Debts would be shared. The strong would offer a helping hand to the weak. Money would be raised at incredibly cheap rates to help countries recover from the impact of Covid-19, while at the same time building back a greener, tech-based economy. Last summer, as the epidemic engulfed the continent, the European Union took a massive step forwards towards a fiscal union, launching the ‘Coronavirus Recovery and Resilience Facility’ with £600 billion of common debt. The more swivel-eyed europhiles hailed it as a ‘Hamilton Moment’, a reference to the first Treasury Secretary of the United States who bound that fledging union together through the bond market. It would be a tangible example of how ‘solidarity’ helped everyone. The trouble is, getting on for a year later, the much-hyped fund is turning out not to be as ‘Resilient’ as it was billed, and may not do much for the ‘Recovery’ either.
On Friday, the German Constitutional Court threw an almighty spanner in the works when it ruled that the country’s President couldn’t sign off on the ratification of the Fund until it had ruled on whether Germany’s contribution was legal or not. According to the complaint, it may violate the constitution if it limits the budgetary powers of the Bundestag. Whether that is ultimately upheld, of course, remains to be seen. Germany’s Constitutional Court has established a track record of delaying steps towards extending the powers of the EU, and occasionally limiting them, but not, in the end, blocking them. It usually allows it to go ahead, with some judicial grumbling.
Problem solved? Well, not exactly. In fact, the drama over the rescue fund is likely to replay the crisis over the vaccination programme.