. 67, p. 449Google Scholar.

⁷³ See especially J. M. Keynes, supra n. 4. See also Scherf, , supra n. 67, p. 406Google Scholar. See also Heun, , supra n. 67, p. 102Google Scholar and Beck, and Prinz, , supra n. 20, p. 32-38Google Scholar.

⁷⁴ In order to activate the automatic stabilisers.

⁷⁵ See especially Koemm, , supra n. 22, p. 221Google Scholar with further references. For a different opinion, see Heintzen, , supra n. 32, p. 1197Google Scholar.

⁷⁶ Keynes recommended active deficit spending in times of economic downturns.

⁷⁷ Judging from its former decisions, it seems more or less clear that the Constitutional Court will take the view of the debt-restrictors. The question, therefore, is not whether the Court will interpret the exceptions of the debt brake restrictively, but how restrictive this interpretation will be.

⁷⁸ Because good times mean a higher national gross domestic product, see Tappe, , supra n. 18, p. 890Google Scholar.

⁷⁹ See also Beck, and Prinz, , supra n. 20, p. 32-38Google Scholar.

⁸⁰ See Musgrave, R. A., Finanztheorie (2nd edn., Mohr Siebeck 1969) p. 523Google Scholar; Beck, and Prinz, , supra n. 20, p. 28Google Scholar.

⁸¹ As there are hardly any such private investments in Germany or in the European Union at the moment, public borrowing would not result in such a crowding-out under the current economic conditions.

⁸² This obviously depends on whether public and private investments are equally effective, which is highly disputed between economic scholars. However, it seems safe to say, that public investments are not completely ineffective and therefore can at least partly compensate for private investments . See Ford, R. and Poret, P., ‘Infrastructure and Private Sector Productivity’, 17 OECD Economic Studies (1991) p. 63-89Google Scholar; Kitterer, W. and Schlag, C.-H., ‘Sind öffentliche Investitionen produktiv?’, 52 Finanzarchiv (1995) p. 460-477Google Scholar.

⁸³ 0.35 per cent of GDP, see supra.

⁸⁴ See Siekmann, , supra n. 35, p. 2297Google Scholar.

⁸⁵ See also Heun, , supra n. 1, p. 569-570Google Scholar.

⁸⁶ Especially the road system is in desperate need of public investments. The same is true for a lot of public buildings, such as schools and universities.

⁸⁷ See Bofinger, , supra n. 18, p. 195Google Scholar.

⁸⁸ For an overview of the relevant financial institutions, see Thiele, , supra n. 1, p. 125-164Google Scholar.

⁸⁹ The ECB was strongly criticised when it reduced its safety requirements during the Eurocrisis in order to be able to continue to accept Greek government bonds as collateral despite its financing problems. See Thiele, , supra n. 13, p. 80-84Google Scholar. But what should the ECB do, if safe German bonds are simply not available anymore? It obviously could not simply stop supplying commercial banks with central bank money they need.

⁹⁰ Portugal, Italy, Ireland, Greece and Spain.

⁹¹ See also Heun, , supra n. 1, p. 571Google Scholar: ‘Die jüngste, auch aus Populismus geborene deutsche Verfassungsreform ist deshalb in seltenem Maß formal und inhaltlich mißglückt und fehlgeleitet.’

⁹² See Schorkopf, F., ‘Europas politische Verfasstheit im Lichte des Fiskalvertrages’, 10 Zeitschrift für Staats- und Europawissenschaften (2012) p. 1CrossRefGoogle Scholar at p. 2. Yet the rules themselves, especially the balanced budget rule, did ‘not come out of the blue’, see Reestman, , supra n. 15, p. 481Google Scholar.

⁹³ See, for a detailed critique of this idea, Blyth, supra n. 14.

⁹⁴ According to the 25th recital to the Fiscal Compact, financial aids through the European Stability Mechanism (ESM) require that the applying member state has correctly incorporated a balanced budget rule and the correction mechanism (in the sense of the Fiscal Compact) into its binding legislation: see Reestman, , supra n. 15, p. 490Google Scholar; Calliess, C. and Schoenfleisch, C., ‘Auf dem Weg in die europäische “Fiskalunion”?’, 67 Juristenzeitung (2012) p. 477CrossRefGoogle Scholar at p. 485.

⁹⁵ Lewinski, v., supra n. 3, p. 474Google Scholar; Schorkopf, , supra n. 92, p. 17Google Scholar; Henneke, , supra n. 44, p. 7Google Scholar. As Croatia joined the EU after the Fiscal Compact was signed, it is also not a contracting-partner.

⁹⁶ According to Art. 16 of the Fiscal Compact, the necessary steps shall be taken with the aim of incorporation of the substance of the Fiscal Compact into the legal framework of the European Union. See also Gordon, M., ‘The United Kingdom and the Fiscal Compact: Past and Future’, 10 EuConst (2014) p. 28Google Scholar at p. 34.

⁹⁷ The Fiscal Compact, therefore, is a ‘normal’ international treaty between 25 contracting-parties: see Calliess, and Schoenfleisch, , supra n. 94, p. 481Google Scholar; Hofmann, H. and Konow, C., ‘Die neue Stabilitätsarchitektur der Europäischen Union’, Zeitschrift für Gesetzgebung (2012) p. 138Google Scholar at p. 150. For a detailed analysis of the consequences for the German ratification process, see Lorz, R. A. and Sauer, H., ‘Ersatzunionsrecht und Grundgesetz’, Die Öffentliche Verwaltung (2012) p. 573Google Scholar – 582.

⁹⁸ For a different opinion, see Schorkopf, , supra n. 92, p. 3Google Scholar.

⁹⁹ As the relevant EU legislation required a member state to set its medium-term objective for its annual budget deficit to be between 0 and 1 per cent, the balanced budget rule of the Fiscal Compact is more demanding. See Gordon, , supra n. 96, p. 31Google Scholar; Reestman, , supra n. 15, p. 482Google Scholar and Peers, S., ‘The Stability Treaty: Permanent Austerity or Gesture Politics?’ 8 EuConst (2012), p. 404Google Scholar at p. 412. Reestman, , supra n. 15, p. 483Google Scholar, believes that the 0.5 per cent of GDP rule will not again be tightened up in the future.

¹⁰⁰ According to Art. 3(3) of the Fiscal Compact, ‘exceptional circumstances’ are either unusual events outside the control of the contracting party concerned which have a major impact on the financial position of the general government or periods of severe economic downturn as set out in the revised Stability and Growth Pact, provided that the temporary deviation of the contracting party concerned does not endanger fiscal sustainability in the medium-term. This more or less corresponds to the abovementioned exception provided for in the German debt brake.

¹⁰¹ The Fiscal Compact includes no ‘economic exception’ in the sense of the German debt brake. However, as the Fiscal Compact refers only to the structural deficit, deficits for economic reasons do not fall under the 0.5 per cent margin. An ‘economic exception’ would therefore have made no sense within the Fiscal Compact. See also Reestman, , supra n. 15, p. 482Google Scholar.

¹⁰² In 2013, the structural deficit of the Federation alone was 0.34 per cent of GDP.

¹⁰³ See also Hofmann, and Konow, , supra n. 97, p. 149Google Scholar, who remark that, at least from a legal perspective, compliance with the Fiscal Compact until then is not legally guaranteed.

¹⁰⁴ German politicians, especially the representatives of the Länder, seem to have been surprised by the fact that Germany might be among the countries that have difficulties in fulfilling their duties under the Fiscal Compact. Germany’s not being able to stick to the new debt rules would obviously be a fatal political signal.

¹⁰⁵ See also Heun, , supra n. 24, p. 222Google Scholar: necessity of a legal authorisation for any form of credit being the ‘core right of the Parliament’ within the budgetary process.

¹⁰⁶ See Reestman, , supra n. 15, p. 489Google Scholar; Peers, , supra n. 99, p. 419Google Scholar; Calliess, and Schoenfleisch, , supra n. 94, p. 484Google Scholar.

¹⁰⁷ Calliess, and Schoenfleisch, , supra n. 94, p. 484Google Scholar; Hofmann, and Konow, , supra n. 97, p. 147Google Scholar. For an overview of the ‘normal’ infringement procedure according to Article 258 TFEU, see Thiele, A., Europäisches Prozessrecht (2nd edn., C. H. Beck 2014), p. 68-96Google Scholar.

¹⁰⁸ See Schorkopf, , supra n. 92, p. 12-13Google Scholar; Hofmann, and Konow, , supra n. 97, p. 147Google Scholar.

¹⁰⁹ See also Lewinski, v., supra n. 3, p. 477Google Scholar.

¹¹⁰ See Henneke, , supra n. 66, p. 2743Google Scholar; Henneke, , supra n. 44, p. 83Google Scholar; Hofmann, and Konow, , supra n. 97, p. 148Google Scholar. This, however, depends on how one interprets the implementation duty in Art. 3 (2) TSCG. I here follow the view of the European Commission. For a discussion of the different interpretations possible, see Reestman, , supra n. 15, p. 490-499Google Scholar.

¹¹¹ Haushaltsgrundsätzegesetz vom 19. August 1969, BGBl. I., p. 1273, zuletzt geändert durch Artikel 1des Gesetzes vom 15. Juli 2013, BGBl. I, p. 2398 – Act on budgetary principles for the federal government and federal states.

¹¹² According to Article 31 GG, state-law (including the budget-law) has to comply with any (constitutional) Federal law.

¹¹³ See, for the similar problem with respect to the binding force of the implementation of the Fiscal Compact in the Netherlands, Reestman, , supra n. 15, p. 484Google Scholar – 485.

¹¹⁴ See especially Heun, W., Staatshaushalt und Staatsleitung (Nomos 1989) p. 165-174Google Scholar; Heun, , supra n. 24, p. 189Google Scholar; Heintzen, supra n. 38, p. 1202; Gröpl, C., ‘Einleitung’, in C. Gröpl (ed.), BHO/LHO (C. H. Beck 2011) p. 1Google Scholar at p. 11. For a different opinion, see Siekmann, , supra n. 35, p. 2304Google Scholar; Kirchhof, , supra n. 57, p. 1482-1483Google Scholar.

¹¹⁵ Explicitly in this sense Heintzen, , supra n. 38, p. 1202Google Scholar.

¹¹⁶ See BVerfGE 101, 158 (214-238), where the Constitutional Court held that the so-called ‘Maßstäbegesetz’ (‘scale-statute’), in which the legislature is obliged to define principles for the assignment of the tax revenues to the Federation and the Länder, stands above ‘normal’ statutes. Within the legal literature, the Constitutional Court was mainly criticised for this surprising judgement, see Siekmann, H., ‘Vor Art. 104a’, in M. Sachs, Grundgesetz (6th edn., C. H. Beck 2011) p. 2099Google Scholar at p. 2118 with further references.

¹¹⁷ This again depends on how the ECJ would interpret the implementation duty, see Reestman, , supra n. 15, p. 498Google Scholar: ‘The interpretation of the implementation duty in Article 3(2), finally, is anybody’s guess.’.

¹¹⁸ See, for example, ECJ 20 March 1997, Case C-96/95, EC Commission v Germany. For further details, see Ruffert, M., ‘Art. 288 AEUV’, in C. Calliess and M. Ruffert (eds.), EUV/AEUV (4th edn., C. H. Beck 2011) p. 2441Google Scholar at p. 2452-2457.

¹¹⁹ Art. 8(1) TSCG ‘invites’ the European Commission to report whether contracting parties have complied with the implementation requirements of Art. 3(2). If this is not the case, ‘the matter will be brought to the Court of Justice by one of the Contracting States’; see also Reestman, , supra n. 15, p. 489; Peers, supra n. 99, p. 419Google Scholar.

¹²⁰ As the judgment of the ECJ is binding, Germany would have to amend its Constitution with respect to its budgetary rules. Whether the Constitutional Court would accept this seems doubtful. In this sense also Reestman, , supra n. 15, p. 498 and p. 500Google Scholar.

¹²¹ In order to obtain full compliance with the further requirements, § 51(2) HGrG then directly refers to Art. 3(2) TSCG as well as to the relevant legislation of the European Union.

¹²² This special form of coordination was laid down in an administrative agreement between the Federation and the Länder of 1968, before it was implemented into the HGrG in 2010: see Wernsmann, R., ‘§ 31 Anh.’, in C. Gröpl (ed.), BHO/LHO (C. H. Beck 2011) p. 308Google Scholar at p. 316.

¹²³ That is the Federation, the Länder, the municipalities and the social insurance carriers.

¹²⁴ Stabilitätsratsgesetz vom 10 August 2009, BGBl. I, p. 2702, zuletzt geändert durch Artikel 2 des Gesetzes vom 15. Juli 2013, BGBl. I, p. 2398 – ‘Statute on the Stability Council’.

¹²⁵ See also Lewinski, v., supra n. 3, p. 477Google Scholar.

¹²⁶ They are the Federal Finance Minister, the Federal Minister for the Economy and the Finance Minsters of the Länder.

¹²⁷ See, for an overview, Thiele, A., Europarecht (12th edn., Niederle Media 2015) p. 131-142Google Scholar.

¹²⁸ Therefore the European debt provisions within the treaties do not have to comply with the existing debt brake, but are constitutional as long as these provisions could (theoretically) have been introduced into the GG by the German legislator.

¹²⁹ BVerfGE 132, 195 (278-287).

¹³⁰ BVerfGE 132, 195 (278-284).

¹³¹ See also Lewinski, v., supra n. 3, p. 476-477Google Scholar.

¹³² BVerfGE 132, 195 (284-285).

¹³³ See Schorkopf, , supra n. 92, p. 24Google Scholar.

¹³⁴ BVerfGE 132, 195 (285-287).

¹³⁵ Blyth, , supra n. 14, p. 8Google Scholar.

¹³⁶ In fact, the solution would be to boost public spending, see especially P. Krugman, ‘How to end this depression’,<www.nybooks.com/articles/archives/2012/may/24/how-end-depression/?page=1>, visited 29 August 2014: ‘The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending.’

¹³⁷ See Bofinger, P., Zurück zur D-Mark? (Droemer 2012) p. 98-99Google Scholar and Blyth, , supra n. 14, p. 241Google Scholar:‘So we are talking taxes, which no one likes.’

¹³⁸ Greece again being the exception.

¹³⁹ Batini et al., supra n. 14, p. 32.