Upcoming Votes Test European Debt Crisis Response

BY Michael D. Mosettig  September 11, 2012 at 12:08 PM EST


A worker in Utrecht, the Netherlands, hangs a poster of one of the parties taking part in Wednesday’s Dutch parliamentary elections. Photo by Jasper Juinen/Getty Images.

Updated on Sept. 12: Germany’s Federal Constitutional Court on Wednesday gave the green light to a bailout fund for countries that use the euro.

Original Story:

In the perils-of-Pauline drama of deadlines and dates that the European debt crisis has become over the last two-and-a-half years, another looms on Wednesday in two venues — a German constitutional court and in Dutch elections.

In a worst case scenario, a thumb’s down from the German judges or Dutch voters could create yet another set of obstacles to bringing the debt monster under control. A more likely outcome in both cases, say many analysts, are mixed decisions possibly producing more muddle. The best-case prediction is for outcomes that lead to stronger prospects for the 17-nation euro currency.

First, the Germans. In the southwestern city of Karlsruhe, a panel of five men and three women will rule on whether the European fund set up to protect Spain and Italy impinges on the constitutional powers of the German parliament. Should the court issue a negative decision, there would be no German money to finance the European fund. And that fund, called the European Stability Mechanism, is supposed to be the $500 billion pool of money behind last week’s critical promise from the European Central Bank to buy enough bonds from debtor countries to keep the Euro afloat.

The pending decision has brought unprecedented international attention to the court, whose official German name is Bundesverfassungsgericht (we’ll stick with federal constitutional court.) It is one of the post-World War II era institutions designed to de-centralize political power in Germany. It sits hundreds of miles from the political and economic centers of Berlin, Munich and Hamburg. Judges are appointed by the upper and lower houses of the German parliament, limited to 12-year terms and face mandatory retirement at age 68.

Unlike the U.S. Supreme Court, it does not rule on lower court decisions. While it takes most seriously its role as guardian of the German constitution, it has been careful not to act as a final arbiter of highly political decisions, according to Alexander Privitera, an analyst with the American Institute for Contemporary German Studies in Washington.

“The consensus in Germany is that they will wave this thing through,” said Primavera. “The question is what built-in limits they will impose for the German government to use this tool (of the stability fund).”

And the decision comes as conservative elements in the press and ruling coalition of Chancellor Angela Merkel issue increasingly angry declarations that with last week’s European Central Bank announcement Germany is edging perilously close to writing blank checks for debt-ridden southern European nations.

For decades, the neighboring Netherlands has been the staunchest supporter of European integration, but it is among the diminishing number of continental countries retaining a triple-A rating for their government bonds.

One result of that tension, in the last few years, according to journalist Jan-Kees Emmer: “There has been a more Euro-skeptic attitude in Dutch society,” further exacerbated as the EU expanded from a tight-knit grouping to a sprawling collection of 27 nations and as a once homogeneous society experienced a wave of mostly North African immigration.

And those sentiments found their voice in a coalition government headed by Liberal Prime Minister Mark Rutte and supported by anti-immigrant and anti-euro populist Gert Wilders. His decision to withdraw that backing forced Wednesday’s election for a new parliament. And in the early days of the campaign, the rhetoric and the polls numbers seemed to be trending to anti-euro parties on the left and right.

But according to Emmer, a former Washington correspondent and now deputy editor of The Telegraaf newspaper, Dutch politics may swing back to a more pro-European center. The latest polls show diminishing support for anti-European parties of the left and right. But coalitions have become increasingly unwieldy and time-consuming to build, and how those numbers translate into parliamentary seats remains to be seen.

“If the polls are correct, I see for the first time in years, a strong centrist government coming up,” Emmer said.

If that happens, he added, the Dutch would be more firmly in a united front with Merkel’s German government, forcing conditions on southern European debtor countries taking bailout money but keeping the survival of the euro as its main objective.

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Michael D. Mosettig, PBS NewsHour foreign affairs and defense editor emeritus, will be watching wonks push policy in Washington’s multitude of think tanks. From time to time, he’ll write dispatches on what those scholars and wannabe secretaries of state have in mind for Europe, Asia and Latin America.